2024 is fast approaching! That means that it’s time to consider making big purchases to improve your practice and avoid paying heavy tax bills — but what if there’s a better way to use your money? 

In this episode, Bethany is joined by Adam Cmejla, founder of Integrated Planning and Wealth Management, a firm that does financial and retirement planning for optometric practice owners. Together they have an enlightening discussion on the best strategies to make your money work for you at the end of the year and clarify common misconceptions about taxes and managing practice finances. 

While it may seem prudent to invest profits back into your business, Adam challenges the idea of reinvesting profits solely for tax benefits, advocating for a balanced approach that includes enjoying personal rewards.

Tune in to learn practical expert advice on evaluating financials, understanding cash flow, and making smart, strategic decisions about savings and investments. Your practice is your most important asset – learn how to make sure that it’s working to benefit you both personally and professionally.



November 15, 2023


Read the Transcription

Becca Starks: We have the ear with the students to hear what they’re looking for. They’re very, very few students that we’re working with, with the class of 2023 that will even consider an opportunity that is not private practice.

Dr. Bethany Fishbein: Hey, I am Bethany Fishbein. I am the CEO of The Power Practice and Host of The Power Hour Optometry Podcast. And I just want to first congratulate all of the new optometrists graduating this week from the optometry schools across the country. It’s such an exciting time. It doesn’t feel like that long ago since I and my classmates at New England College of Optometry in 1997 graduated. It goes fast. It’s really an exciting time. So congratulations, first of all, and this show is inspired by and dedicated to you and all of the people that you are hoping will hire you. Once you get your licenses and get out there into the world. So I’ve invited a guest, I have Becca Starks, Becca handles Enterprise Accounts and Operations for KMK Careers. And she’s here to help me sort out some of the things that today’s optometry students are looking for, and help educate some of the optometrists who are looking to hire young optometrists about misconceptions they may have or differing perceptions of this graduating class. So, Becca, thanks for doing this your second podcast ever. That’s awesome.

Becca Starks: Yes, thank you for having me. This is exciting. 

Dr. Bethany Fishbein: Yeah, thank you. It’s an interesting time because we work with mostly established optometric practice owners. So most of the people that I’m speaking to day to day are employers of young optometrists, and they have this vision of what today’s graduates are like, and then I get the opportunity to speak with optometry students and recent grads and they’re not necessarily like that perception at all. So hopefully, you can help us bridge the gap a little bit.

Becca Starks: Yeah, absolutely.

Dr.Bethany Fishbein: So, talk about yourself for a minute here. I want you to just talk about KMK and KMK Careers because when I want to data on students, I knew you were the one to go to. And so I want all of my listeners to understand your involvement with young optometrists today. 

Becca Starks: Yeah, absolutely. So KMK for those that don’t know KMK’s foundation is the KMK board review, which was started 18 years ago by Dr. Kyle Cheatham. And now fast forward 18 years we are inside of all of the 23 optometry schools nationwide. We have a team of optometrist instructors that traveled to all of the schools and we have a relationship with both third and fourth-year optometry students and 98, This is a big number to remember 98% of optometry students utilize KMK to pass their boards. So essentially we have a relationship with almost every single optometry student nationwide from the board’s perspective. And so we now have a new division of KMK specifically on careers which is just a natural extension of supporting those same students and finding their first career.

Dr.Bethany Fishbein: So you’re initially talking to these students when they’re students studying for boards. And then they hopefully pass boards and you know, move on and take more boards and pass those and move on. So what are the services that you’re providing for these students once they’ve graduated as doctors?

Becca Starks: Yeah, so it’s really fun. Personally, I am mostly an employee you’re facing so those that are looking for these candidates. However, we have a team of career advisors and all day long, they’re the luckiest ones in the world. They get to speak to these upcoming grads. So right now they are around the clock talking to those that are about to graduate here and a couple of weeks or maybe have graduated just recently. And uncovering what they’re looking for in a practice is really it’s a one-on-one relationship, so it’s totally free to students. They sign up to get a career advisor. They have calls with that career advisor to uncover what are they looking for what type of practice is it specific specialties, just anything that may be the true motivating factor as to why they want to go to a certain practice. And then essentially we play matchmaker so the career advisors speak to students all day long. I speak to employers all day long, and then we come together and get to build a bridge between the two and hopefully connect great candidates with a great opportunity.

Dr.Bethany Fishbein: Maybe it’ll be the next Netflix show after Indian matchmaking, Jewish matchmaking. It’ll be optometric career matchmaking. And be a celebrity.

Becca Starks: I think some of us would watch that, at least your listeners would probably enjoy that.

Dr.Bethany Fishbein: My husband and I would watch it so 

Becca Starks: same. 

Dr.Bethany Fishbein: So I mean, you’ve got a line of sight into exactly who today’s optometrists or today’s graduating class, today’s brand new optometrists are, can you give some facts and figures of what that class looks like?

Becca Starks: Yeah, so essentially, from a demographic perspective, it’s highly female. The data is showing 70% female and 30% Male.

Dr.Bethany Fishbein: 70?

Becca Starks: 70 Percent.

Dr.Bethany Fishbein: Wow. 

Becca Starks: Yes. And there’s information I believe you are going to be able to put in the show notes. But there is a really robust report. I believe it’s lots and lots of pages. I don’t remember how many but there are highlights within that on pages nine and 10 that give a really good but really quick summary of demographics of this class, within gender within race. There’s even financial information about how many needed to have financial aid, that sort of thing, and some really detailed information even about by school breakdown.

Dr.Bethany Fishbein: Are you able to roll through some of the things in there that kind of stood out to you?

Becca Starks: So the biggest thing that stands out to me is female and how as you it shows kind of year over year how that transition has changed from much more female than male as it was in the past. Same thing with race, I believe I don’t remember how many years ago it was but just not too long ago. It was predominantly white for professionals graduating and now that’s shifted to highly other races, whether it’s Asian or black or other races that are included in that.

Dr.Bethany Fishbein: And what about the financial piece? Because I feel like that’s such a big topic for new doctors. Is this need to pay back student loans? Do you have any stats on the amount of debt that students are graduating with? 

Becca Starks: Yeah, so the report itself shows 85% of students are utilizing some type of support financial aid, loans, and the average for a graduate right now graduating is about $200,000 in debt. So definitely it is.

Dr.Bethany Fishbein: That’s just from optometry school or that’s including undergrad debt?

Becca Starks: That’s actually a good question. We just get the stat of 200,000 and I assumed it was just optometry school. But that’s a good question.

Dr.Bethany Fishbein: So young, female, and any change in like age demographic? Or is it typically right out of college a year or two out of college starting into Optometry?

Becca Starks: Yeah, So typically, it is kind of a typical route straight out of undergrad and to optometry school. There is about of the 16-1700 graduates there are about 150 of those that are considered you know, like other avenues whether that would be part-time or returning back in at a later point in time.

Dr.Bethany Fishbein: Okay, so out of 1500 you’re talking about? Very typically, right? 1000 young, female, probably non-white doctors. 

Becca Starks: Yeah. 

Dr.Bethany Fishbein: If you had to say this is what’s typical. This is the majority. 

Becca Starks: Yeah. 

Dr.Bethany Fishbein: With debt?

Becca Starks: Yes. A lot of it. 

Dr.Bethany Fishbein: Okay. So, when you talk to this typical doctor and are getting into the field of matching into a career of their dreams, what are they telling you that they want? 

Becca Starks: Yeah. So it’s been interesting to learn that so the things that I came into this thinking people would want my background was actually at LinkedIn for five years before coming on to help launch this division of KMK and I thought it would be very different. I would think pay would exceed everything else. But, interestingly, location is the top deciding factor for these new graduates in determining which practice they want. Obviously, that is the hardest answer because no one can do anything about the location of their practice. But we can touch on this later. Kind of some ideas and tips for those to try to recruit folks into harder locations but definitely the location. Again, before and above pay even this work-life balance coming into play that is much more of a topic. Then I think it has been in years past. Not necessarily meaning, Hey, I want to come in and I want to never work. But this generation is much more just passionate about having that work-life balance of the work to live not live to work mentality. And so location, work-life balance, obviously pay, and structuring pay in a way that is understood to the candidate as well too. So being very upfront about what that pay is so that they know before even applying and putting that in a way that they understand what they actually can make because sometimes it can be hard with percent of production, knowing what that means.

Dr.Bethany Fishbein: So let’s go into those a little bit more and I want to just go back one to work-life balance because I think that’s probably the biggest misunderstanding between a doc maybe in their 50s and a doc in their 20s. This idea of working to live instead of living to work and it’s respectable and it’s necessary and mental health is important and it’s and life has to work for you. But these older docs, that was not their world. And so when I hear it, it’s complaints. They won’t work weekends, they don’t want to put in 40 hours. They’re asking for a four-day workweek. They’re like it’s coming across as we’re lazy. We’re not dedicated to the practice. We don’t want to be here we’re not going to work as hard as you and it. It creates a disconnect from the start like somebody interviewing, who says I don’t want to work every weekend. All of a sudden has all these judgments thrown on them that they probably don’t deserve. Do you see that with the docs that you’re talking to and you’re matching?

Becca Starks: Oh, absolutely. Yeah, it’s the same thing I hear to have. You know, that’s typically the demographic of employers that I’m talking to all day long to have, you know, they came out and maybe cold started or they came out and bought a practice and they’ve been doing it for 20-30 years and like. What?

Dr.Bethany Fishbein: Right and they remember, or maybe they’re still working 70 hours a week and they’re there, you know, every day in the practice and their day off there when the cleaning themselves because that’s what the owners do. How do you coach of 50-something and 60-something-year-old practice owners into understanding that it’s not laziness and it’s not to they don’t want to work?

Becca Starks: Yeah, so that is it is a big misconception of the students that it is laziness, and specifically, most students are expecting to work at least one to two Saturdays a month. So it’s not that they’re coming in and saying I only want four-day workweeks, and I’ll never work a weekend. They are expecting a true full work week and one or two Saturdays per month. To your question about how to coach an owner in that situation. I think it’s just taking a step back and looking really high level at your practice as a business and I’ve had this conversation with many owners of I don’t know why we are open Saturdays, honestly, we’ve just always done it and so determined are we doing this because it’s just always been done or when determining this because it is a true business need. And so same thing with later hours or that sort of thing. If it is a true business need 100% voicing that to a candidate that’s a friend and that’s that’s great, but there may be situations where again, it’s just we’re doing this because it’s been done forever. And actually, our patients wouldn’t mind if we didn’t have a late night or we had a late night instead of a Saturday or vice versa.

Dr.Bethany Fishbein: Do you think docs have like a little bit of that? It’s like that hazy mentality? Like I went through it I put in my time therefore you you need to.

Becca Starks: I think it could be a little of that. Me not being an optometrist. I have to tread lightly because I have not earned my dues. But in the conversations that I’ve had, I think it is a little bit of that at least.

Dr.Bethany Fishbein: Yeah, I worked weekends for 23 years. I’ve never missed it Saturday. I’ve never called out sick. And now I’m going to change my whole practice because this 24-year-old kid doesn’t want to work, like there’s that so what are the students are the new grads thinking about these practice owners, doctors who are in a different demographic from them because there’s got to be misconceptions going that way also.

Becca Starks: Yeah, I don’t get to hear a ton of the misconceptions from the student side. But I think there’s just both sides can teach each other something right like maybe that student can come in and show this business owner who’s been doing this forever, like, wow, I could totally do this differently. And, wow, I’m kind of relieved that you came in and brought up the idea of work-life balance because I as the business owner, really needed that, and wow, my life is different because of it and vice versa. There’s obviously so much that the practice owner can teach and pour into these new grad optometrists. But as far as misconceptions from them, I haven’t heard any to be honest. 

Dr.Bethany Fishbein: I hear that they look at a private practice. They think they’re not going to be paid as much. So they’re thinking that not necessarily that the owner is cheap, but that it’s not. It’s not as profitable, therefore there’s not as much money in it for them. You didn’t mention the mode of practice. You talked about location, work-life balance, and pay. Are students coming out looking for commercial opportunities? Are they looking for private practice or looking for MD offices? I mean, obviously, students are looking for each of those, but what are you seeing most frequently?

Becca Starks: Yeah, great question. So motor practice is very important and private practice remains. Top of the list for I’d say close to 90% of the new grads.

Dr.Bethany Fishbein: Serious?

Becca Starks: Yeah, because I hear the same thing. I hear a lot from private practice owners that say that almost come to the call with me very nervous, like “Becca, what’s going on? Why might all the new grads want private equity and why do they want retail? And can I really afford to hire them? Because it sounds like they’re throwing all the money in the world with them.” And then it’s interesting because we have that ear with the students to hear what they’re looking for. They’re very, very few students that we’re working with, with the class of 2023 that will even consider an opportunity that is not private practice. So there’s just a handful of folks that have said all maybe look at private equity or retail, but the vast majority say I truly, truly, truly want to private practice and there’s even a really good group that says, “Not only do I only one a private practice, but I already know that someday I want to partner slash buy this practice as well.” 

Dr.Bethany Fishbein: Do you think though that it’s, it’s like self-selecting a little bit because retail opportunities are so easy to come by? That they might not even consider needing to work with a company like yours? They just need to go on Ziprecruiter, Indeed, and type in optometrists job and the geography they want and they have their choice. Are you talking to them before they’re job-seeking?

Becca Starks: Yeah, so we actually start a process with them a year before they graduate. And so we have them fill out a profile with us it looks just like a LinkedIn profile, but it’s specifically for KMK, and go in and select all of the different types of practices that they’re open to. And so, we have both from the data from what they input on their profile and then they all have a one-on-one call with a career advisor as well. And so that’s where those points come from, both in the data they enter and then the conversations they have with a career advisor.

Dr.Bethany Fishbein: And is that when a student should be starting their job search is early in fourth year?

Becca Starks: Yeah, so we were really surprised in the timeline as well that a lot of students start having conversations about the fall before they graduate. So this class of 2023 they were starting interviews, October timeframe, and then a lot of them were during their Christmas break, timeframe holiday break, going on visits to practice owners. And then as soon as the New Year transitioned over there were many that were in contract. So definitely, Fall time is like you can feel good. About yourself being ahead of the game, wintertime is still very safe, you still have a lot of opportunity to be reaching out to candidates, and then as we enter into more of the springtime, a lot of I’d say probably half if not more of those that we’re working with are 100% in contract ready to go.

Dr.Bethany Fishbein: When you start working with them. Is there any issue with students who are starting the search and still haven’t passed their boards or won’t have the credentials to work when they graduate?

Becca Starks: Yeah, Yep. There is information from ASCO also about passage rates. And it goes into detail even of school by school, but it essentially shows year over year the decrease in passage rates, and I think we’re at about 70% passage rate, right now. 73%. And so there’s a huge population of students that don’t pass typically it’s part one where the struggle is and so there are some students that will even graduate and still have not passed boards. And another misconception there is, “Oh, these students are lazy or they’re not understanding the information, and I don’t want those students because they won’t be good doctors”. And completely not true. Those are students that could either be not very good test takers. These are also the population that came into optometry school right in the heart of COVID. There are some that have just had really rough life events around the time that it is to take boards and so but they are all great people that will be great doctors, they simply just need to pass this test. Many of them have had really great GPAs some of them have other degrees that help them with the practice management side and so it’s just a matter of getting past that one test or many of them.


Dr.Bethany Fishbein: And how does, how did they navigate that with the job contract like, will an employer sign something with a student who hasn’t yet passed boards?

Becca Starks: Yes, we are running into that actually part one. Board scores were just released this past week. And it was a lot of that there was a lot of celebration and there was a lot of sadness around those that didn’t pass. And the good news is, I don’t know that I’ve come across a single employer partner that we work with that isn’t at least open to the idea of bringing on someone that’s graduated in kind of a super tech role. It’s kind of how we position it to practice under that optometrist owner until they graduate and we even have some that say, “Hey KMK I know that you, as an organization, do great at coaching them and helping them after they fail boards.” I will even invest in that side of the house to ensure that they can pass boards not only to show that, hey, I believe in you and the hardest time in your life student but also that gains them a really loyal employee that again, is going to be a great doctor has just had trouble taking this one test.

Dr.Bethany Fishbein: Coming in as a super tech though, obviously, they’re coming in at a lower pay scale and they would come in as an optometrist, and they have those student loans. So let’s talk about compensation of obviously it’s going to vary around the country and regionally and how many hours and all of that but what is it that a new OD is looking for as far as the ability to earn money?

Becca Starks: Yeah, good question. So, specifically with this new grad population, the way that I kind of coach, the employer partners that we work with private practice owners is, a lot of times they’ll come into the call and say why pay 16% of production, but with this new grad population, they aren’t able to really wrap their brains around what that is, you could have a $1.5 million, your practice and they still just don’t, they can’t really understand that. And so the recommendation that we give is to at least have some sort of salary and we have information and concrete data on specific areas of the nation. So by all means, if, if we can support you in any way with that, I’m happy to to make sure that you’re competitive, but having some type of salary listed up front is what’s going to entice these new grad population because they can wrap their brains around 140,000. They can’t necessarily wrap their brains around 16% of production. And so totally understand, then obviously the argument private practice owner, I hear you what’s going on in your head is. “Well, I need to motivate them to work hard. Like if I just give them a salary, then what’s the motivation to work hard”, and so there’s been kind of this really nice avenue that we’ve taken with a lot of partners that’s worked well in that advertising a salary a little higher than you probably would have normally, but then decreasing to a really low percent of production, so that there’s some salaries that’s there that’s enticing to a new grad, but a lower percent of production. So for the first year only, so year one higher salary and lower percent of production, and then having that shift for year two and year beyond your two to a lower salary, higher percent of production. And so what that does is again, entices this new grad to apply, and even want to learn more about your practice because there’s a salary, but that little bit of percent of production will get them to realize in their first year of working well. I’m doing the math, and if I would have went on the percent of production, I probably would have made more than my salary. This is making sense this is motivating me to work harder. And then again, you can even have it in the contract that upon year two that shifts to a lower salary that’s guaranteed and a higher percent of production. So as they’ve gotten their feet wet, they’ve learned they’ve been mentored that first year shifting then into percent of production.

Dr.Bethany Fishbein: So you’re coaching your doctors to do a salary plus a percent of production?

Becca Starks: Yeah, that’s pretty typical. 

Dr.Bethany Fishbein: And what about benefits and stuff like that is that important? Yes, it is important. Is that something that a brand new grad is going to give enough importance to that it’s going to help them decide one place versus another? 

Becca Starks: Yeah, such a good question. So I’ll give both sides just agree very important. I would say the majority of private practice owners that we’re working with are offering some sort of benefits, whatever that might look like. Some are very comprehensive, some are very “Hey, we will pay 50% of your medical and leave it at that.” But now that we are in this lane of there is competition from private equity and from retail. Those are just a no-brainer. In those avenues. And so to remain competitive from that regard. They will get a full package of 401K’s with matching with benefits with PTO, all of those things, if they’re considering a retailer or a private equity opportunity in comparison to your private practice opportunity. And so, again, I think most I talked to very few that say “Hey, I’m just percent of production and I don’t give any days off you just you if you’re here you make money if you’re not, you don’t but you can take whatever days you want type of thing”. I have a handful of those but for the most part, most private practices are offering the salary with percent of production, at least something towards medical, and then most do have a 401K whether there’s a match or not with that.

Dr.Bethany Fishbein: Are there other intangible benefits, other things that would make a practice more attractive?

Becca Starks: Yeah. So I think the thing that’s so such a great opportunity with all of the listeners that would have that are trying to hire than our private practice owners that have been doing this for years to a new grad specifically is mentorship. And so those that are willing to do that are excited about that. Well, maybe “Hey, I haven’t really even thought about that. But I’m gonna share over the last 20 years, I really have learned a lot that I could pour into this next upcoming generation”. And so being very vocal with that, even in a job description, or whatever it is that you’re creating, to entice candidates to come your way and some people put a really extensive plan behind, “Hey, we have a weekly meeting, and you get lunch hour with me every week and we will cover XYZ and some it’s kind of informal of just “Hey, I’m going to be with you I’m alongside you. You can call me when you want”, whatever that looks like, or even if you haven’t, some team members that are fairly recent grads, being able to vocalize that to have hey, we’ve got folks that I brought on board as new grads and couple years later looking them go and so the mentorship side is again that intangible free opportunity that I think a lot of people don’t even necessarily recognize they have the ability to give.

Dr.Bethany Fishbein: Is it mostly clinical mentorship they’re looking for? is it practice ownership? like when you say mentorship, what are they hoping to learn from you?

Becca Starks: Yeah, definitely medical at the top of that, but there are again, those those candidates that just know that they know that they want to be very involved in the practice management, the business side of the house. And so for those candidates that are interested in it, being willing to say “Hey, here’s I’ll show you all of our programs and all of our software and how I design the day and this is how I designed the business side of the house”, and so in those situations for folks that are interested in that side, I think it’s important to have just kind of an open door policy of “I’ll show you all that. I’ll show you that number. So I’ll let you in on this.”

Dr.Bethany Fishbein: So for practice in a particular geographic area, if you can get your salary and benefits close, but they don’t necessarily have to be higher. They just have to be within range and you can kind of check off all the other boxes. Is there a type of practice like heavy medical versus refractive versus specialty that people are looking for?

Becca Starks: Yeah, so definitely looking at highly medical. And then what I would also say is kind of another somewhat intangible, but if practice owners are open to new specialties that maybe you don’t have in your practice right now. But hey, if there’s somebody who comes in and is passionate about whatever it may be, and they want to bring that into my practice, that’s a really enticing thing for a candidate to really see themselves. They’re in the long haul of “Wow, I’m passionate about myopia management and this practice says, by all means bringing that on.” That’s such a great thing to be able to offer to a candidate and so definitely, medical and specialties are really where the candidates are wrapping their brains around of how do I see myself there.

Dr.Bethany Fishbein: And what if you’re in rural Wisconsin, where there’s just not a huge population of optometrists looking to settle? What’s the best way for a practice like that to set themselves up to find somebody to join because so many of those are great opportunities to become part of a community to ultimately partner buy a practice have a really low cost of living like it’s how do they make themselves attractive or show how attractive they are I guess I should say.

Becca Starks: Yeah, and I think that so often because I get the luxury of talking to these practice owners in some of these more rural areas. And every time I’m just like, Wow, if I could just record this and let all of these candidates see this owner care about the type of patients they get to see a lot of times it’s the smaller communities that because there’s not a nearby ophthalmology or another office like those are the most medically focused practices. 

Dr.Bethany Fishbein: Absolutely. 

Becca Starks: Yeah. And so, so often I feel better. Oh my gosh, if I could just package this up and get a candidate to truly wrap their head around it. So one of the things that we do on the candidate side is our current advisors do as soon as a student comes in and says, “I only want Miami in New York and LA”, we try to mentor as well and show your kind of cost of living and let’s truly take a look at this and let’s look at your lifestyle and look at

Dr.Bethany Fishbein: Miami, LA, how about rural Wisconsin?

Becca Starks: Right? Yep. 

Dr.Bethany Fishbein: And consider Minnesota.

Becca Starks: Exactly. We play that game all day long. Yep. And then to the practice owners, a lot of what I tell them is, they’ll tell me I say they get to brag. So give me your brag book, when they come on as a partner to me, tell me what’s so great about your practice. And then they’re typically ready to end the call and I say, “Okay, based on your area, we also want you to brag on the geographic location just as much as the opportunity and so getting a candidate to truly understand what their life is going to be like, not just when they’re at work with you all day, but once they leave work, and what does this community look like and what can I do there? Is it great for hiking, is it great for the music scene, and the art scene? Is it great to raise a family and maybe I’m not thinking about that right now. But in the next couple of years, I will be.” And so I always say “Somewhere in your job description, however, you want to do it. It’s a post that you’re putting on to kind of an Indeed or an AOA. Having information, just typed information about your geographic area and what makes it so great. And then also, the other added thing you can do is you can always create videos.” Videos are I feel like that’s kind of how we’re all digesting content at this point. And especially this generation of these new grads, and so if you can even do a quick it doesn’t have to be professionally shot but videos of you just speaking informally, almost as if you’re speaking to a candidate who wouldn’t be right in front of you talking about again, envisioning their life there, the more that a practice owner can make a job description or job post about the candidate instead of themselves. The better that that’s going to relay to the candidates have just really getting to understand “Okay, this isn’t what I thought I was thinking Miami, but now I can kind of envision how my life could be in Wisconsin.”

Dr.Bethany Fishbein: That’s a really strong and valid point. Because when I think about a job ad, it’s all about what we need and what we want. We’re looking for an optometrist to work these hours to do this and when I’m interviewing candidates for Associate optometrist, but really for any position I’m always sensitive to an applicant, who all they’re telling me is what this job is going to do for them. Right. So I’m very critical of it as an employer when they’re like, I’m looking to build my clinical confidence in myopia. I’m looking into, you know, whatever. And I think what are you going to do for me? But in the ad, maybe it should be the other way off, Here’s what I’m going to do for you so that they’re interested and intrigued by the post enough to then come in and want to tell me what they are going to do for me so

Becca Starks: Absolutely 

Dr.Bethany Fishbein: Cool. 

Becca Starks: We even have one it’s a Power Practice member that wrote a personalized it looks just like a letter you would receive from your grandma in the mail and it was so different and so eye-catching and so engaging. It was truly just a personalized letter, Dear Candidate, and then it just spoke really informally like, Hey, I get it. Words are hard, school is hard, but here’s what it would be like living here. Imagine if you could leave work and go out and do this, this, and this and your two hours within this big city so you can go catch a basketball game and be back home at night. And so it was just very, again trying to get that candidate to envision their life not only with that practice but in that geographical location. And so that was an incredible example. 

Dr.Bethany Fishbein: Did it work?

Becca Starks: We’ve gotten some interest. We don’t have anybody signed on yet, but it has enticed interest.

Dr.Bethany Fishbein: And talked about KMK a little bit again, just before we close. So if a practice owner is looking for an associate, they can reach out to you or how do they go about tapping into this database network matching service that you guys have?

Becca Starks: Yeah, absolutely. Yep. I would be the point of contact Becca Starks. And I’m sure you can put my email in the show notes, but it’s just Becca@kmkodcareers.com. And yeah, we typically just do a really informal introductory call and learn about the practice, learn about what they’re looking for. And then go over kind of our offerings. We’ve got two different offerings to choose from, just depending on what the practice owner is looking for. And then yeah, we just go from there. It’s really simple. It’s free to be in agreement with us and having us promote a practice. And so basically, we get that agreement going and then our current adviser starts promoting any of our partners that we’re working with. And then essentially once we have a student that is a great fit, we play the matchmaking game. 

Dr.Bethany Fishbein: I love it. Thank you. I think this is valuable information for new grads to help them understand what they’re going out into and some of the misconceptions they might be facing. But hopefully, we did our part today to try and reduce some of those and really give today’s employers a more real picture of new grads who are looking for jobs. So thank you so much for taking the time to do this and give this service to all of the optometrists out there.

Becca Starks: Absolutely. My pleasure, Bethany. Thank you. So much. 

Dr.Bethany Fishbein: Thank you


Read the Transcription

Adam Cmejla: If we’re saying that the $100,000 is going to be squarely in the 32% bracket, and someone is telling you, hey, go out and buy this piece of equipment to reduce your tax bill, on what planet does it make sense to part ways with $100,000 to avoid spending $32,000 to the government?

Bethany Fishbein: Hi, I am Bethany Fishbein, CEO of The Power Practice and host of the Power Hour Optometry podcast. And I am back with a popular returning guest of the show. This is Adam Cmejla. He’s the founder of Integrated Planning and Wealth Management, which is a firm that does financial and retirement planning specifically for optometric practice owners. We always have interesting and insightful conversations. So Adam, thank you so much for coming back. And I’m looking forward to our talk today.

Adam Cmejla: Thank you, Bethany. It’s a pleasure and privilege to be back. And I just saw the announcement that your top five podcasts, I think it was of 2023. And I think one of my conversations made that coveted list. So I am excited to be back and glad that our conversations resonate with your listeners. So that’s pretty cool.

Bethany Fishbein: They absolutely do because our clients and my listeners also tend to be the type of business owners who have goals for their business revenue. They want to build great practices, but not just to do it. They want to give something to their community. They’ve got big meaning goals, and then they’ve also got financial goals. So they’re always interested to hear what you have to say.

Adam Cmejla: There’s a why behind the what, right?

Bethany Fishbein: Absolutely. This is the time of year where we start to think about what’s happened in the year that’s ending and then start to do planning for the year ahead. Starting in October, it tends to get a little bit reflective, right? Where did we expect to be this year? Are we there? Did we hit it? Did we pass it? And then what comes next? Talk about some of the things that as the year comes to a close, you think are important to be looking at from a money perspective.

Adam Cmejla: Thank you for the question. And again, for the opportunity to share in this conversation. First of all, I would say that if you as a listener, if this is the first time that you’re thinking about opening up your financials and measuring where you are at relative to any potential benchmark that you set for yourself at some point in 2022, we should probably have a conversation about increasing that cadence just a little bit more than when there’s less than two months left in the year. So my general rule on that is to evaluate financials on at least a quarterly basis.

There are some things that we could opine in the practice that should be measured on, dare I say, a daily or a weekly basis, surely a monthly basis, and again, on a quarterly basis. But the most basic aspects that I would encourage a practice owner to think about as it pertains to the financials of their practice is let’s start at the high level and then we can get, depending on where someone is at in their comfort level of understanding their financials, and we’ll talk a little bit about this here in our conversation today as well, is let’s just start with some of the big rocks.

And the three biggest rocks that I think I can throw out there for practice owners to look at is let’s make sure that we’re looking at our gross revenue, gross collected revenue. Let’s define that. I do not care what you bill, I care what you collect. This is a financial planning-focused, a financial metric-focused conversation. So we can’t pay the rent with billed, we pay the rent with collected. So gross collected revenue, then we look at gross profit, which is essentially your gross revenue minus your cost of goods to give you your gross profit. And then we look at all of the other operating expenses in the practice to eventually end up with that net operating income number of the business.

Essentially, we want to know as the practice owner, knowing that the practice is an investment that we own, and it provides two things to us as the owner of the investment. It provides consistent cash flow, both in the earnings that we make as a practicing optometrist, as well as a return on the investment for owning that practice in the form of net operating income. So assuming that you as the practice owner are being paid for working in the practice in some capacity, both as a clinician, as well as possibly in some administrative capacity, we still want to see what you have left at the end of all of that.

So we certainly want to make sure that we don’t just own a job. Because candidly, if there’s nothing left at the end of the profit loss, that is a very, very stressful job to own. And you might think about, in a joking way, I’m sure you’ve had conversations with practice owners, I know we’ve had conversations with practice owners that are lower in revenue, where essentially they own a job. There’s not a lot of there there left at the end of the financials. And so we sometimes have very candid and very tough heart to hearts to say, is the juice still worth the squeeze with this practice? And what do we need to do to make sure that it is providing a return on investment for the debt, the stress, the energy, and the time that the practice owner spent in the beginning and ongoing to open and run the practice?

Bethany Fishbein: Am I allowed to add one to your top three? Can we?

Adam Cmejla: Of course. This is your sandbox, Bethany, I’m just playing in it.

Bethany Fishbein: I think that that next step of not only net profit or net operating income, but true cash flow is an important distinction for a lot of people. Because I feel like I’ve been having conversations recently with practices that have good net operating income. And so they’re looking at their financials, they’re looking at the P&L, and on paper, it looks like they are very profitable.

Adam Cmejla: And they check their bank account, right? Where did it all go?

Bethany Fishbein: Exactly. They’re paying all of their debts. And with a lot of optometric practice owners investing in very big ticket items as far as equipment that are trendy lately, the amount of debt service that they’re doing leaves very little in actual money. I find that my conversations are shifting and we’re very cash-flow-focused. Because it’s nice to know on paper that you quote made $500,000. But if you only get to keep 80,000 of that, it’s not nearly as fun.

Adam Cmejla: Correct. So to your point, exactly, right? I don’t care what you make, I care what you keep. And that can be taken through two different filters, right? If we look at it just in the vacuum of the profit loss statement, yes, we would certainly want there to be net income.

If we have a negative net income, we have a problem in and of itself that we know, assuming there is debt on the books of the practice, is just going to be amplified because they’re burning through cash flow. And they’re essentially having to finance cash flow, because the cash flow from operations isn’t there. There’s no there there.

So that’s why when we look at financials, and we go through the practice financials, and the big three, as we call them in our firm, your balance sheet, your statement of cash flow, that statement of cash flow, in our opinion, is one of the more underutilized measures of financial success. Because to your point, it answers that direct question. It adjusts for cash flow in and out of the practice, based off a net operating income.

For practice owner listening right now, if you’re in a position to pull your financials, and you look at the bottom number of your profit loss statement, it should be the first number at the top of your statement of cash flow, because you have net operating income at the beginning of your statement of cash flow, and then there are adjustments to cash flow. And to your point, the single biggest adjustment to cash flow that typically exists in a practice, in an established practice, is going to be debt service repayment. Because remember, principal repayment is not a tax deductible expense to the business.

The interest that you pay on that debt is a tax deductible expense, and you should see an interest expense line item on your profit loss statement. Public service announcement to all the listeners, that is one of the low-hanging fruit places that you can go on your business tax return to ensure that interest expense is actually being accounted for on your profit loss statement, and that any debt that you have is on your business tax return. We’ve actually had a few practices where that has been missed from the tax prep process.

How? I’m not sure. That’s not a conversation that’s relevant for our time here today, but it is a good audit, if you will, self-audit, that practice owners should be looking at when they’re evaluating their business tax returns.

Bethany Fishbein: As you are looking at that, and now you’re thinking towards the end of the year, a lot of times people start to talk to their accountants, an accountant’s going to do a year-end tax planning session.

Adam Cmejla: Oh, I know where you’re going with this already, Bethany.

Bethany Fishbein: The question arises when there is money there, what to do with it. Because if you just keep it in the business, you don’t do anything, you’re going to have to pay taxes on that money. So we start to get questions of, should I spend it? What are your thoughts on that?

Adam Cmejla: If you listen real close, you can hear a can of worms cracking open, Bethany. It is one of the more, I think this will go over well, one of the most myopic statements that a practice advisor, quote unquote, can give. And I understand why CPAs do it. Before I just throw the entire accounting profession under the bus, I understand why they are doing it. Because whether implicitly or explicitly implied to the client, the CPA thinks that their job is to reduce the tax bill as much as possible. Essentially, they don’t want to be the messenger come April 15th telling them, if you file your practice tax return by March 15th, which is the business or the corporate return deadline, you should know, relatively speaking, or closest to the pin type analogy, what your tax bill is going to be.

CPAs don’t want to be that messenger giving you the news that you’re going to have to write a $40,000 check. I could spend the entire rest of this conversation demonstrating and illustrating a process as to why a practice owner should never be surprised by what their tax bill is going to be if you are doing systematic, proactive planning with your team throughout the year. Having said that, and kind of planting that flag in the sand, that is the value that CPAs will bring to the table. Again, whether they’ve explicitly told their client that, or they just make that assumptive implication that, oh, I got to figure out how to reduce this tax bill.

Hey, go out and buy a bunch of equipment, or my favorite, hey, go out and buy a new car, and you can depreciate 100% of that in the practice, and we can just put that on your depreciation schedule. My point in that is, CPAs and, dare I say, ODs as well can sometimes be a little bit more myopic than they should be as to what they should do with the cash flow in the practice because we want to get a return on our investment.

And a return on investment can be measured not just in the financial sense, mind you. I know, as you mentioned and alluded to in the beginning of our conversation, I think the reason that you and I candidly get along so well in these conversations and why the listeners of both your podcast and our podcast, 2020 Money, resonate so well is because there’s an additional intention and purpose behind what someone’s doing rather than just the money. There’s a why behind the what. And so when I talk about the return on investment, we can get a return on life in what we’re talking about. So spending money and taking it out of the practice and actually paying taxes on that money, oh my gosh, Adam said pay taxes.

Yes, I did say pay taxes because what that means, let’s just use the example. If I have $100,000, and that is essentially, again, just to make the math easy here and for conversation, dare I say, argument’s sake, if I have $100,000 and based off of everything in my life right now, that $100,000 is going to be taxed at the 32% tax rate. Mind you, just quick sidebar educational moment here, we have a progressive tax system in our country. What that means is that just because you have $100,000, I’ve heard this from ODs where they’ll say, oh, well, I need to reduce my income into the next tax bracket because I don’t want my income to be taxed at the next tax bracket. We live in a progressive tax system, which means that you fill up, think of the 10, 12, 22, 24, 32 tax brackets, think of that as kind of like an upside down champagne tower, right? We fill up the 10% bracket, and then every dollar over that limit goes into the 12% bracket, every dollar over that goes into the 22, et cetera.

Bethany Fishbein: So it’s not changing how much you’re paying on the whole amount.

Adam Cmejla: Correct.

Bethany Fishbein: You’re just paying the higher percentages on the amount over the threshold to get into that percentage.

Adam Cmejla: That’s exactly it. So that’s what we mean when we talk about having a progressive tax system. So back to regularly scheduled programming, if we’re saying that the $100,000 is going to be squarely in the 32% bracket, and someone is saying, someone is telling you, hey, go out and buy this piece of equipment to reduce your tax bill, on what planet does it make sense to part ways with $100,000 to avoid spending $32,000 to the government? Now, I understand you want to stick it to the man, and we don’t want to pay the IRS that dollar more than what we’re legally obligated to pay, and we certainly don’t want to leave a tip. But I would rather have $68,000 left over free and clear to make a decision on what I want to do with that, including solving for joy in my own personal life, with my family, with my friends, with my experiences.

The practice is in service to me, and I want the practice to provide for the things in life that I want to do. Does that mean that I have to essentially pay the toll or pay the tax on that profitability to take that home? Yes, possibly, right? I’m not saying that that’s the absolute answer. But on the other side of that, it doesn’t make sense to spend $100,000 and part ways with that just to avoid sending $32,000 to the government. That’s the binary either-or scenario that just drives me nuts when I hear those either-or positions and recommendations being touted online, discussion forums, groups, etc.

Bethany Fishbein: What you said is so important because in defense of accountants, sometimes they’re giving that information in answer to a question. Because around this time of year, optometrists do start to ask, what can I do to reduce my tax burden? And what can you do to reduce your tax burden? You can buy equipment that will reduce your tax burden. But to your point, and I agree with you fully and completely, sure, you can reduce your tax burden. But if you buy something that you don’t need or didn’t intend to purchase, or if you’re giving that money to someone else, utilizing it to bonus staff, etc., then you get zero instead of getting the 68% or whatever that would remain after taxes.

One of the things that I’ve used just as a guideline for myself is during that period, if there are things that have been on the list, and we’re in a situation where we have good income in a year and are likely going to be paying taxes, because that’s what happens when you have good income. If there are things that we can check off the list in December instead of January, February, we will absolutely do that. One of our practices, I’m looking now, we’re replacing window treatments. It’s a small dollar amount, but still, it’s something that we’ve been meaning to do and now is as good a time as any, because we want that expense in this calendar year. But something you haven’t been meaning to do is a whole other story.

Adam Cmejla: Correct. Bethany, that’s the beauty and why we love having conversations and why I know you love working with practice owners as well is because unlike an associate or, dare I say, any other W-2 employee, a business owner has a lot more flexibility when, how, and to what extent the dollars that the business generates fall on a respective tax return. You’re exactly right. You can choose to buy the window dressing on December 31st or January 2nd.

That decision is going to dictate which tax return, which fiscal year profit loss, that expense shows up. And you can get a little bit more surgical and become a little bit more precise with allocation of cash flow in the practice. So it’s a great example of demonstrating control, proactiveness, and intentionality with how you view the dollars in the practice.

Bethany Fishbein: So if you make the decision to not spend, talk about savings within a practice because I think that’s also something that the mindset has shifted a little bit, especially as interest rates have climbed and having money sitting there is not as unattractive as it was two and three years ago when we had this conversation and an interest rate was at 0.1%.

Adam Cmejla: Exactly. And there’s a number of different platforms that have been rolled out that allow business owners to now essentially provide their own treasury management services. So treasury management used to be, or it still is, excuse me, larger organizations that would have a significant amount of cash on their balance sheet to cover day-to-day operations, suppliers, payroll, expenses, etc. But there’s a true opportunity cost if a business has $10 million in cash on their books, even in the low interest rate environment that we’ve been in for the past 15 years minus the last two years. When you have a few commas in that number and a lot of zeros, even small interest rates can matter.

So you would have treasury management services, you would have a treasury management officer at a bank that would be utilizing money markets, short-term treasuries, etc. to generate some type of yield for that cash in the business. Now with the combination of technology and a rising rate environment that we’re in right now, there are various platforms out there that exist that allow practice owners to essentially set up their own treasury management services in the form of high-yield savings accounts. You can move money into those accounts and you’re seeing… If you just google high-yield savings accounts, you can find something in the high threes to low to mid fours.

Not every one of those savings accounts will allow businesses to set up. Within our firm, with our relationships, we do have a platform that we’re using. It’s only available to our clients and there are others out there that are available to other business owners. So this isn’t something that is absolutely exclusive to us. But my point in that is, there are platforms out there that allow you as a business to set up the business account. If you start moving money back and forth in between personal accounts, like if you have an online savings account that is technically for the business, but it’s in your personal name, you can move money back and forth from that.

It’s going to create some line items on your reconciliation and within your accounting that your CPA is going to have to deal with, that your bookkeeper is going to have to deal with. If you transfer money out of that and then transfer it back in, there’s some adjustments that need to be made. Certainly not a hurdle that cannot be passed. Just make sure that in the spirit of proactiveness, you communicate with your accounting team what you’re doing and what that account is for. That it’s not going to be something that I want to distribute. I do not want this as a distribution. This is essentially money that I want to keep in the business. Put this on my balance sheet in my business. You want to keep that money on the business’s balance sheet.

It just depends on the legalities of how you actually set up that account. That’s one way in which you can really start to leverage cash that’s just sitting idle in the practice on the positive side of what we have with a rising rate environment. Cost of capital, yes, we know that has gotten expensive relative to what it was a couple of years ago. But that’s one way to think about putting money to work that you don’t necessarily have a direct, time-based, goal-focused purpose with that money. Does that make sense?

Bethany Fishbein: It does. So what’s your guideline that you give clients on the amount of that not directly goal-focused money?

Adam Cmejla: Two months of operating expenses minus owner salary and cost of goods. That’s the bare bones minimum that I would want to have as essentially working capital in the practice that is going to be able to be used to essentially manage the ebbs and flows of cash flow as we’re waiting for third-party payer reimbursements, etc.

That’s what I would recommend keeping. I’d recommend keeping at least one month in your business checking account, the operating account of the practice. If you have a lot of ebbs and flow, if maybe your account’s receivable isn’t as tight as what you would maybe like it, and third parties, your 60 to 90 day looks a little bit bigger than what you would care to admit, maybe you go a little bit higher on that two months of operating expenses.

Everything above and beyond that, if you want to keep it in the practice, but you don’t necessarily have a goal associated with it, I would absolutely get it out of the business operating checking account and into some type of vehicle like what I’m talking about.

Bethany Fishbein: For that next level, that next bucket, I guess, this is where you start to think about things that you might be spending on in the future. So it’s easy if you know you’re trying to replace something, you’re going to save up for it, or you’re thinking about getting a second or a third location, or you’re looking to put a down payment on a building, that’s a tangible target. But in this current environment, where people aren’t borrowing as easily, and they know that they’re looking at rates of seven and a half, eight, 9% sometimes on equipment. Is it smart to save for not a specific thing, but like, well, my camera is a couple of years old, I think maybe in the future. Is that what that next account is for?

Adam Cmejla: It is. And I wish I had something better. I wish I had something in the intermediate that we could say, here’s a great place to park your money and have greater than 4% growth, four, four and a quarter, four and a half percent growth. We’re recording this. Happy Halloween. Recording this at the end of October here in 2023. And with where the rate environment is at right now, obviously, that’s dynamic and that assumingly will certainly change going forward. We hope it goes down. We hope it doesn’t go up from here. But there’s not really an intermediary when we can still use the word safe, guaranteed.

I’m using those two words somewhat interchangeably, because at the end of the day, if we know that it’s not if, but when we’re going to use that, our general rule of thumb is, if and only if the timeline is about five years or more, would we recommend a practice owner put any type of money, quote-unquote, at risk in some type of investment, whether that be the market, investing in another business, investing in a different piece of real estate, something that doesn’t have the safety and dare I say the word guarantee attached to it. Five years or more is that general, somewhat safe rule of thumb that we would say.

If it’s more than five years, great. Now we have a little bit more of a Pandora’s box to look at and evaluate different investment vehicles. We can start looking at, I mean, even just looking at five-year treasuries. If we still want to use that word guarantee, we can look at if we have the timeline in place to know that it might be five, six or seven years, not to get too technical here, but where the yield curve is right now, that may not even be the best option to look at five year versus 10 year treasuries.

There’s all kinds of different things and the timing of when you’re going to be having that conversation is certainly relevant. But when we’re thinking about buying things in the future at the current cost of capital, where it is right now, dare I say banking on yourself and just stockpiling that cash to eventually pay cash for it, what a novel concept, Bethany, that we pay cash for something and not incur the interest expense and rather get paid. Instead of paying interest by financing something, we’re actually keeping cash ourselves, earning something on our cash rather than paying it. It’s a novel concept.

Here’s what I’ll say, last comment before I ask for your feedback on that statement. The reason that anybody, ODs included, struggle with that type of concept is because you cannot underestimate the emotional connection that we have to cash. It’s why if I tell you to go out and buy something worth $1,000 and put it in your credit card, even if you pay your credit card off on a monthly basis, that’s how we run our household. We have our normal monthly expenses outside of the mortgage and maybe a dozen other expenses that get debited from our personal checking account.

Almost every other expense in our household gets run on a credit card. Gotta love those Costco points, right? And we have our credit card set to auto pay every single month. So we’re not incurring an interest expense by doing it that way. But I can promise you that if you were to ask myself, and I mean, I’m asking myself and I’ll answer you honestly, and I promise if we were to bring Andrea in here right now and ask her this question, my wife, she would have the same, dare I say, if not even more of a feeling towards this. If we had to pay cash, whether figuratively or literally by writing the check or giving straight up cash, there is a much bigger emotional connection to parting ways with that cash that we’ve already accumulated than there is to borrowing from somebody else and then paying that back. That’s why it is hard for practice owners to do that.

Bethany Fishbein: That’s the debate because lots of people are in a situation where they can write a $45,000 check for a piece of equipment and they struggle for that reason to choose to do that because if I do that, I’m going to have $45,000 less today, where if I finance it, I’m still going to have $43,500 because I just made a payment and I can use the instrument to make money. What advice do you have to help somebody make that mindset shift? I’m always a fan of look at the interest table, see what you would pay, what you would make, look at the numbers.

Adam Cmejla: You just hit on the most important part in that last sentence. You said, what I can make with that. I think you were talking about the instrument. If I spend the money on that instrument, what can I make on that, which is part of this conversation. In relation to the question that you asked, what we’re essentially asking ourself, the only way that it makes sense to do that is if there’s an opportunity cost lost by spending that money. Said differently, what used to happen, and this is where debt was, dare I say, advantageous, or maybe a better word to say was, it wasn’t as sinful as it is in today’s interest rate environment. If I can borrow money at three and a quarter, and I can go ahead and take the profitability, I can take, let’s say it’s $100,000 piece of equipment, and I can finance that at three and a quarter. That leaves me with $100,000 to go put as a down payment on a new building to expand my practice. I need that hundred thousand.

There’s a big opportunity cost if I part ways with that $100,000, and it’s only costing me three and a half percent. In today’s environment, if I have to, in lieu of me paying cash for that $100,000 piece of equipment, I have to finance it at 7%, what can I do with that $100,000 that can yield me more than my interest rate expense of 7%? The challenge is in today’s market, there’s just not a lot of options. Yes, we could take the hypothetical example of if you invest, looking at the S&P 500 as an example index representing the US stock market, and we look at the rolling 10-year period of the S&P 500 and calculate how many times has the S&P 500 been at or above 7%.

I’m sorry, human behavior is much stronger than any hypothetical paper chart I was going to put in front of you that, by the way, we need 10 years to measure whether it actually worked out or not without the word guarantee in front of it. That’s where you can use statistics and figures, dare I say, almost to a fault sometimes. Don’t underestimate, this is more to the listener, right? Don’t underestimate the power of human behavior and the story that you tell yourself and what your own money story is about how you view money growing up, because that’s a whole other conversation in and of itself. I took a little left turn there at the end there. We can maybe go down that path if we want, but don’t underestimate the emotion that you feel and the emotional attachment to that money.

Bethany Fishbein: I’m going to pull you back. When there are things that you want or need in the business and you have the cash and you get over the psychological hump of spending it, I’m going to do this. In our experience, there are some really smart purchases and some less smart purchases that you can make based on what the potential gain from those purchases will be. We’ve got cash. I’ve always wanted a cupcake of the month subscription. We’re going to use it for that. There’s not going to be a whole lot of return. Although you said earlier, and I agree that there’s so much value in return on life experience. If that subscription is going to bring a big smile to my face every day and I have that money, so be it. It’s not a bad deal.

Adam Cmejla: Exactly. Can’t take it with you and someday you run into some days.

Bethany Fishbein: Talk about the calculation of financial return on something that you’re spending money on in an optometric practice.

Adam Cmejla: I’ll answer this a little bit more strategically and qualitatively maybe than quantitatively because I think to do it quantitatively, we would need a specific example. We take what’s the latest thing right now. Everybody’s all about dry eye. Dry eye or myopia management. I think those are two hot button topics, if you will. Maybe hot button’s the wrong word, but additional services that you’re seeing practices roll out. We could take any example and quantitatively calculate what we would need the practice to do to generate X numbers of dollars in revenue, take the staff expense into consideration. Do we have the real estate? Do we have the footprint to be able to do that?

If we have to take something away, what is that going to cost us? If we’re out of lanes and we have to sacrifice, dare I say, one lane that is otherwise producing a comprehensive patient exam X numbers of times per hour so that we can do dry eye, is the juice worth the squeeze? That’s one of the ways in which I would think I said I wasn’t going to talk quantitatively and then I just did.

I think the qualitative way in which I was going to answer the question, back to what you had said, we see decisions that are made correctly and incorrectly as it pertains to spending money. I think if you were to ask those that made incorrect or ill-advised decisions, the purchase of the equipment was one of the first decisions that they made. Essentially, they jumped out of the plane with a parachute. I’m trying to think of a metaphor. There wasn’t a plan.

Bethany Fishbein: That’s such a good point. I didn’t know that’s where you’re going.

Adam Cmejla: I went to Vision Expo and I stopped. No offense to Vision Expo. I love speaking there and Vision Expo people, if you’re listening, please continue to have me back.

Bethany Fishbein: But there is a show special.

Adam Cmejla: Yes, there is a show special. And if you sign up right now, we’ll throw in X, Y, and Z benefits. So if the purchase of said PCV equipment is one of the first decisions in the process, dare I say, I think the odds might be stacked against you. The best way to make a decision like that or the best laid out plans is when the decision of how am I going to buy this piece of equipment is one of the last decisions that you’re making in the process. Would you agree?

Bethany Fishbein: 10,000%.

Adam Cmejla: Yay. I kind of figured you would.

Bethany Fishbein: It was my emphatic nodding over here that got you.

Adam Cmejla: You and I can see this. We should start a YouTube channel. Listeners can’t see your head nodding there. But I think that’s where, and again, I use that example of going to a show as being one of the many ways it can happen. It can happen there. It can happen because we saw something online, because we heard a podcast, or we saw a video on Instagram or something like that. The hardest part and one of the traits that is very common in business owners is the ability to make quick decisions. That is something that inevitably, we typically have that trait. We are able to look at a set of facts and make a decision. The challenge with that is if we don’t have structure around how we take a process and make a decision around it, we let the cart get ahead of the horse and we let outside influences steer us away from, again, I go back to that intentionality and the purpose behind how we’re running our practice.

What is this in service of? This is a great opportunity for me to insert three very successive questions that I have found to be very, very impactful in all aspects of my life, personally, professionally, and yes, common denominator financially. Those three successive questions are, what am I solving for, in service of what, and at the cost of what?

Before you buy something, as we’re talking about year-end allocation of capital and what we’re doing with it, if we just sit down and ask ourselves those three questions, what am I solving for? Well, I want to reduce my taxes. Okay, in service of what? I don’t want to pay the IRS. At the cost of what? Oh, geez, to save $32,000 in taxes, I got to spend $100,000?

Ask yourself those questions as you’re looking at the decisions that you’re making in your practice and just make sure that there’s a plan behind, right? The why needs to be greater than the what if and the why needs to be greater than the how of what you’re executing on. Does that make sense? Kind of took a couple different directions there at the end. Again, sorry.

Bethany Fishbein: It’s all good. I think even just the sentence that, how am I going to buy this, is really the last decision. And if you run this purchase through the barometer of, is that my first thought? It’s the optometric equivalent of buying the stuff in the supermarket checkout aisle. It really is. And we’ve seen so many practices that have gotten in trouble making that decision. And it’s hard because unlike the supermarket checkout aisle, there is somebody telling you how great this is, assuring you you won’t have to worry about it. Imagine if the M&Ms at checkout came with someone telling you you were skinny and they were only going to help you and buy them all.

Adam Cmejla: I’m grinning and I’m thinking over here because we need to come up with a phrase that sticks in optometry related to the supermarket. So on that same vein, what do you never do at the supermarket? Or what’s the cardinal sin, dare I say? You never go to the supermarket when you’re hungry.

Never go shopping when you’re hungry because everything looks so much more appetizing. So we got to think of what’s the spin on that that we can take to the optometric. Never go to a vision show. I’m not saying that we’re going to solve this, but I’m just trying to think.

Bethany Fishbein: It is. It’s never go to a vision show with a plan to spend to figure out there what you’re going to spend on.

Adam Cmejla: Yeah.

Bethany Fishbein: Because this takes it back to the whole conversation about accounting. If you’re going out wide eyed to a show or even online or a Facebook group with the intent to spend some amount of money, that’s the equivalent to going to the grocery store hungry because you will buy something.

Adam Cmejla: Leave your checkbook at home.

Bethany Fishbein: Without any forethought on how and what you’re going to do once it’s delivered. And I’m sure you’ve seen it in your clients as well. We’ve certainly seen it in ours and some people who come to us in trouble as a result that made that purchase first. Kind of thought, well, if I build it, they will come. Then found no one did for the first couple of months. And all of a sudden the loans are due and the payments start and it’s a panic.

Adam Cmejla: Yep.

Bethany Fishbein: Yeah. I think never go to the vision show hungry.

Adam Cmejla: Leave your credit card in the hotel room. They have those safes in the closet, right? Close it, put in your number, hit lock. That’s how those safes work. Put your credit card in that safe, lock it up, and then go down to the expo hall. You could even make a joke of it when you go there. Just pull out your pockets and say, no, I’m not BSing you rep from XYZ manufacture. I do not have my credit card with me. I’m sorry. I don’t trust myself with you. We want to still be friendly, right? We don’t want to burn any relationship bridges here. A little extreme, but in all honesty, there are probably people listening right now that would say, if they were truly honest with themselves, yeah, that’s probably me. I should probably do that because they may have made those decisions in the past. The first decision that they made was, how do I buy this without a business plan behind it?

Bethany Fishbein: Right. And the alternative to that, I think the financially healthier alternative is if you go out and you see those things and it piques your interest and that starts a thought process where you are answering those questions. Is there a problem here that I could solve with this? And the problem shouldn’t be, I have money to spend, so that’ll take care of it.

Adam Cmejla: Don’t buy a solution looking for a problem.

Bethany Fishbein: Is there a why? Is this something I want to do in my business? Is this going to make me happier? Is this going to help my patients? And then the research starts. There’s always another show special. There’s always another opportunity to buy the gently used demo model. These things come up. And so it’s great to see new technology. It’s great to speak to people and think about things that you can do.

And maybe those are things that you want to incorporate into your planning for the following year so that you’ve got a couple of months to set it up. So that then whatever you bought arrives, you’re able to utilize it to generate income right away.

Adam Cmejla: Yeah, like I said, don’t buy a solution creating a problem. And this could take us down the path of, I’ll speak for myself, when I go to my own professions, trade shows and professional gatherings, there’s an expo hall and it’s all the different pieces of fintech and technology to help us with our clients and etc, etc, etc. All due respect to reps, I appreciate the knowledge. Does it work? And the best way that I have found to figure out that question is, before we continue this conversation further, I’d like to talk to three or four of your past customers to get their experience as to how this has worked well. And if you feel confident enough in your product, I’d love to find someone that you know hasn’t had a good experience with it. I’d like to understand what didn’t work for them. Again, that’s a different conversation for a different time. But I’m very protective of capital, both time and money.

Bethany Fishbein: I always imagined financial planner conferences, the exhibit hall would just have like yachts and stuff, but it’s actually probably quite the opposite.

Adam Cmejla: That is a shot, Bethany. Wow. Yeah, advisor conferences are nothing more than ski chalets in Vail and Catalina wine mixer tickets and all the other luxuries. No, it is not. It is just a little bit different from that.

Bethany Fishbein: Adam, thank you so much for this valuable conversation. It’s a conversation that I hope will help people who are coming out of or headed into the conversation with the accountant, where the accountant says spend money and maybe gives them a little bit of pause.

So I appreciate you being here. I know for those who enjoy listening to you and want to hear more, they can find you on the 2020 Money Podcast. If you would share the website for your company.

Adam Cmejla: Yes. For more information on the 2020 Money Podcast or the upcoming launch of the 2020 Money Membership, which is going to be complimentary to the podcast, which we’re going to be launching in January of 2024, you can head to integratedpwm.com. integratedpwm.com. Everything about the show, our firm, the membership, all of that is going to be there on the website. Thank you for allowing me to share that, Bethany.

Bethany Fishbein: My absolute pleasure. Thank you for sharing your wisdom. I appreciate you and I’m looking forward to our next conversation. To anyone out there, if you’re not currently able to make these decisions with what to do with all the money you’ve amassed at the end of the year, and you would like at 2024 to have more financial freedom at the end of the year, more ownership over your time, more clarity around your business, you can reach us at powerpractice.com. Thank you so much.

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