COVID-19 Has Closed My Practice, What Should I Do?

We are experiencing uncharted territory as the coronavirus pandemic continues to ravage the economy, health and mental stability of the American population.  As of March 23, 2020, multiple states have issued “Shelter in Place” acts which limit business operations to essential businesses only.


The big concern that arises for practice owners from extended closures/minimum operation is cash flow.  Bills still have to be paid, mortgages/rents are still due, loans show their nasty heads and staff need to be taken care of somehow.  Other concerns revolve around the sudden loss of commerce and the effects it can have on business momentum.


So what should you do?  Here is a checklist of to-do items in order to keep your business running amidst crisis.

  • (1) Make sure you are prepared financially

    • Cash Reserves
    • Line of Credit
    • Loans from banks with no pre-payment penalty
    • SBA loans
  • (2) Free up cash flow by deferring payments and auditing invoices

    • Talk with vendors about holding bills that are due
    • Try to defer equipment lease and financing payments
    • Audit invoices
  • (3) Create cash flow channels now

    • Try Telehealth
    • Create an online ordering system for frames/contacts
    • Offer curbside pickup
  • (4) Stay connected with your patients and show them that you care

    • Send Out an E-mail Newsletter
    • Update your Website and Social Media
  • (5) Establish or Refine Systems

    • Write/Update your Employee Handbook
    • Create or Update Job and Inventory Systems
    • Update/Install EMR
    • Necessary tech updates/maintenance
  • (6) Improve Your Practice’s Online Presence

    • Update all listings
    • Create blogs and social media posts
  • (7) Improve Your Practice’s Real Life Appearance

    • Landscape
    • Painting/Deep Cleaning
    • Build Outs
  • (8) Work on Yourself and Your well-being

    • Catch up on CE
    • Pursue a Passion
    • Take care of your mind

(1) Make sure you are prepared financially


  • Cash Reserves


Take a good look at your cash reserve situation.  A situation like this will give a good indicator of how long your cash reserves can last.  If you did not have any cash reserves before this crisis happened it may be time to implement a system, such as Profit First, to ensure that cash reserves are not a problem in the future.  Another important thing is to analyze the amount of cash reserves needed. There is no right answer to this, however most business owners agree that at least 2-3 months should be stored in an easily accessible account. 


  • Line of Credit


If you are in need of cash, look at opening a line of credit before taking any sort of loan.  A business line of credit allows you “take money as you need it” rather than taking out a loan with a set dollar amount.  Business lines of credit also tend to have better terms and lower rates.


  • Loans from banks with no pre-payment penalty


If cash reserves and a line of credit are not options, look at loans from local banks, preferably loans that do not have pre-payment penalties.  The idea here is that you can use the funds necessary from the loan, and once the crisis blows over and you cashflow again, you can pay back the loan ASAP and avoid having additional debt against your practice.


  • SBA loans


Although SBA loans are normally recommended as a last resort, due to associated fees and stricter terms, they may need to be an option.  Fortunately, the government has been hard at work creating Small Business Relief programs.


Check out this Forbes article for more up to date info: https://www.forbes.com/sites/advisor/2020/03/20/list-of-coronavirus-covid-19-small-business-relief-programs/#1c214454e89d  It does not hurt to have an application ready for a SBA loan - just in case.

"Although SBA loans are normally recommended as a last resort, due to associated fees and stricter terms, they may need to be an option.  It does not hurt to have an application ready for a SBA loan - just in case"

(2) Free up cash flow by deferring payments and auditing invoices


  • Talk with vendors about holding bills that are due


We are happy to report that many vendors are deferring payment for bills due to the cashflow crunch that COVID-19 has caused.  Check with frame and contact lens vendors, as well as any equipment leases and see if payments can be deferred. Make sure to always call and not assume that vendors have deferred payment options and run up a late fee!


  • Try to defer equipment lease and financing payments


Once again, try deferring equipment lease and financing payments by calling associated banks and companies.


  • Audit invoices


One of the favorite attributes of my accountant/bookkeeper, is her eye for detail that has resulted in constant discernment of vendor bills.  Often she has found that we were being over-billed or had an account credit that had gone unapplied. If you are not lucky enough to have an accountant/bookkeeper that operates on this level of detail or you purchase through a buying group - it is time to perform a big audit of your billings and see if there is any cash left on the table.  Warning: this will be very boring. 

"We are happy to report that many vendors are deferring payment for bills due to the cashflow crunch that COVID-19 has caused.  Check with frame and contact lens vendors, as well as any equipment leases and see if payments can be deferred" 

(3) Create cash flow channels now


  • Try Telehealth


The COVID-19 crisis has created a lot of negativity for commerce.  One section of commerce that has immensely benefited? Telehealth and teleconferencing.  Begin offering telehealth exams as an option for your patients. Medicare has relaxed their requirements for telehealth exams.  Keep in mind a G-modifier will be needed. Make sure to consult with your billing service for details.


  • Create an online ordering system for frames/contacts


In addition to phone ordering, consider having an online store for contact lenses at a minimum.  If you have the time, consider creating an online store or catalog for your frames as well. This will be time consuming, but hey, you have the time!


  • Offer curbside pickup


Reduction of contact and social distancing are vital for this pandemic to pass.  Offer curbside pickup for glasses and contacts to your patients.

"Begin offering telehealth exams as an option for your patients. Medicare has relaxed their requirements for telehealth exams.  Keep in mind a G-modifier will be needed"

(4) Stay connected with your patients and show them that you care


  • Send Out an E-mail Newsletter


Tell patients about what emergencies you are seeing, what hours they can stop by the office and what materials they can still order for you.  Explain details on tentative updating of expired Rxs as well.


  • Update your Website and Social Media


Using the content in your newsletter, make sure to update your website and social media pages as well since many newsletter blasts end up in spam folders.

 

"Tell patients about what emergencies you are seeing, what hours they can stop by the office and what materials they can still order for you.  Explain details on tentative updating of expired Rxs as well"

(5) Establish or Refine Systems


  • Write/Update your Employee Handbook


A comprehensive, all inclusive Employee Handbook (or manual) is essential for a business to be successful and consistent.  If you do not have a handbook, consider devoting some time to writing one. If your handbook has not been updated in years, look through it and make some revisions to keep it current.


  • Create or Update Job and Inventory Systems


Systems for checking in, filing, notifying patients, storing and sending out materials are vital for an efficient office.  If you do not have a strategy in place for these, consider developing one. Now is a good time to have devoted/focused time with your staff to devise great systems that will benefit you in the long run.


  • Update/Install EMR


Installing and updating EMR systems suck.  They are especially trying when you have to troubleshoot with a patient in your chair.  Now is the perfect time to implement that new system or edit templates on an existing one.  You can run through trial and error without angry patients.


  • Necessary tech updates/maintenance


Need to update your computer’s operating system or install a new backup drive?  Now is the time!

"Installing and updating EMR systems suck.  They are especially trying when you have to troubleshoot with a patient in your chair.  Now is the perfect time to implement that new system or edit templates on an existing one"

(6) Improve Your Practice’s Online Presence


  • Update all listings


Look at Google, Yelp and any other online listings your business may be a part of.  Update hours, descriptions and refresh photos.


  • Create blogs and social media posts


Extra time means you can get a leg up on creating content for social media accounts and writing blogs.  After you have exhausted your creativity, devise a schedule for launching your posts and writings throughout the year.

"Extra time means you can get a leg up on creating content for social media accounts and writing blogs.  After you have exhausted your creativity, devise a schedule for launching your posts and writings throughout the year" 

(7) Improve Your Practice’s Real Life Appearance


  • Landscape


With limited patient traffic, this is a perfect time to make landscaping changes around your building.  In most states, hardware stores are considered “essential,” so you should have no issue getting materials.


  • Painting/Deep Cleaning


Just like landscaping, painting and deep cleaning require there to be minimum foot traffic due to the nature of the work.  Want a brighter color in reception or those pesky stains in your exam room gone? Explore DIY ways to get this done.


  • Build Outs


There may be limitations, however closing the office for a build out is always a negative when it comes to cash flow.  Since you are forced to be closed or near closed - get that long awaited build out going.

"With limited patient traffic, this is a perfect time to make landscaping changes around your building.  In most states, hardware stores are considered “essential,” so you should have no issue getting materials"

 

(8) Work on Yourself and Your well-being


  • Catch up on CE


There is a plethora of online CE being offered right now.  Take advantage of it and start stocking up on your hours now instead of procrastinating later.


  • Pursue a Passion


No description needed for this one.  Go for it!


  • Take care of your mind


This is a trying time for business owners.  Make sure it does not get the best of you. Spend time with family, take a walk, meditate, listen to a church service - just do whatever you need to do to maintain sanity.  Headspace is an app that is offering free services to all healthcare providers.


Whatever you choose to do to clear your mental slate, just remember: we are all in this together and this too, shall pass.

"This is a trying time for business owners...Whatever you choose to do to clear your mental slate, just remember: we are all in this together and this too, shall pass" 

 

Check out Practice Owner, Dr. Julie Phan's  Quarantine Work Schedule for her staff

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About Dr. Aaron Neufeld

Dr. Aaron Neufeld is a Co-Founder and editor for ODs on Finance. He owns a group private practice in Los Altos, CA and values a debt-free lifestyle as well as serial investing in real estate and index funds. Contact him: aneufeldod@gmail.com

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