Starting a practice cold

[alferec]

I was wondering of the steps you need to take to start a practice cold. How much money will you need to front for i.e. to start a practice in a suburban California city? And isn't there some kind of a government loan program to help get your business started? I was thinking about this for the very long run i.e. save lots of money for a couple of years.

I know these are very broad questions but any kind of input would help very much!

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[POJO]

I was wondering of the steps you need to take to start a practice cold. How much money will you need to front for i.e. to start a practice in a suburban California city? And isn't there some kind of a government loan program to help get your business started? I was thinking about this for the very long run i.e. save lots of money for a couple of years.

I know these are very broad questions but any kind of input would help very much!

Dear alferec,

I'll tell you the shoe string approach and I'll let the other posters talk about the large budget approach

Start with a 500 sq foot space. Have 1 exam room and 1 lab space area. Hire a full time receptionist. Work 3 days in your office and 1-2 days outside (or even more). Concentrate your patients in those 3 days. Have a good looking dispensary with about 500 frames. Choose a slit lamp, BIO phoropter and a small field unit and you have enough equipment to start with. No need to get the other equipment until you've decided that this is what you want to do. This scenario should cost you about 35,000 total for the first 6 months.

 

[Kristene9]

Dear alferec,

I'll tell you the shoe string approach and I'll let the other posters talk about the large budget approach

Start with a 500 sq foot space. Have 1 exam room and 1 lab space area. Hire a full time receptionist. Work 3 days in your office and 1-2 days outside (or even more). Concentrate your patients in those 3 days. Have a good looking dispensary with about 500 frames. Choose a slit lamp, BIO phoropter and a small field unit and you have enough equipment to start with. No need to get the other equipment until you've decided that this is what you want to do. This scenario should cost you about 35,000 total for the first 6 months.

Thanks exactly what I've heard to do. I talked to an optometry who had to decare bankrupany from trying to do the "large budget approch". Make sure that you do your research and see found out how much competition is in the area. I don’t know much about health care plans but it could be worth looking into what health care providers are prevalent in that area and how well they work with optometrist.

Also, about the money, this is going to sound crazy but let me know what you think. I heard this scenario from a friend and at first thought he was crazy but the more I think about it maybe its not. Next year you can get money from the government for school loans at 6.8%. Right? Well when you get out. Your going to have to take out loans for your practice, but they are going to be around 8-11% interest. I know this isn't an option for everyone but has anyone look at if its worth it or not to take out all you can, try to use as little as possible and save it in a 3 year CD for 5 -6% interest? You would be losing some but that money could give you a lot more options for the future and if nothing else you could just throw it back at your loans when you get out.

Let me know what you think about that

 

[HOLLYWOOD]

1. Find The Very Best Location
2. I Like To Have 1000 To 2000 Sq. Ft.
3. Get A Lawyer And Negotiate The Lease (get A 10 Year Lease)
4. Now How Much Money You'll Need Varies Upon Location, Example I Had A Location Where My Rent Was 10,000/mo. So Upon Signing The Lease I Owed 30,000 Plus Lawyer Fees. I Got In To That Location For About 75,000. On Average It Has Cost Me About 100,000. ( I Have More Than I Location)
I Wish You Lots Of Luck!!
It Is Good To See People Opening There Own Offices.

 

[rpames]

I was asking my father (private OD for 32 years) this after I told him what we were told by some speaker that came to school. They had told us about 150k is what we would need. He laughed his butt off and said he could open an office for about 30-40k. He basically said what POJO said, that is all you need to open. You can get the fancy stuff is a little while, just start seeing patients so you can actually use the new equipment on someone.

 

[socal1015]

.

 

[sethuel1]

.

Agreed.

 

[prettygreeneyes]

.

Agreed.

Second that.

 

[HOLLYWOOD]

I was asking my father (private OD for 32 years) this after I told him what we were told by some speaker that came to school. They had told us about 150k is what we would need. He laughed his butt off and said he could open an office for about 30-40k. He basically said what POJO said, that is all you need to open. You can get the fancy stuff is a little while, just start seeing patients so you can actually use the new equipment on someone.

what about working capital ?marketing? 3 mos. reserve? and lets not get into a pissing contest about who's father or brother is an od with 30 yrs experience b/c i'm sure you'd lose.

 

[rpames]

what about working capital ?marketing? 3 mos. reserve? and lets not get into a pissing contest about who's father or brother is an od with 30 yrs experience b/c i'm sure you'd lose.

Wow, what is that about? I was just stating a practice can be started for far less that what some people say. I mentioned my fathers experience as a reference that the info was not from me, an inexperienced OD student, but rather from a proven practitioner and business man.

I apologize if that offended you.

 

[Ryan_eyeball]

what about working capital ?marketing? 3 mos. reserve? and lets not get into a pissing contest about who's father or brother is an od with 30 yrs experience b/c i'm sure you'd lose.

I agree with what you said (except of course for the last part).

 

[66Lenses]

Unless you have some sort of financial backing, you'd obviously need a loan and a decent business plan to back up your application.

 

[Kristene9]

Unless you have some sort of financial backing, you'd obviously need a loan and a decent business plan to back up your application.

how much interest do you think a new business loan is going to have in 2 or 3 years? do you know what the interest rate is now?

 

[Ben Chudner]

how much interest do you think a new business loan is going to have in 2 or 3 years? do you know what the interest rate is now?

You should pay no more than prime + 1%. You can get even better is you know how to negotiate. What that will be in 2 or 3 years...your guess is as good as mine.

 

[blazenmadison]

4 years later...

Any ODs on this message board opened/opening cold?

 

[20DOC20]

I am.

It's a little crazy in this economy ... but ... you can now write off not 5K but up to 10K of your start-up expenses. Leases are cheap, too.

I'm planning on splitting my loan up. I'll put some of my equipment on a smaller equipment lease-to-own program, and will borrow the rest on a practice loan. That way, I can pay off the loans faster.

I found a place to rent that happens to have two 12X12 rooms that are perfect! I've been offered 1500 square feet for $1000 per month in a really, really nice two-story strip mall. The other tenants are mostly dentists, one acupuncturist, some endodontists, one really popular cafe, and a gym. It's not the absolute best location within the strip, but I'm on the first floor and I have a window beside the sidewalk. On a very busy street!

I'm figuring I can do the build-out plus equipment for under 50K. I'm asking for more though.

Ironically, the most expensive stuff appears to be the freaking practice management software and the sign!

Pro-Med Financial group is funding cold-starts.

Just wanted to say ... I wouldn't go too cheap ... like renting a 500 sq foot place. I mean, that's the size of a birdcage! That would be uncomfortable for staff and patients. You need at least 1000 sq feet ... minimum. You can add mirrors to make the place appear larger.

It's worth it to spend some money on appearance. If your place doesn't look clean, clinical and professional and isn't comfortable, the patients will go elsewhere. This is a competitive profession, so be competitive. Make sure the flooring is clean. If the carpet is worn, take it out. Paint the walls, etc ...

Look for discount flooring. Do some the the build-out yourself. Like, do your own painting. Do your own interior design work. Have a contractor do your frameboards (because the ones being sold online are ridiculously expensive. Even those stupid plastic rods ... the ones that glasses fall off of unless they're a wing-style ... are outrageous). Look for used frameboards.
You don't need to spend 14K on dispensary frameboards and desks!

Dispensing tables are ridiculously priced, too. Look online for writing desks. That will suffice as a dispensing table until you can upgrade.

There are a lot of scammers out there that charge outrageous prices just because we're a medical profession. Just beware.

Also, e-bay has been more than helpful for used equipment and furniture.

Good luck! And be brave!

I'm figuring my risk this way ... if I start cold at the bottom of this depression, it'll only get better as the years pass. If I tank and have to file bankruptcy, then I'll be broke just like everyone else! HA!

 

[KHE]

Good luck! And be brave!

I'm figuring my risk this way ... if I start cold at the bottom of this depression, it'll only get better as the years pass. If I tank and have to file bankruptcy, then I'll be broke just like everyone else! HA!

Good job!

One thought...

I would NOT skimp on flooring. Especially if you live anyplace where snow is even a remote possibility. You would be surprised at how high the traffic can be in an office and cheap flooring can wear quickly and then it just looks awful and ends up needed to be replaced.

 

[imemily]

I am.

It's a little crazy in this economy ... but ... you can now write off not 5K but up to 10K of your start-up expenses. Leases are cheap, too.

I'm planning on splitting my loan up. I'll put some of my equipment on a smaller equipment lease-to-own program, and will borrow the rest on a practice loan. That way, I can pay off the loans faster.

I found a place to rent that happens to have two 12X12 rooms that are perfect! I've been offered 1500 square feet for $1000 per month in a really, really nice two-story strip mall. The other tenants are mostly dentists, one acupuncturist, some endodontists, one really popular cafe, and a gym. It's not the absolute best location within the strip, but I'm on the first floor and I have a window beside the sidewalk. On a very busy street!

I'm figuring I can do the build-out plus equipment for under 50K. I'm asking for more though.

Ironically, the most expensive stuff appears to be the freaking practice management software and the sign!

Pro-Med Financial group is funding cold-starts.

Just wanted to say ... I wouldn't go too cheap ... like renting a 500 sq foot place. I mean, that's the size of a birdcage! That would be uncomfortable for staff and patients. You need at least 1000 sq feet ... minimum. You can add mirrors to make the place appear larger.

It's worth it to spend some money on appearance. If your place doesn't look clean, clinical and professional and isn't comfortable, the patients will go elsewhere. This is a competitive profession, so be competitive. Make sure the flooring is clean. If the carpet is worn, take it out. Paint the walls, etc ...

Look for discount flooring. Do some the the build-out yourself. Like, do your own painting. Do your own interior design work. Have a contractor do your frameboards (because the ones being sold online are ridiculously expensive. Even those stupid plastic rods ... the ones that glasses fall off of unless they're a wing-style ... are outrageous). Look for used frameboards.
You don't need to spend 14K on dispensary frameboards and desks!

Dispensing tables are ridiculously priced, too. Look online for writing desks. That will suffice as a dispensing table until you can upgrade.

There are a lot of scammers out there that charge outrageous prices just because we're a medical profession. Just beware.

Also, e-bay has been more than helpful for used equipment and furniture.

Good luck! And be brave!

I'm figuring my risk this way ... if I start cold at the bottom of this depression, it'll only get better as the years pass. If I tank and have to file bankruptcy, then I'll be broke just like everyone else! HA!

What was your reason for starting up in a strip mall?

I have noticed many empty practices in strip malls for some reason. I get the impression that people go to malls to spend money on material items such as clothes, or other necessities like food.

At one of the local malls, there is a dentist, an OD and believe it or not, a family physician. Adjacent to these professional offices, sits a starbucks, an electronics store and a small food court. I would think it could get depressing just sitting around and looking at customers walk right past your practice, which was the case by the look of the OD at this local strip mall.

 

[DrSpontaneouz83]

It's a little crazy in this economy ... but ... you can now write off not 5K but up to 10K of your start-up expenses. Leases are cheap, too.

I found a place to rent that happens to have two 12X12 rooms that are perfect! I've been offered 1500 square feet for $1000 per month in a really, really nice two-story strip mall. The other tenants are mostly dentists, one acupuncturist, some endodontists, one really popular cafe, and a gym. It's not the absolute best location within the strip, but I'm on the first floor and I have a window beside the sidewalk. On a very busy street!

It's very refreshing to read a post like this. Kudos to you and I hope everything works out for you. Please keep us posted on how things work out as I have finally convinced myself that is the path I want to take pretty soon after graduation. Hope that having family in the architectural and contracting/handyman business plays in my favor.

 

[lxaly]

Dear alferec,

I'll tell you the shoe string approach and I'll let the other posters talk about the large budget approach

Start with a 500 sq foot space. Have 1 exam room and 1 lab space area. Hire a full time receptionist. Work 3 days in your office and 1-2 days outside (or even more). Concentrate your patients in those 3 days. Have a good looking dispensary with about 500 frames. Choose a slit lamp, BIO phoropter and a small field unit and you have enough equipment to start with. No need to get the other equipment until you've decided that this is what you want to do. This scenario should cost you about 35,000 total for the first 6 months.

POJO, those 500 frames, do you mean 500 frames, every frame you have one pair? or about 100 frame X5 pair. How is the frames and lens part work? also, some state have requirement that optician or optometrist have to stay in the store at least certain percentage of the time. Could talk more about this? Thanks in advanced.

 

[blazenmadison]

I'm figuring my risk this way ... if I start cold at the bottom of this depression, it'll only get better as the years pass. If I tank and have to file bankruptcy, then I'll be broke just like everyone else! HA!

I rather be broke in private practice then be broke in corporate practice!

I hope you're right about the starting cold at the bottom of the depression. I am sure you can low-ball a lot of contractors, frame reps, and even landlords.

My mistake has been rushing judgment and taking the first offer. I'll need three offers before I make a decision!

 

[KHE]

My mistake has been rushing judgment and taking the first offer. I'll need three offers before I make a decision!

Don't worry about rushing the judgement. I did that too, and I did it more than once. When you're in a bad situation, any other situation looks better and it can make you go from a bad one to a worse one. Like I said, I did that more than once. In fact, sometimes I rushed the judgement and made a bad situation worse, and other times I didn't make it soon enough and I spent too much time trying to make unworkable situations workable. A lot of that realization only comes in hindsight though so don't worry about it.

I actually took time off from practicing for awhile. I understand that that's not an option for most people so in your case, I would suggest you pick a date....maybe July 4th of NEXT year. That's one year from today.

Think of it as your own independence day. Circle that date on a calendar, mark it in your iPhone, whatever.....but then spend the year calmly and judiciously researching your options and making your plans.

And during the year, you have to get it into your head that no matter how bad your work situation is, you're going to suffer through it for one year only with a smile on your face.

No matter how bad your boss is, no matter how stupid your commercial practice is, no matter how rude a patient may be, no matter how many times you want to tell them to just take this job and shove it, you won't do it. It will be your own personal trial by fire but it will make the end result that much sweeter.

 

[Tippytoe]

I opened cold right out of school 12 yrs ago in 1,200 sq ft. It cost me $100,000 plus another $40,000 six month later (I wisely got an HRT II at the time). I can't imagine it would be any cheaper now unless you went completely ghetto.

I can't imagine what kind of dump you would end up with spending only $30,000-$40,000. But then again, I do see the dumps even established ODs are working in and it's depressing. I feel sorry for them. I now own a 4,000 sq ft building and that's plenty big for me.

Whatever you do, don't set your office up in between a hair salon and a Subway.

And, oh yea, don't try to be an optician and make your living selling eyeglasses. In 2011 and beyond, you'll get eaten alive. Medical is the only way to make a good living as an OD at this time. (Medical is the cake-----optical is the icing).

 

[blazenmadison]

No matter how bad your boss is, no matter how stupid your commercial practice is, no matter how rude a patient may be, no matter how many times you want to tell them to just take this job and shove it, you won't do it. It will be your own personal trial by fire but it will make the end result that much sweeter.

Thanks for the advice!!

 

[blazenmadison]

I opened cold right out of school 12 yrs ago in 1,200 sq ft. It cost me $100,000 plus another $40,000 six month later (I wisely got an HRT II at the time). I can't imagine it would be any cheaper now unless you went completely ghetto.

I can't imagine what kind of dump you would end up with spending only $30,000-$40,000. But then again, I do see the dumps even established ODs are working in and it's depressing. I feel sorry for them. I now own a 4,000 sq ft building and that's plenty big for me.

I spoke to a recent graduate that borrowed 300k+ to open a practice.

I think the poster forgot a 'zero' at their 30-40,000 estimate.

And, oh yea, don't try to be an optician and make your living selling eyeglasses. In 2011 and beyond, you'll get eaten alive. Medical is the only way to make a good living as an OD at this time. (Medical is the cake-----optical is the icing).

What's the filling then?

 

[Tippytoe]

I spoke to a recent graduate that borrowed 300k+ to open a practice.

I think the poster forgot a 'zero' at their 30-40,000 estimate.



What's the filling then?

ODs don't have filling......that's the fluff stuff MDs get to do like Botox, lipo, dermabrasion and whatever else strikes their fancy during slow times.