Some practices, especially those that have had about 5-10 years to establish themselves within their community, find themselves with an excess in cash reserves. If you're in this position, you could be considering a few investment options that are either within your practice or external methods to earn investment income.
Investing extra income obviously comes in handy to provide more short-term returns that you can put back into your practice by upgrading your software or medical devices. Especially during a recession or downturn in the economy, investing may be scary. However, if your practice is experiencing a steady flow of patients and income, a downturn could be the best opportunity to put cash back into the economy. Keep reading to see the different options in front of you.
Ways to Invest Money for Your Eyecare Practice
CD, Bonds, and the Money Market
Like we mentioned, buying a short-term (1-5 years) bond or certificate of deposit could be good if you're locked into a better interest rate than you would get in your practice's savings account. In order to give yourself a clear goal, you can decide what you'll be using the funds for before you put the money away. We also recommend communicating with your office manager and other non-competitive ODs to see if they recommend any specific money market materials that have worked well for their practice.
You might know that mortgage rates are at a record low, so investing in rental property or even buying your existing office space might be something beneficial for you in the long term. Of course, this can be a heavy decision for practices during times of uncertainty, but real estate is a solid and steady investment in many urban areas that are guaranteed to grow annually. Especially for commercial real estate, foreclosures can be an opportunity to own a space in a desirable area you wouldn't be able to afford otherwise. Check with a real estate agent, financial adviser, and conduct some online research on real estate profit margins in your city.
Devices & Software
If you are unhappy or slowed down by your existing tools, you can shop around for new ones that would improve your everyday workflow, patient care, and bring in more profits. Consult a few vendors to see if they can create a return-on-investment report for you before you make one yourself. Even if it's not something they do, it can't hurt to ask first. Usually certain tools like digital refraction devices and cloud-based EHRs are just necessary for when your practice is social-distancing from patients, you have associate ODs, or you have high turnover of staff. Take a look at what you need, the up-front cost for switching, and the increase of profit you could experience if you implement the change.