After 22 years building an optical practice alongside an independent doctor of optometry, I recently revisited the vision statement for my retail location.
In the time that I developed my practice I also earned what I like to call my street MBA. Basically, I have made every mistake in the book and reinvented myself many times. How is that for credibility?
To really hone my craft I have taken opportunities to develop my professional interests. I found inspiration and mentorship in leadership opportunities (associations and colleges), training and development opportunities (working with manufacturers and educators), and a career in management consulting (developing and revitalizing dispensaries and medical practices).
I also moved my established practice to a bigger location with a growth-focused design and opened a second location. It’s been a year of a lot of changes, but this definitely taught me a lot and forced me to look at the optical business through a fresh lens.
THREE PHASES OF BUSINESS
Today, I find myself in a curious dichotomy. I have a full-fledged, mature eyecare practice poised for expansion. It is indeed time to revisit my vision for the retail business. I am in a different place now, and the business has different needs. To clarify, it helps to understand the three phases of business:
1. BUILD PHASE
Often business resources will suggest it takes three years to establish yourself in business. This is a time for rapid and aggressive growth strategies. While it may be true that the first three years will define the winners of the emerging business battle, it takes much longer to grow a business. In eyecare, we have a longer business cycle. Our patients typically purchase in two-year cycles. How many cycles must an eyecare practice sustain before there is just as much repeat business as there is new business? How do you minimize attrition?
My experience has shown me that it is in year six that you start seeing some traction and reliable data that you can start to count on. At this point you have a batch of customers who are repeating with you for the third time, a batch of customers who are repeating for the second time and of course the very valuable new customers. The key difference among these new customers is that a healthy percentage are coming from soft referrals or your reputation in the community. This key factor differentiates a new business and a maturing business. In the build phase the main focus is growth.
Since the prevalence of smartphones and instant and pervasive access to the internet, marketing, social media and influencers have revolutionized how we communicate with our clients. Communication is the key to reaching and exceeding achievable growth targets. Maintaining communication and building a reputation as the top choice provider for eyecare is difficult in a political environment that restricts communication to protect privacy.
Newsletters and direct mail are two strategies, but building your own influencer status and simultaneously aligning yourself with the top influencers in your community can be more effective. Millennials are four times more likely than other generations to have their eyeglass purchasing decision influenced by a celebrity, athlete or online influencer, according to a recent Transitions PRO Facebook post.
Clients move, clients die and some clients just choose to shop elsewhere. The more products you provide to a client the less likely they are to shop elsewhere. Eyewear is heavily commoditized, so understand the difference between providing a product and providing a solution.
Embracing technology and the ability and opportunity to stay connected means offering multiple channels to purchase. Although it’s hard for an independent retailer to compete with huge online marketers, having a strong web presence reduces attrition. As your clients move or travel they can still seek you out for information and products. For many people this keeps your business relevant and helps build loyalty. Clients look for ease and convenience. Technology is so accessible it means even independents can invest in multiple distribution channels. My biggest growth phase happened when I added e-commerce supported by consistent communication across all social media channels.
In store, offer your clients a second and third pair of glasses to meet each lifestyle need. Offer contact lenses. Upgrade your clients to premium brand name products to leverage the loyalty that those brands have built.
In order to build a valuable team, step back and reflect on what phase your business is in and if your vision for your business embodies your goals. It is absolutely acceptable to dream big in your vision statement. Conversely, your mission statement will then outline how you plan to achieve your goal, but the vision sets the tone for the business and gives each employee confidence when faced with making decisions during daily operations.
Every day your staff must make independent decisions on your behalf. Does your vision statement resonate with your staff? Can your staff sincerely ask themselves if their daily decisions advance the vision of the practice? This is an engaged staff that is “in it to win it” for the business. If your vision statement does not resonate with your staff, you may ask yourself why they are on your team. You may ask yourself if you are in touch with your vision statement. Have you shared your goals with your staff?
2. MAINTAIN PHASE
Once a business has evolved to the maintain phase, a very delicate formula of growing at a rate just a little bit greater than the natural attrition of the business (the rate of loss of patients to death, geographical/demographic changes, loss to the competition, drop out from the industry/not needing eyecare). This is the time in the business where the existing relationships must be nurtured and maintained. It is the time to increase your per customer purchases by dollar value and volume. It gets exhausting because the rate at which you can find new purchasers is difficult to sustain without impacting the quality of service that the existing clientele are used to.
Payroll costs and inventory costs need to be managed to achieve financial success. You spent your first six to 10 years growing your business. Now you are managing your business, and the subtle paradigm shift should impact your role in the business. It’s exhausting in an economic sense because you have probably penetrated a large percentage of your immediate community. Depending on the growth trend of your immediate community you are now drawing from a smaller pool of new clients. It’s time to get the existing patient working for you. This is relevant in both asking for referrals and asking for online reviews and being tagged in social media posts.
The business must always have a sustainability plan to deal with environmental factors such as natural disasters, pandemic planning, economic downturns and a talent gap. The maintain phase means the identity of the practice should be solid. Your community should easily identify what you do and your approach and offerings. Now you are building a reputation and a presence. Know what you do . . . and what you don’t do. Do your clients firmly identify with your position in the marketplace? High end, low end, designer brands, boutique brands, specialty work, services? Does your practice streamline its offerings, or are you a one-stop shop? There are no right answers to these questions.
3. DIVEST PHASE
Is it time to find a successor? Legacy planning involves much more than a financial plan. An exit strategy is paramount to the springboard that will take you to the next step of retirement or another venture. This plan should be at least three to five years in advance of the actual event.
If you are planning to sell the business, finding the right economic buyer can take time. Do you actually know what your business is worth? Just as with the sale of a home, the owner tends to be much more attached to the business than a potential buyer.
A professional valuation service is imperative. It can provide an unbiased snapshot of your business. Financial tools such as EBITDA (earnings before interest, taxes, depreciation and amortization), understanding the tax implications between an asset sale and a share sale, and understanding the value of your shares are necessary.
It’s important to look at the initial incorporation of your business and understand the legal implications of a sale. The better your cash position is at the time of sale gives you more time and options. Do I want to sell? Do I have to sell? There are so many answers to these questions.
Have you reached the pinnacle of your career and want to wind down? Do you have health concerns or a change in family circumstances such as taking care of an older parent? Has the business been a burden and now it’s time to cut your losses? Is it time to pass the business on to a relative (son or daughter), and how will you manage that transition?
Getting back to basics, most people would agree that even in a multi-leader practice the face of the practice is defined by the attributes of the leader(s). The consumer, whether through good marketing or natural forces, is attracted to the characteristics the business projects to the community. The goodwill that you have poured your heart and soul into can be your biggest asset or your worst enemy.
The eyecare industry is a unique retail experience. There are so many paths for a career for independent eyecare professionals. As a profession, ECPs are remarkably passionate about their businesses. Some rules apply across all aspects of business, and some are unique to eyecare. Finding where you belong and opening your mind to looking at your business objectively is a helpful exercise at any stage.
Dana Sacco, RO, is the owner of Inspired by Rossland Optical in the Whitby and Durham region of Ontario.