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Set up the right business structure for your practice

No matter how one may want to strip down and analyse the challenges relating to the business side of the practice, it always reverts back to having the right information, in the right format, at the right time.

It is true that there is a tendency among health care professionals to abscond from the financial management of the business, but I just don’t see how you can run a business effectively, without the right information at hand. The old convention of meeting with the auditors for a business review, some months after year end in February, is just so old! It is fruitless to reflect back on a business calendar, that, stretches back some fifteen months.

The key to creating a high-performance practice, is to set up effective business structures, which will enable the optometrist to fly the business like a kite – as easy as that. What you need, are a few relatively simple structures in place.

It all starts with a business plan, which should be reviewed annually. Change your financial year-end to July or August, when there is more free time to plan. A budget and a forecast is required, so that you have something to aim at and measure your progress. A policy and procedures manual and a training manual would serve you well. Financial management accounts, in a format you can relate to, should be on your desk by the 10th of the month.

This may beg the question, how? The answer is simple. Employ the right accountants who know how to do this. It is not rocket science.

I once did a survey in a room filled with over one hundred optometrists, which revealed that seventy-four percent of them did not know what percentage of net profit, before tax, they achieve. This suggested that they do not have the right structures in place, which can place the right information, in the right format at their fingertips at the right time.