Every Central Intelligence Agency operative knows: Never enter a building without knowing where the exits are. All great athletes visualize the end before they start. And all great business people know what their exit looks like years before their planned departure. Do you know yours?
Before I lose those of you who are not practice owners, this message is relevant for all of us. Knowing what the end will look like before we get there gives us something to work toward.
As I talk to clinicians or evaluate practices to purchase, I always bring up the benefits of advanced clinical products and procedures at the outset of the conversation. Technologies such as daily disposable and scleral lenses, thermal pulsation treatments, and advanced diagnostics bring greater value to patients. In the future, we will all be using diagnostics and treatments that do not exist today—but when you retire from practice, are you going to have been a laggard when it comes to technology, or are you going to have been one who continually adopted better treatments for your patients?
Can you say with certainty that you are providing the best care for your patients and that they couldn’t get better care elsewhere? I urge you to provide the best care for your patients now so that it will become a habit that you can look back on with pride when you reach the end.
Building a business is like building a house; once a solid foundation is set, things can really progress fast. The thing about a foundation, though, is that you need to know what you are building first. For those of us who have a financial stake in our practice (and I argue that every one of us does), we need to know what we are building toward. One number to keep in mind for your business is your earnings before interest, tax, depreciation, and amortization (EBITDA). EBITDA is a measure of a company’s operating performance. When it comes time to sell off your stake in the practice, this is one way to assess its value.
Many retiring physicians with whom I talk state that the value of their practice is not worth nearly what they thought it would be. As such, they try to scramble in their retiring years to increase their EBITDA and position their practice for a sale of a higher multiple. I can say with certainly that the end is the worst time to be scrambling to increase your practice valuation.
Finances and Clinical Collide
What is in the best interest of your patients will always be in the best interest of your practice. What areas of your practice could handle a new foundation? Ask yourself: Are there healthier contact lenses for my patients than the ones that I am fitting now? Am I managing myopia progression in a way that slows it down? Are my specialty lens patients in the best lenses for their vision and comfort? Are the dry eye treatments that I am providing solving the underlying problem, or do I need to bring in more advanced treatments? Are my fees and coding practices encouraging me to see patients at intervals that are healthy?
Knowing what the exit looks like in advance is an effective and smart way to perceive your future. Both your patients’ wellbeing and your financial future are on the line. CLS