#1 Set Specific Financial Goals
Lewis Carroll, the author of Alice’s Adventures in Wonderland, is credited with the often-used quote “If you don’t know where you are going, any road will take you there.” Your financial plan is the priority for any good game plan going into the new year.
“Financial planning is a journey and just like any journey you need to know where you are, and where you want to go to develop the map to get there,” Rick Omohundro, president of Professional Vision Group, said.
“Having a good financial plan gives you the ability to lead your team and provides purpose as well as peace of mind,” he added.
Some of the key metrics needed to establish a plan:
- The number of exams you currently see in a typical working week
- The number of exam slots, or “potential exams” on the schedule in that period
- Receipts for that period to determine revenue per exam
- The number of weeks available to see exams (allow for holidays, vacation, CE, etc.)
The number of exams you typically see divided by the number of exam slots available gives you a “potential exam” rate or “schedule efficiency” ratio. For example, if you have 100 spaces available for exams (refractive visits only, not all patient encounters) and you use 80 for exams with 8 no-shows, then you have a PE rate of 80% or are scheduling at an 80% efficiency rate.
Revenue per patient or RPP is calculated by exams divided by receipts for that period. The more testing and OVs, higher product sales, etc. the higher the RPP because we are using exams as the numerator. RPP gives you a great benchmark on the overall efficiency of the office with collections, coding, sales, and medical management.
In our example, the practice deposits $32,000 a week with 80 exams for an RPP of $400. If patient volume grows by 10% then the same practice can expect $35,200 a week (88 x RPP of $400.) If sales and collections improve by 10% then that same practice can infer a weekly revenue of $38,720 (88 x RPP of $440.)
Multiply your weekly calculations by the number of weeks typically worked and you have an annual revenue projection.
Rick pointed out that revenues are only half the plan, expenses affect profit, and can be planned, or budgeted as well.
“Reviewing past expenses is the first step,” Rick said. “Find the averages for percentages of the cost of goods sold like contacts, frames, and spectacle lenses. Understand fixed expenses like occupancy and payroll,” Rick said.
Once you understand the past, consider each of the expense line items and how they may change in the future. Ask yourself questions like “To reach my personal income goals will more staff be needed? What would be the costs?” Be sure to account for rising costs such as utilities, insurance, pay rates, supplies, and more.
When you combine a reasonable revenue projection with a well-thought-out expense budget, you have a plan or “financial map” of the year’s journey.
#2 Implement Team Education
“Educated and certified paraoptometrics are a vital component of quality eye care. They provide valuable assistance to Doctors of Optometry in all modes of practice and enhance the patient’s care and experience,” according to Dr. Brad Lane, co-chair of the American Optometric Association Education Center. “This is especially true of those optometrists who practice to the fullest extent of their licensure and provide broad scope medical optometry.”
Dr. Lane pointed out that new advances in optometric care and modernization will rely heavily on the implementation of properly trained Paraoptometrics. As optometrists are tapped to provide a wider range of eye care procedures, delegating the appropriate tasks to a trained assistant will allow the optometric physician to focus on the technical skills needed to offer exceptional patient care. The future of private practice optometry hinges on the partnership of Optometrists and certified Paraoptometrics.
There are many resources available to Paraoptometrics through the American Optometric Association. Online learning is an easy way to introduce a new staff member to eye care and the concept of certification.
AOA.org provides numerous resources and includes the EyeLearn Professional Development Hub with recorded webinars and study sessions. There are hundreds of hours available to AOA members that cover a wide range of topics from infectious disease control to billing and coding. The AOA website also offers information about each of the levels of certification such as CPO, CPOA, CPOT, and CPO-C.
CE events like state and local society meetings, SECO International in early Spring, and the AOA Annual Congress in the summer, offer a variety of courses tailored to technicians. Live events give teams a chance to see innovations and products, interact with peers, and feel the vibe of the dynamic and growing eye care industry.
“There is no greater competitive advantage for a private practice than having a well-trained and motivated team,” according to Keith Lewis, a practice management expert at Professional Vision Group. “Education, cross-training, and product knowledge are the hallmarks of an excellent practice.”
#3 Update Fees
Costs are rising for lenses, frames, and contacts, not to mention shipping and handling. Vendors are struggling to keep up with added costs and you should, too.
While reimbursements from insurance and vision plans are shrinking, don’t be shy about raising wellness exams and other out-of-pocket fees for your services. Small incremental increases each year are much easier to implement than large “catch-up” increases occasionally.
Keep Usual & Customary fees at least 20% above insurance allowables to catch increases in reimbursements.
#4 Evaluate Merchandise
Buying trends change and your merchandise should reflect those changes. Your frame representatives are your best source of “What’s selling now?” The good ones will want your merchandise to move especially if you promise to reorder their hot sellers.
Your practice can easily evaluate sales of brands and styles by comparing the percentage of board space a line occupies to a percentage of its sales for a period. If you are using an inventory management system with your PM software, the information can be available with the click of a button. Other things to consider are how easy the vendor is to do business with, warranties and quality, costs involved like shipping and alliance discounts, and frequency styles are being changed out.
Your products should reflect your market, not the personal preferences of the people fitting and styling them. Patients often describe selection more as “variety” than “quantity.” Many chains use the old trick of having each style in each color and size to give the illusion of selection but at the end of the day people are looking for comfort, style, and “something different.”
#5 Improve Sales Ability
Rebecca Jones, Practice Management Expert at Professional Vision Group, has been an optical sales trainer for most of her long career. She recommends product knowledge training for everyone.
“Invest in product knowledge training for the whole team. From the front desk to Optical everyone should have at least a basic knowledge of what products and services are available to patients in the practice. They are the frontline faces of the practice, and a knowledgeable team will separate you from your competitors,” Jones said.
She also offered these fundamental values for the retail sales team:
- Never prejudge what you think the patient’s affordability is always show the best first.
- Use objections as an opportunity to educate patients about the benefits of products.
- Listen effectively to what the patient says or even more importantly what they aren’t saying. Have you oversold or confused the patient by giving too many options?
- Look for closing signals from the patient.
- Thank the patient at the time of the sale, do follow-up calls, and send a thank you card with several of your business cards enclosed.
- Use names and make sure they know your name. It builds trust.
#6 Beef Up Digital Marketing
“The key to an effective digital marketing presence for eye care services is to be available when the consumer is ready,” according to Andres Pietro, owner of Red Salsa Marketing in North Carolina. “If your content is vibrant and up to date, people will see you as engaged in the digital space. If you are trying to get phone calls, texts, or online appointment traffic, make it easy to do and follow up promptly. Websites and social media should be updated regularly and reflect the personality and strengths of your practice. Don’t be afraid to stand out.”
It is easy to ignore or take your web presence for granted. In fact, in a busy private practice, it is one of the first things to fall through the cracks.
“We offer our Get Discovered program as a way to provide a cost-effective, practical, and vibrant digital marketing program for private eye care practices,” according to Chris Morris, vice president of Professional Vision Group. “However, nothing replaces the local, personal touch of social media content. People love to see how the team and practice are doing on a human level. It reinforces the relationships that have made private practice bullet proof in any competitive market.”
Chris added that keeping the content genuine and not “salesy” or commercialized improves engagement, too.
#7 Plan Promotions
Establishing a promotional calendar for the year helps critical planning and project management aspects by giving everyone ample time to create and implement successful promotions. Planning ahead also prevents things from “sneaking up” and opportunities being missed. Generating artwork, using direct mail, and setting schedules all take time so start working well ahead of deadlines.
The Get Discovered digital marketing program by Professional Vision Group follows seasonal trends in its online content. Some of the important promotional seasons for a private eye care practice marketing plan include allergy season, sunwear and UV protection, back to school, and end-of-year health spending.
Don’t forget to promote milestones important to the practice like anniversaries, certifications, and implementation of innovations.
Being successful in private practice is well within reach of all practitioners.
By investing a little time and effort into good planning for the year, the practice can be well on its way to a great year regardless of the environment.
The team of Professional Vision Group, or “PVG,” is ready to share their years of experience in practice management and marketing with privately-owned and operated eye care practices. Established more than 30 years ago to offer advantages and resources for independent eye care practitioners, PVG has helped numerous professionals fulfill their dreams and reach their full potential.