Imagine you're 63 years old. You were ready to hang it up several years ago, but the one company you sunk a big portion of your retirement funds into didn't work out so well. Of course, the divorce didn't help. Neither did the fact that your three daughters were smart enough for 6 years at Harvard – each.

You entered your 60s with little more than the value of your modest home, your 8-year-old Buick and a meager stock portfolio. It wouldn't be so bad if you loved your work. But the fact is, you like it less every day. And the mild hand tremor you've experienced lately means that surgery, the thing you enjoy most about your professional life, will end one day soon. You're thinking your last words on this earth may be "Which is better, one or two?"

Just as glaucoma patients know they should take their medicine, most eye surgeons understand that their business and financial plans for their practices should be in sync with their personal financial goals. Unfortunately, neither patients nor surgeons are 100% compliant. It sometimes takes the threat of a crisis, like the one we described on the previous page, to improve compliance.

Here, we'll describe practice and personal financial planning activities and discuss the importance of integrating the two. We'll also offer three Ophthalmology Management readers the opportunity to receive a combined personal and practice financial consultation -- free. See "Courtesy Personal and Practice Financial Consultation" for details on how to apply for this service.

Practice financial planning focuses on the critical steps needed to achieve a practice's business plan. Therefore, before you can develop a financial plan for your practice, you must have a strategic business plan that addresses such areas as:

• business (practice) development
• operations
• marketing
• finance
• human resources.

Once your strategic business plan is in place, a practice financial planner can assist you in developing a comprehensive financial plan.

Practice financial planning addresses such areas as:

• cash flow management
• corporate taxes
• capital asset financing
• asset management
• corporate contingency planning (malpractice coverage, business interruption analysis and corporate disability planning).

(For more on creating a practice financial plan, see "Evaluation and Management Tools" )

A properly executed practice financial plan will help you achieve your ultimate business goals and maximize wealth for the owners of your practice. More specifically, it will provide you with a financial road map to get you from where you are now to where you want to be.

Personal financial planning focuses on the mission-critical steps needed to accomplish personal financial goals, such as achieving and maintaining financial independence -- or, in other words, getting rich and staying there!

A comprehensive personal financial plan addresses:

• cash flow management
• income tax planning
• asset planning
• investment management
• retirement planning
• contingency planning (education funding, disability income planning, survivorship needs analysis and estate planning).

In essence, your practice's financial plan should bring to life your practice's fundamental business plan. Likewise, your personal financial plan should reflect the culmination of your life's financial goals. Both are like sheet music to an orchestra.

Unless your personal financial plan is in sync with your practice plan, disappointment is certainly going to occur.

Integrating the activities between your practice and personal financial planners will let them help you focus on key components of your practice and personal financial success. It will also give them ample opportunity to heed any warning signs and develop alternative courses of action.

If your spending is out of control, for example, they might say, "We've got to get your consumption under control. Otherwise, you'll be in danger of bankrupting your practice and forgoing your retirement."

At the very least, you must have interaction between your practice and personal financial plans to accomplish your personal financial goals.

For example, if you're 50 and you want to retire by the age of 60, the utility of your personal financial plan will be diminished (even with the best execution) if your practice is in a spiraled decline.

Alternatively, it won't matter what total profit margin you achieve in your practice if you perpetually strip out all of the cash (and then some) for living expenses.

In a group practice, you have one business plan, but multiple, potentially conflicting personal financial plans. Some of the very reasons that doctors get together in the first place --subspecialization, better patient care, sharing of costs, greater market share and greater individual income – can contribute to conflict within the group.

To eliminate potential conflict, we spend a lot of time flushing out the individual goals and objectives within the group. This also helps us formalize the goals and objectives of the practice. The true picture always lies beyond the numbers and is influenced by stage of life, stage in the business lifecycle, family issues and partner dynamics within a group practice.

Although we've engaged in conflict resolution on occasion and feel very comfortable doing so, we view our role as helping to align the practice's and the doctors' financial plans – one individual at a time.

In the opening paragraph, you read what can happen when you don't make a connection between your personal and practice financial affairs. When you unify your personal and practice financial plans, you can look forward to a retirement more like this:

If you wait until you're almost ready to retire to integrate your practice and personal finances, you very well could be saying "Which is better, one or two?" until your dying day. If you start integrating the two now, however, your future could be very rewarding indeed.

With the revolutionary changes occurring in health care today, we've witnessed a surge of interest in integrating practice and personal financial planning. And so, after many years of serving a few of the same clients separately, we've inaugurated a new joint service between our two firms to provide surgeons with a combined personal and practice financial evaluation in a single, integrated report.

To launch this service, we will provide three Ophthalmology Management readers with a free, limited practice and personal financial consultation in exchange for letting their statistics be published anonymously in three separate articles of Ophthalmology Management. The articles will demonstrate how a surgeon's personal and practice financial objectives can be accomplished with a single, unified plan.

To be considered for a courtesy consultation, e-mail a brief description of your current practice and personal financial situation to John Pinto at pintoinc@aol.com or Richard Alphonso at: alphonso@finadvisor.com. All information will remain strictly confidential. Doctors selected for the courtesy consultation will be notified by June 1.

The Secret to Achieving Your Practice's Financial Goals

The top three factors tied to improving a practice's financial health are:

• Establishing clear financial goals.
• Motivating yourself and your employees to commit to your practice's financial goals.
• Staying apprised of industry changes and development.

A number of evaluation and management tools are needed to achieve an integrated financial plan. They include:

Richard J. Alphonso, JD, CPA/PFS, M.S.T. is president of The Financial Advisory Group, Inc., a fee-only investment management and financial planning services firm located in Houston, Texas. He can be contacted at (713) 627-7660 or alphonso@finadvisors.com.

John Pinto is president of J. Pinto & Associates, Inc., an ophthalmic practice management consulting firm in San Diego, Calif. John is the country's most-published author on ophthalmology management topics. Recent books include "John Pinto's Little Green Book of Ophthalmology" and "Turnaround: 21 Weeks to Practice Survival and Permanent Improvement." He can be contacted at 800-886-1235 or pintoinc@aol.com.