The reception area of Dr. Whipple’s second practice location. He says that patient care and efficiencies were improved at that office, which ensured that it was profitable from the start.
By Ian G. Whipple, OD
Nov. 16, 2022
Opening a second practice location gives you the opportunity to expand access to care for patients while building your business. Here is how I opened a second office designed to be profitable from the first day of operation.
Why Open a Second Location?
I had been interested in a second location for a while. I always wanted to see if I could make it as a two-location practice owner. I always gravitated toward the business classes in optometry school and have taken particular interest in “working ON my practice” more than “working IN my practice.”
Inflation is increasing everywhere except for in our reimbursement rates. A second location can help me maintain my current net returns while allowing me a buffer to increase staff wages and cover other increasing costs.
Additionally, a second location will be more attractive to any potential future buyer of my practice when I eventually retire.
For all those reasons, earlier this year I purchased another practice that I turned into a second location of my existing practice.
Deciding If It’s the Right Time for a Second Location
I had been contemplating a second location for several years, and I came close to purchasing this same practice just before the start of the pandemic. I passed on the opportunity at that time, primarily due to fear. I worried that the additional time commitment would pull me from my primary location and from non-optometry related pursuits. I then experienced a nagging feeling and slight regret. When the practice again became available (at a slightly lower asking price), I felt ready to jump at the opportunity.
The financial motivation is just one consideration. For me, a larger motivation is the opportunity to bring modern eyecare and our excellent patient experience to a new patient demographic. I crave the thrill of transforming/building the practice, and look forward to repeated success.
Expanding Access to Care
The second location is 15 miles south of my established office. The new location is conveniently located adjacent to a regional hospital in a professional plaza near many other medical specialty clinics.
Most of my previous articles stress the importance of creating an amazing patient experience. I’m not sure that I’m creative enough to reinvent the patient experience, so I am simply implementing in the new office the same systems and patient flow that work well in my primary location.
The optical in Dr. Whipple’s second location. Rather than reinventing the wheel, he has brought the same great patient care and service of his primary location to the new office.
Making Quick Profitability Likely
The new location is roughly 20 percent of the production size/value of my primary location. I expected to be profitable from day one in this new location, an expectation we have met. Though the practice is small, it was profitable for the previous owner and I experienced immediate improvements in efficiency by eliminating systems redundancy, having access to lower COGS (due to bulk purchases from both offices) and through better utilization of staff time.
Under previous ownership, the office was open four days per week, but was only seeing two days’ worth of patients. We now keep the office open four days per week, but only have two doctor days for now. The doctor days are fully booked and more productive than four partially booked doctor days.
I used personal savings and money from a home equity loan to fund the purchase of the practice. I used this route of financing to avoid the increasing interest rates seen today.
Getting Staffing Right in Second Location
The new office was staffed with one doctor and three-part time staff members: an optician, receptionist and office manager. Many staff tasks are redundant between the two offices. My remote receptionist is already answering phone calls for both offices and I plan to transition the billing from the office manager from the new location to our billing specialist from the primary location.
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Removing phone and billing duties from the new office will free up staff there to train and perfect the systems and processes introduced from the primary location. I anticipate growth for the second location, so we hired a new optometrist as an associate for the new location and we’re in the process of hiring a technician to even further increase the number of patients we can see each day in the new office.
Getting the Second Location’s Office Space in Shape
I’m leasing the office space for the new office. I have plans for eventual renovations of the physical space, but for now, we’re focusing on implementing a new patient flow and staff training, based on how we do it in my primary location, and modernizing the patient experience. Certainly a beautiful office facility will improve sales and profitability, but enhanced physical space won’t do us much good if our team doesn’t know how to sell.
How’s It Going at the Three-Month Mark?
In the three months since the practice purchase that created my second location, I have installed modern acuity charts, purchased a working refrigerator, updated our contact lens trials to include modern lens offerings, implemented wide-field retinal imaging technology and have taken advantage of many hours of staff training and integration.
We are profitable and look forward to continued success and growth. I have also proven to myself that I can manage a two-location practice.
Ian G. Whipple, OD, is the owner of Vision Source of Farr West , which has two locations in Farr West, Utah. To contact him: iwhipple@gmail.com
