Help bringing on a Dr!!!!!

[dammy05]

We've been approached by a local optometrist that's looking to pick up a few extra days and was interested in doing it at our store. We're an eyeglasses only opticinary. No insurance, no contacts. We had a plan to bring on Dr's in our locations, but not for a few years. Here are some questions that I would love to hear other people's experiences on:

How do you structure your contracts with the dr? We're in Ohio so have to lease the space to them, what is a fair rate? What do you provide for the Dr? A complete lane? Auto refractor? Nothing at all and just allow the Dr to bring it? If you provide it, how much do you lease the equipment to the dr for? After bringing on a dr, did you notice a significant increase in the optical sales? I'm willing to do whatever investment it takes to bring on a dr, however I'm not sure of if I'll get the payoff on the front end of my core business, eyeglass sales. What issues have you experienced in bringing on a dr? Are there some key questions I'm missing here? Any help would be appreciated!

Thanks in advance!

[drk]

Hi!

I'm an Ohio doctor. Can I have job too? Just kidding.

I think Johns sees the value of having an OD on location in his offices. I think it could only help you, unless the doctor can't refract and prescribe well.

I think you should NOT buy into the concept just yet. Make it provisional. Try for about a year and see how it goes.

As to you investment, you will probably be responsible for the physical build out: a room, lights, electric, a door, flooring, a desk. That's enough for your part.

Make the OD purchase their own equipment: chair, stand, slit lamp, etc. Why should you buy that if you don't know if you will like this arrangement? Do you want stuck with a lane of equipment?

That should make the OD pause. It will put skin in the game.

As to the contract, that's a huuuuuggggeee legal question that I don't think you should do on your own. You need an attorney. Split the cost with the OD. Think about who gets what records, convenant not to compete, all that jazz. Consider that the OD will need to produce liability insurance to your satsfaction as well, and your insurance will need amended in case his slit lamp stays on all night and burns the house down, etc.

What's more, you have to charge the OD for things done at the front desk, like 1. scheduling service 2. fee collection service 3. merchant processing services 4. sharing any phone lines, cleaning service, etc. That should be part of the "rent" as well.

You can't charge a % of the "take" in Ohio, so it's going to have to be a flat fee.

Consider that if you crush the OD with a high rent, there will be no profitability for the OD and that will ruin it. You may wish to go "free rent for 90 days" to be nice.

If the OD can charge ~$75/exam, then they'll need about 4 exams/day to make it worth it. Start with two 1/2 days (maybe an AM and a PM depending on your optical hours), see if you can't build it to 8-10 exams/week.

I would consider, if we could "split" it, a 25% charge for overhead and services a good deal. That means, say, if you can get it to 8 exams/week @$75, about $150/wk or $600/mo. Do a cost-analysis and see what the overhead is going to cost you, first, though. You want to probably break even, because you're not in the landlord business, just the incremental optical sales business.

Also, you need to "benchmark" your optical sales B.D. and A.D. (before doctor/after doctor) to see if you're getting a good R.O.I. You should have a target beforehand that you'd be happy with.

If you do get into contact lens fitting, and I'd bet that would be a trend, then you'd have to sell the contacts as well, if you're licensed. That's not big money, though. If you do, you need an efficient system, or the OD will have to order them herself and direct ship them. You can't order and dispense them for free.

[CCGREEN]

Get the Dr vested in the business in some form or fashion. Do something that will motivate him to write eyeglass Rx's for you. So many times I have seen a pt call for a eyeglass exam and then when they get into the exam room the dr starts pushing them into contacts. Reason being it brings in more money for the Dr in exam fees vs a small refraction fee for eyeglasses. But the Dr will say, I gave them a eyeglass Rx. People buy contacts because they DO NOT WANT EYEGLASSES even though we and they know they need them. So the pt comes out wanting to buy contacts now instead of glasses. Well we all know that there is NO money to be made in selling contacts. Only in exam fees. And the pt will take their contact lens rx home and order from the convenience of their house.

Boat load of great info just came out of DRK. Its a lot to consider. But at the same time if you have that awesome relationship there is plenty of money to be made for both party's involved.

[harry888]

I'm more interested in the inquiring ODs motivation and background.

I'm an OD that is in my own private practice, but also has a one day lease situation in a remote location, so have seen quite a bit. And had about four lease situations previous.

I've seen many of these agreements go south. A newbie OD thinks they are doing all the work so you can sell glasses, and has no idea of what the cost of running a business is. many will start up a practice in your office, then move 2 miles away with the records.

You want your OD to understand the costs of running a practice and appreciate what you do. My lease situation answers the phone and makes the appts and checks the insurance. I put in the equipment and pay a nominal two figures in rent. Been thirteen years and we are great friends. I was doing the contact business, selling the contacts, but they are a hassle you don't want. Previous part time lease ended because the owning optician had a fatal heart attack.

PM me if you like

I agree with most of what DRK had to say. Do the build out, have the OD lease get the equipment they like, make their appts, and expect minimal in rent.

[dammy05]

Thanks everyone for your feedback. That's exactly where I'm at, I'll be completing the buildout, making appts., and taking a minimal rent. The Dr will be coming in with all their own equipment and we'll be working side by side.