Practice Owners: 8 Simple Steps to Preparing a Business Plan for 2013

I am very pleased say our business has more than doubled over the past four years – a time period when more than 50% of the recruiters in the country exited the recruiting business due to the difficult economic environment. Certainly, much of our success here is due to our outstanding team of Account Executives/Recruiters, but I also attribute much of our success to taking the time and making the effort to write a comprehensive business plan every year. Even a talented team needs a plan! 

Every week our Account Executives/Recruiters speak with hundreds of practice owners. We have found that a surprisingly small percentage of business owners actually take the time and effort every year to develop a business plan, and that most of the truly successful practices we work with do have a plan in place. 

A business plan consists of three parts, which I will break down into eight steps: 

1. A statement of what you want your practice to be in the future. (Step 1)
2. An assessment of where your practice is today. (Step 2)
3. A realistic breakdown of the steps you need to take in order to get from where you are to where you want to be. (Steps 3-8)

The 8 Simple Steps to Preparing your Business Plan:

1.  Develop a Mission/Vision Statement for your practice – Simply stated, why does your practice exist? Who do you serve? What do you offer patients that they can’t get elsewhere? 

• Vision – Write out a compelling description of a future desired state of your practice. Make sure you can clearly picture what your practice will look like in the future. Think in terms of where you want to be. The purpose of the business plan is to lay out the steps between where you want to be and your current reality. 
• Values – What do you stand for? What are the guiding principals by which your practice operates? Values motivate us before we achieve a goal and determine how satisfied we are once we attain it. Does your current culture support your values?

2.  Assess Current Reality – In a few paragraphs summarize your results for 2012. It helps to look at your monthly financials.

• Positive Effects on Growth – In which areas of your practice are you experiencing the most success? How do you optimize those to produce continued results? 
• Negative Effects on Growth – In which areas of your practice are you experiencing more challenges? What do you need to change in order to obtain positive results? 
• Current Office Structure – Diagram current office structure. Will your current team, with their current duties and responsibilities help you achieve the vision for your practice?
• Understand your key metrics – What is the average per patient production for each doctor in your practice? 
• SWOT – Draw a box with four quadrants: Strengths, Weaknesses, Opportunities and Threats. Be honest with yourself. Give a lot of thought to each area.

3. Describe what your practice will look like in 2017 – This is the fun part. Now is the time for specifics. There are plenty of ways to grow and be successful. In fact, some practices even choose to shrink and be profitable. It is up to you. 

• Will you limit your practice to a certain type of patient base?
• Will you cater to patient needs by expanding hours, days and providers in your current facility?
• Will you expand your facility to accommodate greater patient demand?
• Will you expand your presence in a market by acquiring or building new practice locations?
• How many patients will your practice see?What clinical services will you offer? 
• Will your equipment be all state of the art?
• Will your practice thrive because of your strong engagement with and ties to the community? 

4. Commit to your 2013 Key Initiatives – Decide on a small, achievable set of initiatives that will help move you toward your goal. In most cases, you can’t achieve your vision in just one year, but you can take steps toward reaching it. Typically these initiatives fall into one of five categories:

• Improving office efficiency – Improving your responsiveness to current patient demand by treating more patients, maintaining or improving the quality of care with the same number of resources (team members and operatories) by eliminating inefficiencies in your current systems and processes.
• Broadening your level of services – Providing your patients with more clinical choices, which in turn improves the value and revenue from each patient visit. 
• Increase Demand – Do a better job of filling your teams schedule through advertising, referral programs or adding new/profitable plans. 
• Add Capacity – Add new Optometrists or Ophthalmologists to your practice to satisfy demand. (Don’t take this step until you have the demand and efficiencies to add someone profitably). 
• Buy or create a new patient base – Serve a new patient pool by buying or starting a new practice. 

5. Break your goals up into Bite-sized Chunks – Figure out what your 2013 objectives mean to each team member. It is critical that you involve your team. If you involve them in the process it will improve their buy-in. They will probably be the source of many of your best ideas. Define what the plan means to each team member:

• Does it mean they need more training in a certain area? 
• Does it mean they need to schedule more efficiently? 
• Does it mean they need to improve recall? 

6. Install Guardrails – Make sure each member knows their daily, weekly and monthly goals. 

• This is as simple as taking your annual goals and dividing them by the number of working days in a year.
• The key to exceeding your goals every year is to exceed them every day. 
• Make it a routine to share results on a daily and weekly basis. 
• Reinforce how important each team members part is to the practices overall success. 
• Celebrate the daily and weekly victories. 

7. Create a Budget – This is the tough part. Budgeting is the toughest part of the process because it makes you say no to things you really want to do. Tips:

• Zero based budget – Challenge each cost. Don’t assume you have to pay for something this year, just because you did it last year. 
• Never count on revenue from a new hire or new initiative until it becomes a reality. Most practices count a very rosy picture when a new team member joins their practice. 
• Fund new initiatives off the excess. Don’t buy something or hire someone unless you can survive a failure. Don’t borrow money and risk your practice because you think a new Associate, new location, new piece of equipment will produce. Wait until you can afford a failure. “Plan for the worst, Hope for the best”. 

8. Print and Bind the Plan - Commit to the plan. Don’t just put it in your desk drawer.

• Carry it with you.
• Check progress weekly.
• Refer to it in team meetings.
• If you are falling behind, be aware of what needs to change and take action immediately.
• Celebrate the little victories and share them with your team.
• Bankers and perspective team members will LOVE you when you show them your plan.

You can do this! In fact, you should do it right now! You don’t need an MBA, CPA or Law degree to write a Business Plan for your practice. Certainly, advice from a trained professional is helpful, but in most cases you have what it takes to get the basics down on paper. 

You are the leader of your practice. If you are serious about growing your practice, offering new services, expanding your reach, serving new patients, and preparing for a comfortable retirement, you need to write a Business Plan. If you haven’t done so already, start your plan today!

Written by Mark Kennedy, Owner/Managing Director of Executive Talent Search (ETS Dental, ETS Vision, ETS Tech-Ops). To find out more, call ETS Vision at (540) 563-1688 or visit us online at www.etsvision.com.

A Decline in Productivity Could Lead to Growing Employment and a Self-Sustaining Recovery

In recent months, initial unemployment claims have edged down and the four-week moving average has fallen from over 400,000 claims a year ago to less than 370,000 a week. In September, the reported unemployment rate fell to 7.8 percent crossing the critical psychological barrier of 8 percent for the first time since early 2009. U.S. consumer sentiment has actually reached a five year high in October according to the University of Michigan index.

"There is good reason to look at the economic data and say that the workforce situation continues to improve," says Rob Romaine, president of MRINetwork. "People continue to see friends and neighbors going to work and nothing will rebuild sentiment faster than that. Consumer debt, which is increasing after years of consecutive quarterly declines shows that people have more confidence in their jobs and in their economic future."

Adding weight to the deluge of economic figures, GDP grew at an annualized rate of 2 percent from 1.3 percent in the second quarter of the year. The figure was more positive than many economists projected, yet it still is unlikely enough to pull growth in 2012 as a whole over 2 percent. Such growth, though, is not typically enough to drive substantial improvements in employment markets, and certainly not enough to push unemployment down half a percent in two months. Yet, that isn't necessarily cause to think that either the employment or GDP figures are incorrect.

One potential cause is that productivity, which has increased through both the recession and the recovery, has reached a peak and employers are finding they can't keep running with the same level of staff. The current level of economic growth has become less of a temporary condition and more of the new normal. Managers can no longer count on staff to continue working under emergency conditions, especially as corporate America continues to see record profitability. Since the economy's peak in October of 2007 corporate after tax profitability has grown at nearly three times the rate of GDP.

Since about 2008, the number of employees voluntarily leaving their jobs fell significantly as people didn't want to, or couldn't change jobs at the rate they once did. The U.S. quit rate fell as low as 1.2 percent in late 2009, but has since recovered to 1.6 percent. The rate among workers who feel overworked or under-compensated is understandably even higher.

"Even if a company isn't cutting its staffing levels, it likely is losing employees to churn at a higher rate today than they were two years ago," says Romaine. "While though the recession managers might have tried to cover those losses with existing staff, today companies have reached a point where most positions vacated need to be backfilled. If a salary lasted in the budget through the recession, it was a position worth keeping filled."

If hiring is increasing, however, that could very well help add buying power to the economy just in time for the holiday season, giving a possible boost to fourth quarter GDP.

The United Kingdom recently experienced a similar situation where employment was growing while GDP was shrinking. The counter cyclical employment growth was puzzling to many economist giving it names like 'the employment paradox' and the 'economic puzzle.' Whatever the cause though, the increased employment likely helped to lift the UK economy out of recession in the third quarter.

So whether the dog wags the tail, or the tail wags the dog, 2013 seems to be building the potential for some upside surprise for both the economy and labor market.