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Private Practice Financial Tips for COVID-19 Pandemic Survival


By Robert Schultz, CEO, Vision One Credit Union 

Mark Wright, OD, ROB Professional Editor & CEO, Practice Management Center 

Sam Quintero, OD, Immediate Past Chair, Association of Practice Management Educators



March 19, 2020

The pandemic is here. It is impacting the practice now. These are the steps that you need to take today.



Begin by measuring your working capital. Working capital is the money the practice has on hand in its checking accounts and is easily accessible. The traditional minimum guidelines for working capital are 7.5-10 percent of the practice annual gross revenue collected. Cash in the bank totaling 10 percent of collected revenue would allow you to cover about two months of practice overhead.


Your next task is to calculate the impact the reduction of patient flow will have on collectible revenue. Keep in mind the revenue from third-party patients seen today will not be realized until 1-2 months from today. Therefore, whatever impact the pandemic has had on your practice to date is going to get worse over the next month.

Now that you have calculated how much money will possibly flow through the practice, it is time to calculate what expense reductions are necessary in order to keep the practice open and solvent.

In order to minimize the financial stress on the practice, identify the most critical functions of the practice related to the practice survival and the resumption of business operations. These would include business operations most sensitive to downtime, those that relate to maintaining cash flow, those play a key role in maintaining your business’ marketing share and reputation, as well as safeguarding any irreplaceable assets. Classify these critical functions as High (most severe), Medium, or Low (least severe). Create a plan from this to move forward.

Then determine how you can downsize your overhead expenses due to reduced patient and revenue flow. If done properly, you should be able to maintain a significant amount of practice cash flow and avoid going negative. Click on the link embedded in this article for an interactive spreadsheet. It will allow you to easily customize three views of your practice cash flow given (1) Normal practice revenue and operations; (2) Decreased revenue without overhead expense reductions; (3) Decreased revenue with an expense reduction plan. You can customize the revenue and expense decreases for your specific practice situation.

Next, negotiate with outside payees to reduce cash flowing out of the practice for at least the next 90 days. Ask your lenders to reduce or abate payments. Contact your lab vendors and ask to defer payments. Request that your landlord reduce or abate rent – you can ask the landlord to add and/or prorate the non-paid amount over the remaining term of lease.

Your plan should include these immediate steps. Those obligations bound by contract should be negotiated and changed by mutual consent.
1. Terminate or defer all equipment purchases.
2. Terminate or defer all practice purchases including buy-ins.
3. Terminate or defer all planned remodels, relocations, expansions unless partially performed.

Your plan may also include asking your banker for a loan or a line of credit, however, remember that any funds advanced will have to be repaid. Take the steps above before asking for a loan or a line of credit because the steps will help mitigate or perhaps even eliminate the need for a loan.


If you are caring for patients not in your office, then one additional step is to listen to the AOA webinar on Teleoptometry to learn how to appropriately code for those examinations.  Additional information for that can be found here.


The AOA webinar can also be accessed by clicking on this link





Some doctors have already had to close down their practice due to the pandemic. In this situation, you may consider taking the below listed actions immediately with the goals of (1) bringing costs and cash outflows to $0 and (2) helping your doctors and staff continue their cash inflow which will help maintain your team intact pending reopening the practice.


  1. Negotiate with all payees, lenders, utilities and landlords to defer payments for three months with a check-in at that point to determine next steps.
  2. Layoff staff immediately to allow them to obtain unemployment compensation (check with your practice HR attorney to make sure you follow the rules for your state). State programs are changing rapidly and hopefully will evolve into keeping staff in place with the support of unemployment compensation. How you characterize the layoff, furlough, termination of staff may affect benefits. Practice owners generally will qualify for unemployment benefits, however this varies from state to state. Check with your local optometric association, state unemployment agency, or HR attorney for insights into your states unemployment requirements and how it might benefit the practice and your staff.


Please see below to download an Excel spreadsheet to help you with your understanding of what to do. 


These are hard times. To get through them successfully we need to take action now and be proactive rather than waiting until other people are dictating what we have to do. 


CLICK HERE to download an interactive spreadsheet showing an example of the practice cash-flow impact with and without expense reduction.



Robert Schultz is the CEO of Vision One Credit Union

To contact:


Mark Wright, OD, is TOB professional editor and CEO of Practice Management Center 

To contact: 


Sam Quintero, OD, is Immediate Past Chair, Association of Practice Management Educators.

To contact: