Mistakes To Avoid When Hiring A Consultant For Your OD Practice

By Jerry Hayes OD | in

Practice Profitability

| 4/23/2009 - 11:19 am

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Dear Dr. Hayes,

Do you recommend that ODs with new practices use the services of a consultant to help determine how to reach their budget goals?

I opened cold about two years ago and hired a consultant before getting started. Unfortunately, he cost me (both in fees and his recommendations) a lot of money in the long run — it was very disappointing and we had to part ways.

Undeterred, I hired another consultant a year later. He was great with morale building, but what I really need is a financial evaluation. Our office moral is already our strength.

I believe that an efficient, ethical consultant would be great, but my past experience makes me reluctant to spend any money on that service. What do you recommend?

Thanks,
Dr. G

Hi Dr. G,

Good question! And congratulations on being proactive.

ODs new to private practice often ask me if it’s worth the money to hire a consultant and what’s the best way to go about picking one.

I am out of the consulting business now, but I’ve done a lot of consulting with ODs in the past. And, I’ve used consultants extensively to advise me in my practices and several businesses I’ve owned.

So, I believe in the concept of consulting and feel very qualified to comment on some general things you should consider before engaging an outside advisor.

The One Thing You Must Do, First Define Your Needs

If you think you need help managing or growing your practice, and who doesn’t, the most important thing to do before hiring a consultant is to spend some time defining your needs.

For example, if your annual gross revenues are less than $300,000, you probably need someone who specializes in practice development and marketing to help you grow your patient base.

On the other hand, if you’re grossing more than $500,000, but netting below 30%, I don’t think marketing is your problem. You need someone to help you do a better job of managing your finances.

In your case, it sounds like you hired a consultant specializing in staff management, and what you later realized you needed was advice on overhead control and improving your net.

So, rule No. 1 is don’t bring a consultant into your practice until you’ve identified a specific project, such as training your staff to be more professional on the telephone.

Or, a specific problem, such as a high gross, low net practice.

Once you have identified what you want to work on, then talk to a minimum of three consultants and ask them for specific examples of how they have helped other ODs with similar assignments.

Finally, have the consultant provide you with a written letter of agreement that outlines what they will do, how much they will charge and perhaps most importantly, what you can expect in terms of an outcome.

Bottom line, you want to do enough homework to feel confident that you have matched your expectations with the skill set and experience base of the outside advisor you invest your time and money with.

Best Regards,
Jerry Hayes, OD

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Disclaimer: The information and opinions contained on this site are for discussion purposes only and are NOT intended to serve as legal, accounting or investment advice. ©2009 Jerry Hayes, OD. Not to be reproduced without written permission of the author.