Best Practices Entrepreneurship may not be a part of the curriculum at professional schools, but today, doctors, lawyers and other professionals are learning to think like entrepreneurs--and build better businesses in the process.
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Lawyers are famous for impenetrable jargon, but when Jeffrey Unger talks about how he practices law like an entrepreneur, his words are crystalline. "It means I am willing to make an investment of time and capital to grow this business like my clients do," says the 35-year-old Beverly Hills, California, attorney.
In any language, Unger's approach to running a law firm is decidedly entrepreneurial. While developing a specialty providing incorporation services to business owners, he's invested a six-figure sum creating technology to speed up and streamline the process using Web-based information-gathering tools. He has an annual marketing budget that he invests in advertising in trade publications serving accountants (a key referral source), circulating a free e-mail newsletter to 4,000 CPAs and others, and speaking throughout California to provide continuing education to accountants.
In six years, Unger has grown his firm to 10 employees and has a client base stretching from Chico, in Northern California, to San Diego in the south. He's also become a shining example of a professional services provider who runs his company like an entrepreneur. Attorneys, doctors, dentists, engineers and other professional service providers have reputations for being stodgy and unenterprising in the way they do business. But that's mainly a bad rap, according to Doug Hall, an Austin, Texas, business consultant who advises professionals on client retention. "A small law firm or engineering firm is run [in an entrepreneurial way] because there's no choice," says Hall.
Take Rebecca Jensen, 36, owner of The Accounting Source in Spokane, Washington. Jensen left an accounting job in Seattle to become an entrepreneur so she could spend more time with her children. With her husband, Todd, as the company's operations manager, she's crafted an innovative accounting enterprise that markets energetically, embraces new technology, and tirelessly develops new products and services for its markets. "The opportunity to practice my profession as an entrepreneur is extremely important to me," she says. Her secret? "You have to be able to put on different hats and be willing to learn and grow in different areas, as well as know when you need to outsource."
Make It Work
You can grow your professional practice like an entrepreneur if you come up with innovative solutions to your special problems. For example, professionals often find that their management skills are doubly stressed because few are trained to manage or communicate with nonprofessionals. "I don't know how to talk nondoctor," admits Dr. Adam D. Singer, co-founder, chair and CEO of IPC - The Hospitalist Company, a North Hollywood, California, company that supplies physicians trained to care for hospitalized patients. Singer's solution is to hire nonprofessional managers who have the skills he lacks. Says Singer, 44, "You really need two leaders."
Next, face and overcome the challenge of managing other professionals. "Managing other lawyers is like herding cats," Unger says. But he's got a solution: Corral the cats with technology that lets his firm grow without hiring additional professionals. Web-based collaboration allows him to use paralegals, who are less costly-and more easily managed-than the attorneys that a less automated firm would have to hire.
You can also help grow your firm by opening your mind to outside experts and ideas, says Jeffrey J. Denning, a consultant with Practice Performance Group, a La Jolla, California, firm that advises physicians on how to better manage their practices. "Reporting to a committee of doctors is not the way a professional manager wants to work," says Denning. "He wants to report to an enlightened entrepreneur who understands what he's doing."
Marketing Magic
Marketing may be your biggest challenge, but you can overcomebarriers of regulation, tradition and lack of training to marketyour services-if you're willing to work at it, becreative and sometimes take risks. Unger, for instance, copes withrules that prohibit him from soliciting paid referrals by activelydeveloping nonfinancial relationships with referral sources."It has to happen slower and through more nontraditionalchannels," he explains. But it happens.
You can make it happen faster if you do like other professionalswho have gone so far as to challenge legal restrictions.Accountants won the freedom to solicit new business a decade ago ina controversial U.S. Supreme Court ruling. Today, they are free toengage in sophisticated marketing efforts, like the Jensens',incorporating direct mail, telemarketing and cold-calling.
Todd Jensen, 37, who oversees The Accounting Source'smarketing efforts, developed his approach with the help of aconsultant who specializes in teaching accountants how to markettheir services. With a team of telemarketers calling to setappointments to meet with local businesspeople, Todd was soon doingfive sales calls a day. "I did that for six months," hesays. "And the [number] of clients coming in was more than wecould handle. My wife said to slow down."
Don Uhl,a Williamstown, New Jersey, consultant who trains accountants to beentrepreneurial, says most professionals find that a relativelymodest amount of marketing expertise and energy goes a long way."That's the beauty of it," he says. "So few aremarketing and being entrepreneurial that those who do are extremelysuccessful." He advises professionals to start by settingaside a percentage of their budgets for marketing. Uhl'straining emphasizes a marketing mix that includes direct mail,telemarketing and in-person sales.
Entrepreneurial professionals are usually distinguished byeagerness to apply and even invent new technologies to improvetheir businesses. Singer's organization has deployed afuturistic communications network that allows doctors usinghandheld computers to instantly check up on any of thousands ofpatients in a hospital. And Unger's Web-based businessincorporation tools are providing him with the geographic reach andefficiency to greatly expand the market for his legal services.
The Jensens' accounting office has gone paperless, with allclient records and forms scanned into a digital image storage andretrieval system that reduces costs while improving service. SaysTodd, "When the client calls up and asks [me] to pull out thetax return from 2000, instead of going to a storage room andpulling out boxes, usually I have it faxed to him by the time I getoff the phone."
Financial Finagling
There is good news about financing professional growth: Mostprofessional practices have little difficulty obtaining financingfrom traditional sources such as banks. And with ingenuity, you canovercome the obstacles, such as ownership rules that restrict whocan control equity in a professional practice.
Let's return to Rebecca Jensen. Although her practice ismanaged almost like a partnership with her nonaccountant husband,Rebecca lists herself as sole owner of The Accounting Sourcebecause of laws and regulations that require accounting firms to beowned by CPAs. Similar restrictions affect other professionalsdepending on the field and the jurisdiction, and similar methodscan be used to deal with the restrictions.
Want to get a big edge over your professional competition?Change the way you make use of the capital you are able to raise.Professionals are generally more focused on doing things the waythey were taught to do them than on spending to create newproducts, services and ways of doing business, says Unger. Byspending six figures developing his Web-based incorporationservice, he says, he's able to charge about half what a largecorporate law firm would for an incorporation, while providingsimilar quality.
Vascular surgeons Alfred Laborde and David Mozersky helpedcontribute to the trend with Veintec, a franchise for treatingvaricose veins that the two San Antonio, Texas, physicians started13 years ago. Of the 80 letters they sent to Texas vascularsurgeons in their first marketing efforts, Laborde and Mozerskysigned up five franchisees-a phenomenal success rate. Clinicsare now established in most major cities in Texas, as well as inOklahoma City and Santiago, Chile.
Laborde says their success is a result of vascular surgeons'interest in the medical and business techniques they had createdfor treating varicose veins and running a clinic dedicated to thecommon medical procedure. But today, the enterprise is running intoproblems, says Laborde, 47. Doctors who set up their practices withthe help of Veintec training are complaining about paying royaltiesto the franchisor after several years of running the franchises ontheir own. So Veintec is looking to add new services forfranchisees, such as a cooperative buying arrangement, and isplanning to change the percentage royalty into a flat fee.
Meanwhile, the founders believe the market opportunity for aprofessional health-care practice run like an entrepreneurialfranchise is significant. "The secret of our success,"says Laborde, "is that we found a niche."
Get "Pro" Active
If you're starting to run your practice like an entrepreneur, it's not a moment too soon. "The attorneys picked it up quickly," says Mark Curtis, president of Curtis Marketing Group, a St. Joseph, Minnesota, marketing and advertising company that specializes in advising dentists and other professional service providers. "Dentists have been slower to get it, but another group that took to it quite well was plastic surgeons. And the accountants are starting to get it."
At the moment, you can learn a lot by looking at the professionals who are already acting like entrepreneurs. Unger is constantly developing new technology-based products that will reduce his costs and expand his market. The latest is an online service that reminds companies of the legal requirement to keep minutes of board meetings and eases the task with prepared forms-all for a fraction of the cost of hiring a law firm to record the meeting minutes. For Unger, it's all part of being an attorney-albeit one with an unusually entrepreneurial bent. "A typical lawyer might make an investment in furniture and maybe [produce] a brochure," he says. "I am making an effort to grow my firm in a way that's unique."
If you try this route, be prepared to change what you do and the way you do it. When advising clients, Glovsky often enters areas, such as strategy and efficiency, that few attorneys consider their turf. You'll have to be sensitive to entrepreneurs' needs, particularly the need to efficiently manage their scarcest resource: their time. Glovsky does this by sending checklists of information before sitting down to discuss incorporating a new business with an entrepreneur.
But the major change you'll need to make-and get the opportunity to observe with your entrepreneurial clients-is to take on a more growth-oriented, aggressive attitude. "It comes down to having the entrepreneurial mind-set," says Glovsky. "Clients need people who see the world as they do, who are results-oriented, think independently, can be creative, and [see] the bigger picture."
