ODs Advise Young Practice Owner To Add Staff Before Hiring An Associate

Dear Jerry,

In my opinion, the doctor you wrote about last week who is grossing $700,000 is definitely not ready for an associate for all the reasons stated, plus some more.

I have found that most optometrists need help learning how to delegate procedures to technicians. If she wants to work smarter, not harder, she should start there.

I see many solo ODs who are effective delegators produce $1.25 to $1.5 million per year. Refractions and many other tests can be very effectively performed by techs and then analyzed by the doctor. That’s how you really start working smarter.

Regards,
Dr. BJM

Dear Jerry,

At the time I took in my associate, I was producing about $600,000 which is not enough for two full-time ODs. 

We started out having the associate Dr. work one day per week and as her practice grew we were able to expand her hours. We then increased her time by a half day per week every six months. She is now at 3.5 days per week and has started buying into my practice. 

This ‘phase in’ seems to work well if you are in a larger city and the associate can find additional work.

Thanks for your great articles. We really enjoy them.

Dr. Terry B

Dear Jerry,

I agree with you, I would not recommend adding an associate this soon.

Other factors include: How effectively is she delegating to her paraoptometrics and can she work more efficiently?

A couple more techs would be much more desirable than another doctor and they would also allow much more profitability and less stress.

Question: In this example of increasing her gross from $526,000 to $700,000, how much of that $174,000 increase should she realistically be able to net and how does that affect your recommendation?

If her expenses are already being met, wouldn’t a large percentage of the growth actually increase her net rather than stay constant at 25%?

Thanks,
Dr. Chris T

Hi Chris,

Good comments! Here are my thoughts.

You are correct. Some fixed expenses would remain the same, such as rent. Others would have to increase, such as staff and equipment costs.

In this case, Dr. Nichols barely has enough staff for her own patient volume. Plus, she would have to equip a second exam room.

Hopefully, her net percent would increase with additional volume. But, I don't think all the gross profit generated by her associate would fall to the bottomline.

Regards,
Jerry

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