20/20 MONEY Adding an Associate: Understanding Marginal Chair Cost to Leverage Your Practice
Hello, and welcome to episode 48 of 20/20 Money! Even though this episode is coming out on the first Monday in September, it is Labor Day and therefore I’m pushing back the “Selling in September” theme until next week, when the next four episodes will be dedicated to topics relating to selling one’s practice.
My guest on today’s show is Dr. Matt Mitchell. Matt has been on the show in the past and I wanted to have him back to talk about a problem that I hear a lot of ODs trying to solve, and that’s the predicament of when (or if) they should bring on an associate in their practice and how to evaluate the metrics of their practice to determine the answer to that question.
In our conversation, Matt talks about something that he reviews called marginal chair cost. He explains how it’s defined and how to calculate your marginal chair cost in your practice. We also discuss how to evaluate the cost of adding a new patient in your practice (hint, it’s not as much as you think) and how you can use that number to determine when it’s time to bring on an associate OD.
Our conversation then shifts more towards discussing the CEO model within an optometry practice, which really means getting ODs to think about their practice as a business and how to earn a good ROI on your business as an investment, but that doesn’t happen if you don’t have the time to work ON your business. We talk about the lessons each of us have learned from The E-Myth book by Michael Gerber and the trap that most ODs and business owners fall into when it comes to owning their business. We also talk about the relationship of the two currencies we have in life—time and money—and how you can use each of those to your favor when bringing on an associate.
We wrap up the conversation talking about compensation structures for associate ODs and examples of language your team can use when scheduling patients with a new associate.
As a reminder, you can get all the information discussed in today’s conversation by visiting our website at integratedpwm.com and clicking on the Learning Center. While there, you can also set up a 15min pre-discovery conversation to learn a little bit more about what it means to work with our firm or check out any number of additional free resources like our eBooks and on-demand webinars.
And with that introduction, I hope you enjoy my conversation with Dr. Matt Mitchell.
Resources:
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