How to Increase Profitability in Your Optometry Practice: Advice from ODs on Finance Community Members
Running a successful optometry practice demands a delicate balance between providing top-quality patient care and maintaining a healthy bottom line. If you find yourself struggling to pay yourself or barely keeping your head above water, don't worry. In this post, we'll share valuable advice from experienced professionals on how to increase profitability in your optometry practice.
See more patients or decrease costs
To improve profitability, you must first decide whether you should increase patient volume or decrease costs. While seeing more patients can bring in more revenue, it may also require more work and potentially compromise the quality of care. On the other hand, decreasing costs involves a thorough examination of your Cost Of Goods Sold (COGS) and payroll to identify areas where you can reduce expenses without affecting quality.
Analyze your COGS
To decrease costs, analyze your COGS to identify areas of inefficiency. Examine how money is spent and when it is spent. Once you understand your expenses, you can begin to implement cost-saving measures. Joining optometry-focused groups can offer valuable insights and resources. Prioritize the top 3-4 areas for improvement and start working on them immediately.
Focus on the optical
Since the optical department is often the most profitable, it's crucial to concentrate your efforts here. As the practice owner, be actively involved in selecting and pricing frames. Emphasize high-margin products and services, and train your staff to sell them effectively. Consider creating an upscale, menu-style booklet showcasing your optical selections, making it easier for staff to sell premium frames.
Re-evaluate fees
Regularly reassess your fees to ensure you're charging appropriately for your products and services. Evaluate your pricing structure annually and consider raising fees or finding ways to increase revenue per patient, such as selling additional eyewear or offering specialty services.
Consider billing medical when appropriate and manage A/R
To maximize revenue, it's crucial to bill medical insurance when appropriate and diligently manage your accounts receivable. Regularly review your accounts receivable balances, ensuring that there are no outstanding amounts 60-90 days past due. If any past-due balances arise, act quickly to resolve them and avoid timely filing issues with insurance companies. By staying on top of your billing and diligently following up on denied claims, you'll ensure you're properly compensated for your work and maintain a healthy cash flow for your practice.
Educate your staff on the medical benefits of premium eyewear
A knowledgeable and well-trained staff is essential to the success of your optometry practice. Equip your staff with information on the medical benefits of premium eyewear, such as better lens coatings, advanced lens materials, or cutting-edge frame technology that can enhance comfort, durability, and vision correction. Encourage your staff to communicate these benefits to patients, helping them understand the value of investing in premium eyewear for their long-term eye health.
Provide training on selling premium (high-margin) products and services, emphasizing the importance of addressing each patient's unique needs and preferences. By offering incentives or bonuses, you can motivate staff members to effectively promote premium eyewear, ultimately contributing to the practice's overall profitability. By focusing on the medical benefits and quality of premium eyewear, your staff will not only boost sales but also help patients make informed decisions for their eye care.
Embrace outsourcing strategically
Outsourcing certain tasks can free up your time and allow you to focus on what you do best—caring for your patients. Evaluate which tasks can be delegated to professionals with specialized expertise, such as payroll, bookkeeping, or marketing. By outsourcing these tasks, you can tap into their knowledge and skillset, potentially resulting in higher efficiency and cost savings in the long run. Remember, strategic outsourcing can help you streamline your operations and maintain a competitive edge, enabling you to make more informed financial decisions for your practice's growth.
Find a niche
Establish a niche service that is self-pay. Specializing in a particular area can differentiate your practice from competitors and generate additional revenue. Invest in marketing and promoting your niche service to attract more patients.
Increasing profitability in your optometry practice requires a combination of exceptional clinical skills and astute business acumen. By analyzing your COGS, focusing on the optical department, re-evaluating fees, billing medical when appropriate, training your staff, outsourcing when appropriate, and establishing a niche, you can enhance your practice's profitability and reach new heights. Remember, profitability is not just about increasing revenue but also about decreasing costs and making informed decisions that benefit both your practice and your patients.
