By Dr. William and Juli Albright, Guest Writers[EDITOR'S NOTE: This is another in a series of posts and a podcast interview following the Albright's setting up and running of their new practice, Alamo Plastic Surgery.]
We have been open for almost five years! Some sources state that approximately 45% of businesses fail within the first five years, so we at Alamo Plastic Surgery feel very fortunate to be thriving. Looking back, the first year was, by far, the most difficult due to COVID, personal financial limitations, and the need to set up every little thing (who knew setting up a fax could be so difficult?). After the initial setup, we continue to optimize and improve our processes. At this point, incremental improvement is the name of the game. Besides a few notable hiccups discussed below, the time has flown by, and we continue to enjoy serving the San Antonio and Austin areas.
To read the full series, start with these:
7 Steps for a Successful Medical Practice Start-Up
COVID-19 Takeaways from a New Medical Practice
First-Year Review of a Medical Practice Start-Up
Starting a Medical Practice Podcast Interview
Who Are We?
Both of us grew up in Texas, and we met at the University of Texas in 2003. Will attended medical school at the University of Texas Medical Branch followed by an integrated plastic surgery residency at Penn State University. After graduation from residency, Will accepted a position as a clinical professor at the University of Iowa for three years. Then in 2019, he returned to his hometown of San Antonio to open his solo practice, Alamo Plastic Surgery.
Juli graduated from the University of Texas with a chemical engineering degree and embarked on a career at ExxonMobil. After 10 years of working and two children, she “retired” to be a stay-at-home mom until Will “recruited” her to help with the practice.
Our daily responsibilities encompass both the personal and professional. As parents of four children (all under 9 years old), we have our hands full most nights and weekends. In our spare time, we both enjoy exercise, reading, and traveling.
Business Updates
- 100% Cosmetic Surgery: When we started the practice, we planned to be 50% cosmetic and 50% insurance/reconstructive. After receiving private insurance contracts at or below Medicare reimbursement rates, we quickly realized that accepting insurance was not a viable short- or long-term strategy. Furthermore, insurance companies were unwilling to negotiate with a solo practitioner in our specialty and locality (results may vary).
- Refining Our Niche: After two years, Will decided to limit his practice to only breast and body cosmetic surgery, foregoing facial surgery and most injectables. By further specializing, he believed he could improve patient outcomes and differentiate himself from his competitors. Counterintuitively, this did not seem to affect the number of patient inquiries since most patients already saw this as our strength anyway.
- Concretizing Our Schedule: Currently, Mondays and Thursdays are surgery days, Tuesdays and Fridays are clinic days, and most Wednesdays are administrative days. There are exceptions.
- Call Coverage: As a solo practitioner, Will is always “on call” for his patients. It took us three years to cultivate relationships with other plastic surgeons with whom Will felt comfortable entrusting the care of his patients. This wonderful development has allowed us to finally travel out of state!
More information here:
Buying into (or Selling Part of) a Business
Major Encumbrances
COVID
Read about it here. We were fortunate that in San Antonio the actual moratorium on elective surgeries was only about two months. This was then followed by an unexpected two-year post-COVID cosmetic surgery boom (~20%-30% increase in cosmetic surgery, according to some industry sources). This surge helped us build an excellent reputation and become financially more productive. Since 2023, this boom has been correcting, and numbers seem to be going back to pre-COVID trends.
Hospital Shenanigans
In July 2021, one of our main surgical facilities, after undergoing major hospital administrative turnover, notified Will that all of his scheduled cases were canceled, and he could only book cases 24 hours in advance. Yikes. We had to scramble to find another facility, which was difficult since most hospitals/facilities do not prioritize cash pay patients. Luckily, we quickly found an excellent facility closer to our home and office. Facility cosmetic prices, however, have at least doubled since 2019. Also yikes. For the most part, patients seem to expect some inflation, but it has made it more difficult for us to compete on pricing with local plastic surgery clinics with in-office surgical suites.
Anesthesia Coverage Shenanigans
Just before Thanksgiving in 2021, the anesthesia scheduler called to tell us that none of our scheduled surgeries were guaranteed to have coverage, and we would only be notified at 4pm the day before if they would be covered. Yikes for a third time. The largest anesthesia group in town had recently been sold to a private equity group, and it was in the process of imploding. Although it was a difficult period, the silver lining was that we developed a comprehensive list of anesthesiologists and found our main anesthesiologist. Very recently, however, our excellent anesthesiologist informed us that he is moving out of state in a couple of months (for very understandable family reasons). More developments to come . . .
Negative Reviews
On Google Business, we have received over 200 reviews with an overall 4.9 star rating. Overwhelmingly, our patients have very nice things to say about our service and results. A negative review, however, can be very disheartening, and, according to one consultant, it can have a major negative financial impact on your practice (estimated at $10,000 or more for plastic surgery practices). For us, these negative reviews are almost exclusively from people calling to request consultations for surgery when they are not good cosmetic surgery candidates. Even though they are not established patients of the practice and we contest these reviews, Google is reluctant to remove them. We try to take each case as a learning opportunity to improve our process. Additionally, focusing on acquiring more positive reviews to dilute the negative review is an effective strategy.
Marketing
Neither one of us has a background in marketing, and it continues to be a challenge, especially in the cosmetic realm and the ever-shifting social media landscape. So far, we have used a DIY method with mixed results. This year, we plan to hire someone with a strong marketing background to help. These are some of the things we have tried:
Search Engine Optimization (SEO)
Google is, by far, our top referral source, with about 70% of our leads coming in organically (not paid advertising). We have written many blog articles, have worked with a few hourly SEO experts (ranging from $15-$100 per hour), and have optimized the website to rank more highly on Google. It took us about two years to start appearing on Page 1 organically for folks searching for plastic surgery in San Antonio. But Google is always changing and we must remain vigilant, as we discovered last year.
Google Ads
This is the only way prospective patients found us for the first six months to one year in practice. However, we found that the Google Ad leads were not high quality. We’ve not used Google Ads in the last few years, but we may reconsider if we can fine-tune and target our audience better.
Instagram/Facebook Ads
Initially, our marketing target for social media was to grow followers, which seemed to be the right strategy. More recently, however, Instagram/Facebook have become more stringent with blocking our breast and body before and after posts. As a result, we’ve seen nearly zero growth on these platforms over the last six months. Currently, we view these platforms as another social signal for potential patients. For instance, a person will find us on Google and then check our work and legitimacy on IG/FB.
Local “Best of” Awards
In 2020, before these local contests were even on our radar, the practice was voted Best Cosmetic Surgery in San Antonio by one of the larger local magazines. This definitely helped our marketing and recognition locally. Since then, we have been nominated or won several of these types of local voting contests. The first one was, by far, the most significant, and now it is part of the routine marketing schedule.
Local Magazine Articles
Initially, we did a front-page advertisement in the local neighborhood magazine. This seemed to help with brand recognition, but in general, these types of articles do not seem to have a high ROI, especially given our target demographic.
Conversation Scripts
We have written communication scripts that our staff will use or reference when engaging with new potential patients. It covers several common scenarios, and it was designed to improve workflow and to limit the risk of engendering a negative online review. We are continually improving and adding to these scripts. Even though it is painful work, we strongly encourage you to consider creating these.
Provide a Great Product or Service
Years ago, a successful non-medical business owner advised us that the most critical factor for our success would be to have a great product or service. Period. He advised us to focus on this first, and the rest would follow. I believe this to be true.
More information here:
Are You Making This Costly Marketing Mistake in Your Medical Practice?
Finances
In our initial business plan, we only planned for the first three years and did not account for the COVID slump or the post-COVID cosmetic surgery boom. By the end of our business plan, the profit from the business was approximately double our modest projections. These are some of the key differences between our startup plan and the actuals below. Since our WCI podcast episode aired in 2021, we have shared our initial business plan draft with hundreds of physicians who reached out to us. We hope this has been helpful for their decision-making and has provided them with a blueprint for success. We would again encourage anyone who might find this helpful to reach out via our website alamoplasticsurgery.com.
- Revenue was double what was expected.
- Rent was double what was expected.
- Malpractice insurance was a third of what was estimated (initially based on Pennsylvania malpractice rates rather than Texas).
- Advertising and marketing costs were double what was predicted (and could have been much higher).
- Labor has been lower than expected. We had anticipated three full-time employees, but we are well served with one full-time and two part-time employees (all of whom earn above market hourly rates).
- Once profitable, we started spending more on office supplies, training, and business meals than in the original plan (approximately double).
From a financial and personal perspective, we are very pleased to have started the practice. If we did a hypothetical comparison between the practice and if Will had remained employed, the practice is financially ahead, especially when also considering the amount of time off and the control of scheduling that we now enjoy. We live comfortably but not extravagantly, so extra funds are dedicated to retirement, child education funds, personal investments, or investing in the practice. Given the inherent vulnerability of cosmetic surgery to macroeconomic changes, our investment approach is also designed to help the business better weather market fluctuations and provide more peace of mind.
More information here:
Should You Lease or Own the Real Estate for Your Medical Practice?
More Tips and Tricks
Hiring Employees
For each role, we recommend detailing the attributes needed for success in that role as best as you can. Then, use this list to create an avatar for the potential employee you are looking to hire and how they would fit in the office team and culture. As you review resumes and interview applicants, it becomes much easier to narrow down the pool of candidates by comparing them to your avatar. This has helped us immensely.
Health Insurance
We have not found a great answer here. Currently, we do not offer health insurance to our employees (two are part-time, and one is covered under a spouse’s plan). After experimenting with several insurance plans, we personally elected to enroll in a Christian Sharing Program. It has worked well for us, a relatively healthy family of six. We pay for most out-of-pocket expenses, which are less than health insurance premiums. Additionally, any “needs” over a certain dollar amount are shared with the community and reimbursed. We tested this system with the birth of our last child, and everything went smoothly. However, we recognize that this is not the best approach for everyone, and we recommend caution when considering your choices.
Retirement Savings
We first started with the Vanguard Simple IRA. When we had more funds, we moved to the Guideline 401(k), where we used the profit-sharing option as well as the 401(k) option. Both have worked well and have been very easy to set up. Based on past White Coat Investor articles, we also established a cash benefit plan.
Time Off
This is a major perk of owning your own business. Once the business was sufficiently profitable to us (to each their own), we tried to adjust the schedule to allow more “time off” with the family. We are effectively a four-day work week with one administrative day. Neither one of us really anticipated having this flexibility, but we are incredibly grateful to have the opportunity to spend time with our young children.
Enjoy the Journey
The last five years have flown by. Although there have been ups and downs, we have really enjoyed the journey so far. It is great to be in control of your practice, to set your own goals, and to manage them how you see fit.
What other questions do you have about starting and then running your own practice? What tips do you have that we (or anybody) could use?
My wife and I had a solo private practice for over 20 years. We closed about 3 months before Covid. Other than that and the specialty, this article is almost exactly our experience. The only bad Google review we had was from someone we refused to accept as a patient because we didn’t do what they were wanting from a doctor. It wasn’t as easy as working for the big groups but was rewarding and ultimately worth doing. It was my dream to have a small manageable practice since watching Marcus Welby MD as a child. I wasn’t the kind of person of person to follow corporate edicts.
Congratulations on your successful practice! That is good to hear our experience is on track.
Congrats on reaching the 5 year mark and your success so far! It’s clear to me from this article that you run your practice conscientously and effectively!
Thanks Tom! We are trying and always looking to improve.
I’ll just say what everyone is thinking. The whole reason anyone clicked on this article was to see some real financial numbers and you just provided words and fluff. Waste of time article.
I wasn’t thinkin that at all. I was thinking that this article gave great insight into starting a medical practice and how to run one effectively. I’m not sure what article you read.
Well, the article I read gave zero financial information. Isn’t this a financial blog? Isn’t that the point of the white coat investor? Maybe it used to be, I guess not anymore.
The stat on the externality of a negative review I found really interesting. As well as how difficult it is to get that removed.
You needed to read an article to know that?
They quantified the magnitude of the impact. I would not intuitively have known that.
Good feedback John. In a future article we will try to share more financial numbers in the article. The Google Drive definitely has detailed financials.
My biggest takeaway from this article and the reason it belongs here…
CASH PRACTICE
Everybody likes specifics and we do run anonymous posts from time to time, but it’s pretty easy to understand why someone would be hesitant to provide them. Ever posted your budget publicly with your name attached to it? It’s a pretty enlightening experience. We felt there was a lot of value in the post and sorry you didn’t find it very useful.
Thank you for the 5 year update! I have been in private aesthetic plastic surgery practice for almost two years. Before opening my practice I had a long-negotiated employment contract fall through on the day it was to be signed and found myself faced with a decision to make. Instead of seeking out another employed position, I chose to open my own private practice right out of the gate of training. I read Will and Juli’s original post and did reach out to them for guidance. They were exceptionally gracious, helpful and transparent. They spoke with me over the phone and sent me their business plan including estimated finacials. They offered to speak with me again if ever I needed further guidance. Their template is exactly what I used for my business plan. While my ‘numbers’ were off in many ways, this offered me a great starting point. Many of their points above have been my experience as well thus far. I highly recommend reaching out to those that have tread the waters before you if looking to open a practice and not really knowing where to start.
Tori – Congrats on starting your own practice! It is so great to hear an update. We hope you are doing well.
I always thought plastic surgery was among the most lucrative of specialties. Amazing that you decide to pass on conventional health insurance as seems worthwhile to cover the risk of low probability / high cost conditions like cancer at a young age.
Great comment – I am still learning more about this. We did try conventional health insurance as well but it seemed very expensive to get basic coverage. This could be an location specific issue. With the sharing plan, my understanding is these low probability / high cost conditions are covered. Only routine expenses are not covered.
So you opened a cash only elective cosmetic surgery practice and don’t offer insurance to your employees. ::: eye roll :::
otherwise, nice outline of your experience. Not sure Dr JD will let my comment through, Ha!
If anything, their practice and business are consistent. I’m not sure why you think this merits an eye roll as there is literally *one* full time employee who gets paid above standard wages per the article. As my momma used to say, hope your eyes don’t get stuck that way.