Just in case you missed this article from the
August 2008 issue of 20/20, here it is.
No matter how good your service is, no matter
how fantastic your product, the look of your
practice is a very vital part of how you are
perceived by your patients. While 20/20 would
never downplay the importance of providing
excellent healthcare and great customer service,
part of that service is having a dispensary that
reflects an image of high-quality and trust.
How you display products is many times just
as significant as the products themselves.
Read more:
http://www.2020mag.com/ViewContent/tabid/136/content_id/9599/Default.aspx
Showing posts with label Growth and Profit Tips. Show all posts
Showing posts with label Growth and Profit Tips. Show all posts
March 17, 2009
1st Quarter News
Well, the first quarter of 2009 is nearly over
and I'm hearing good news from our clients.
January and February were tough months for
a few people, but lots of practices are doing
just fine.
One New York client's office was torn up with
major expansion and remodeling during those
months. They managed to work through it all
without closing for even one day.
His numbers were slightly ahead of last year
despite the construction. I can't wait to hear
how the practice does after a couple of full
months in the totally renovated facility.
Photos coming soon.
Another client in Louisiana was named
"2008 Business of the Year" by the Chamber
of Commerce. This new building is a modern
interpretation of the genteel Acadian style
unique to the region. Photos coming soon.
I have decided that we are not participating
in any economic downturn, slowdown or
recession. I hope you have decided the
same thing for your practice.
and I'm hearing good news from our clients.
January and February were tough months for
a few people, but lots of practices are doing
just fine.
One New York client's office was torn up with
major expansion and remodeling during those
months. They managed to work through it all
without closing for even one day.
His numbers were slightly ahead of last year
despite the construction. I can't wait to hear
how the practice does after a couple of full
months in the totally renovated facility.
Photos coming soon.
Another client in Louisiana was named
"2008 Business of the Year" by the Chamber
of Commerce. This new building is a modern
interpretation of the genteel Acadian style
unique to the region. Photos coming soon.
I have decided that we are not participating
in any economic downturn, slowdown or
recession. I hope you have decided the
same thing for your practice.
December 9, 2008
How To Succeed in 2009
The practices that succeed in 2009 will be the ones that are the best in their categories. That means they will be the best in selling, best in patient care and customer service, best in positioning themselves, best in describing themselves and best in creating a following. These excellent practices will take tons of market share away from "lesser" practices, potentially putting them out of business altogether.
This is so for two reasons. First, in a contracting economy, there is less business to go around so "survival of the fittest" applies. Second, savvy marketers know that this is not the time to cut the marketing budget or hold off on improving the look and feel of the physical facility. If anything you need to spend more on marketing in difficult times and go on with remodeling or moving to create a better atmosphere, attract new patients and boost your average sale.
Our current clients are doing things like:
1. Taking over the space next door, doubling the size of their optical and getting their displays built for 25% less than they would have paid a year ago. (The fixture manufacturers are hungry and willing to work for less.)
2. Buying new office condominiums at bargain prices with generous build-out allowances
3. Starting a brand new practice in a middle to upper income area with low rent, $30,000 build-out allowance and free rent for the first 4 months.
4. Buying an empty foreclosed medical building at a great price, using 60% of the existing improvements for their practice and spending less on construction.
All these folks are stepping up their game while most others are running scared. They are getting good value for their construction dollars. Within the next six months they will have stunning new offices that will attract new patients and tease more high end sales out of existing patients. Their competitors with old tired offices will go on grumbling about how bad things are and lose business to those with newer and better offices.
By the time these new offices open their doors, it's likely that the economy will be improving and these practices will get carried upwards on the rising tide. Consumers will want to make sure they are getting great value for their money as they cautiously open the pursestrings. Why should they go to a ho-hum office when there's a newer "wow-you" office in the area? Why should they settle for the same old experience in a so-so place when they can have a great experience in a really special place?
When it comes to my own business I am optimistic, courageous and action-oriented. I believe that when you strive to be the best and do not listen to the nay-sayers you always win in the long run. When the herd zigs, I zag. It's no surprise that our clients have the same attitude.
I love working with positive confident people helping them realize their vision of being the most successful practice in town. Next year there will be some practices who don't survive while those who differentiate themselves with true excellence will thrive. Which will you be?
This is so for two reasons. First, in a contracting economy, there is less business to go around so "survival of the fittest" applies. Second, savvy marketers know that this is not the time to cut the marketing budget or hold off on improving the look and feel of the physical facility. If anything you need to spend more on marketing in difficult times and go on with remodeling or moving to create a better atmosphere, attract new patients and boost your average sale.
Our current clients are doing things like:
1. Taking over the space next door, doubling the size of their optical and getting their displays built for 25% less than they would have paid a year ago. (The fixture manufacturers are hungry and willing to work for less.)
2. Buying new office condominiums at bargain prices with generous build-out allowances
3. Starting a brand new practice in a middle to upper income area with low rent, $30,000 build-out allowance and free rent for the first 4 months.
4. Buying an empty foreclosed medical building at a great price, using 60% of the existing improvements for their practice and spending less on construction.
All these folks are stepping up their game while most others are running scared. They are getting good value for their construction dollars. Within the next six months they will have stunning new offices that will attract new patients and tease more high end sales out of existing patients. Their competitors with old tired offices will go on grumbling about how bad things are and lose business to those with newer and better offices.
By the time these new offices open their doors, it's likely that the economy will be improving and these practices will get carried upwards on the rising tide. Consumers will want to make sure they are getting great value for their money as they cautiously open the pursestrings. Why should they go to a ho-hum office when there's a newer "wow-you" office in the area? Why should they settle for the same old experience in a so-so place when they can have a great experience in a really special place?
When it comes to my own business I am optimistic, courageous and action-oriented. I believe that when you strive to be the best and do not listen to the nay-sayers you always win in the long run. When the herd zigs, I zag. It's no surprise that our clients have the same attitude.
I love working with positive confident people helping them realize their vision of being the most successful practice in town. Next year there will be some practices who don't survive while those who differentiate themselves with true excellence will thrive. Which will you be?
OFFICE DESIGN TRENDS 2009
Totally Digital Office
New offices will have computerized diagnostic equipment and office management software all linked together to provide quick access to information from just about anywhere in the office. In the optical every styling table will have it's own computer. Multiple data collection rooms and multiple check out stations are a must to prevent bottlenecks and keep patient flow running smoothly even in a small office.
Design for Patient Experience
In economically difficult times the best way to make your practice stand out from the competition is to provide a great experience for the patient. The newest and most successful retail store designs take all of the senses into account. Hearing, smell, taste and touch are incorporated into the visual environment to create a sense of comfort. Optical offices can use a similar strategy to create a unique and memorable experience for the patient that makes them tell their friends about you and keep coming back.
Sustainability
The volume of sustainable materials for office interiors continues to expand, making it easier to find paint, furniture, fabrics and finishes free of unhealthy chemicals. Many commercial carpets now contain yarns made from recycled fibers. Being green is becoming mainstream.
Energy-conscious Lighting
LED (light-emitting diode) lighting technology improves by leaps and bounds. Prices have come down some but initial costs are still higher than for conventional fluorescent or halogen fixtures. However, LED's prove their worth over time with long lamp life and 60% or better reductions in electrical bills. Getting good color rendition for retail applications is still an issue. Most LED's are too cool (color temperature 5500K) or too warm (2700K). Some are available now in a 4200K lamp that gives a good balanced white.
Nature-inspired Colors and Patterns
The greening of America extends to colors inspired by natural materials. Greens are great for health care environments because of their calming quality. Dark brown and walnut wood tones are increasingly popular and work well with greens or blues. Spice tones provide warm but toned down accent colors like curry or nutmeg.
Gray is returning after a long run of tan and beige tone nuetrals. The newest grays are warm (pink undertone) rather than cool (blue undertone) and look great paired with walnut wood.
Dark walnut and medium cherry wood tones are paired with a touch of lime green for a warm invitation to the latest Morgenthal-Fredericks Opticians in Manhattan's Plaza Hotel upscale retail mall.
The two-toned wood floor in the Peter Lik Gallery (in the same mall) is so incredible it nearly upstages the amazing art photos. It certainly got my attention. I don't think I'd put a floor quite this bold in an optical because it would take attention away from the frames that should be the stars of the show. But it works for this gallery.
New offices will have computerized diagnostic equipment and office management software all linked together to provide quick access to information from just about anywhere in the office. In the optical every styling table will have it's own computer. Multiple data collection rooms and multiple check out stations are a must to prevent bottlenecks and keep patient flow running smoothly even in a small office.
Design for Patient Experience
In economically difficult times the best way to make your practice stand out from the competition is to provide a great experience for the patient. The newest and most successful retail store designs take all of the senses into account. Hearing, smell, taste and touch are incorporated into the visual environment to create a sense of comfort. Optical offices can use a similar strategy to create a unique and memorable experience for the patient that makes them tell their friends about you and keep coming back.
Sustainability
The volume of sustainable materials for office interiors continues to expand, making it easier to find paint, furniture, fabrics and finishes free of unhealthy chemicals. Many commercial carpets now contain yarns made from recycled fibers. Being green is becoming mainstream.
Energy-conscious Lighting
LED (light-emitting diode) lighting technology improves by leaps and bounds. Prices have come down some but initial costs are still higher than for conventional fluorescent or halogen fixtures. However, LED's prove their worth over time with long lamp life and 60% or better reductions in electrical bills. Getting good color rendition for retail applications is still an issue. Most LED's are too cool (color temperature 5500K) or too warm (2700K). Some are available now in a 4200K lamp that gives a good balanced white.
Nature-inspired Colors and Patterns
The greening of America extends to colors inspired by natural materials. Greens are great for health care environments because of their calming quality. Dark brown and walnut wood tones are increasingly popular and work well with greens or blues. Spice tones provide warm but toned down accent colors like curry or nutmeg.
Gray is returning after a long run of tan and beige tone nuetrals. The newest grays are warm (pink undertone) rather than cool (blue undertone) and look great paired with walnut wood.
Dark walnut and medium cherry wood tones are paired with a touch of lime green for a warm invitation to the latest Morgenthal-Fredericks Opticians in Manhattan's Plaza Hotel upscale retail mall.
The two-toned wood floor in the Peter Lik Gallery (in the same mall) is so incredible it nearly upstages the amazing art photos. It certainly got my attention. I don't think I'd put a floor quite this bold in an optical because it would take attention away from the frames that should be the stars of the show. But it works for this gallery.
September 4, 2008
Preventing Frame Theft
In a retail setting like a mall or even a strip shopping center theft is a problem that goes with the territory. These days even practices in a more professional medical setting can experience theft of frames (politely referred to by accountants as "shrinkage") The busier you get, the easier it is for dishonest people to get away with it.
One of my clients has his higher-end vendors help soften the blow from "lost" frames by getting the sales reps to give him a couple of no-charge personal frames every month or two. He says that he doesn't want to lock up his entire high-end inventory because he sells more if some frames are out and available for try-ons. That makes them more vulnerable to loss, but as long as the vendors help him out with personals he figures they both end up selling more frames in the long run.
So what can you do about it? Here are some suggestions.
• Sensormatic (or similar) inventory control system - has tags placed on each frame and an alarm that sounds if someone tries to walk out with a frame that hasn't been paid for. It entails having sensor stands on both sides of the door. The stands may not be all that attractive, but they send a message that you are not easy pickin's.
• Locking display cases and locking frame bars - It's not practical to lock everything up, but you should at least lock up your more expensive frames and sunglasses. It actually adds to their perceived value when they are presented behind locked glass doors.
• Surveillance cameras - some people put in fake ones that move as if they are panning around so people feel that they are being watched. Real surveillance cameras with a monitor in the lab are good for seeing if someone is in the optical, but a thief can too easily slip out the door with merchandise before you can stop them.
• Staff training - make them more vigilant with security training and a strict policy of always having an optician in the retail area whenever a patient is. Reward them with a bonus tied to decreases in the shrinkage rate.
One of my clients has his higher-end vendors help soften the blow from "lost" frames by getting the sales reps to give him a couple of no-charge personal frames every month or two. He says that he doesn't want to lock up his entire high-end inventory because he sells more if some frames are out and available for try-ons. That makes them more vulnerable to loss, but as long as the vendors help him out with personals he figures they both end up selling more frames in the long run.
So what can you do about it? Here are some suggestions.
• Sensormatic (or similar) inventory control system - has tags placed on each frame and an alarm that sounds if someone tries to walk out with a frame that hasn't been paid for. It entails having sensor stands on both sides of the door. The stands may not be all that attractive, but they send a message that you are not easy pickin's.
• Locking display cases and locking frame bars - It's not practical to lock everything up, but you should at least lock up your more expensive frames and sunglasses. It actually adds to their perceived value when they are presented behind locked glass doors.
• Surveillance cameras - some people put in fake ones that move as if they are panning around so people feel that they are being watched. Real surveillance cameras with a monitor in the lab are good for seeing if someone is in the optical, but a thief can too easily slip out the door with merchandise before you can stop them.
• Staff training - make them more vigilant with security training and a strict policy of always having an optician in the retail area whenever a patient is. Reward them with a bonus tied to decreases in the shrinkage rate.
February 4, 2008
New book coming soon! Subscriber only discount!
My new book, Optometric Office Design Process and Pitfalls, will save you thousands of dollars and help you avoid the exasperating problems and runaway costs that other practitioners experience when they build a new office.
We’re in the final stages of setting up the web page for the book and it will be available as an instant downloadable e-book on or before February 15. We’ll be offering a subscriber-only discount for a limited time, so watch your in-box for the announcement.
You also get a valuable F*R*E*E* bonus – Barbara’s Best 25 Floor Plans – with the book if you order by the deadline.
February 27, 2007
Websites Need Remodeling Too!
How's your website? Have you added more content, made any improvements lately? It's easy to hire a company to set up a nice looking website. Sometimes the website is part of a package that you get when you buy practice software or marketing services.
Most people are relieved when the website finally goes live. Then they get so busy with other things that new content is added on a very sporadic basis. The site may not have anything new for months at a time. Sound familiar? I'm guilty of this too.
The problem is that unless someone is assigned the task of sending update material to the web master on a regular schedule, it simply won't get done. One of the obstacles to website updating is that you have to get the web master to do it. Then you have to check whether what he or she did is working properly and get them to fix what is wrong.
This has been a big frustration for me and I decided that I was NOT going to be at the mercy of some web master's work load any more. After months of research I found a web site design program that we can handle in-house. (We're using Freeway Pro, which is only for Macs.)
Many of the internet marketing guru's recommend "throwing a bomb" into your website every couple of years and doing a complete re-design. So that's what we did. To save time, I hired a web master who knows the program in and out to do the initial design and set up.
Now my assistant and I are in the final stages of adding new material and fine-tuning everything ourselves. Our brand new totally re-designed website will be up by the end of March (maybe sooner!). We've given our business a fresh new look with a new logo and color scheme carried through in printed materials (business card, letterhead, etc.) and on the internet.
Sometimes you need to "throw a bomb" into your old image and start fresh again. When you remodel or move to a new location, think about the image you present in your printed materials and on your website. Your identity sticks in the mind of your patients only if it's consistent across the board.
I'm so happy to be in total control of my website at last. Now if I want to add a new photo or case study my assistant can do it and I'm right there to edit it as I see fit. And new content can go live the same day! No more waiting for the web master to do it! Your website may be larger and more complex than mine, but that doesn't mean you can't have better control over updating it.
If your website was built with DreamWeaver (one of the most popular web design programs) you can use a program called Contribute that allows you to make changes and updates only to certain portions of the site. Your web master can set it up so it's impossible for you to mess up the code on the essential elements.
The web is an important marketing tool that no practice can afford to ignore. When you have an easy way to do changes, you'll stand a much better chance of keeping your web site up to date.
Most people are relieved when the website finally goes live. Then they get so busy with other things that new content is added on a very sporadic basis. The site may not have anything new for months at a time. Sound familiar? I'm guilty of this too.
The problem is that unless someone is assigned the task of sending update material to the web master on a regular schedule, it simply won't get done. One of the obstacles to website updating is that you have to get the web master to do it. Then you have to check whether what he or she did is working properly and get them to fix what is wrong.
This has been a big frustration for me and I decided that I was NOT going to be at the mercy of some web master's work load any more. After months of research I found a web site design program that we can handle in-house. (We're using Freeway Pro, which is only for Macs.)
Many of the internet marketing guru's recommend "throwing a bomb" into your website every couple of years and doing a complete re-design. So that's what we did. To save time, I hired a web master who knows the program in and out to do the initial design and set up.
Now my assistant and I are in the final stages of adding new material and fine-tuning everything ourselves. Our brand new totally re-designed website will be up by the end of March (maybe sooner!). We've given our business a fresh new look with a new logo and color scheme carried through in printed materials (business card, letterhead, etc.) and on the internet.
Sometimes you need to "throw a bomb" into your old image and start fresh again. When you remodel or move to a new location, think about the image you present in your printed materials and on your website. Your identity sticks in the mind of your patients only if it's consistent across the board.
I'm so happy to be in total control of my website at last. Now if I want to add a new photo or case study my assistant can do it and I'm right there to edit it as I see fit. And new content can go live the same day! No more waiting for the web master to do it! Your website may be larger and more complex than mine, but that doesn't mean you can't have better control over updating it.
If your website was built with DreamWeaver (one of the most popular web design programs) you can use a program called Contribute that allows you to make changes and updates only to certain portions of the site. Your web master can set it up so it's impossible for you to mess up the code on the essential elements.
The web is an important marketing tool that no practice can afford to ignore. When you have an easy way to do changes, you'll stand a much better chance of keeping your web site up to date.
February 2, 2007
The New Demographics: You Are Where You Live
People sometimes wonder how I can successfully design offices all over the country without setting foot out of my hometown Portland, Oregon. Now I'm revealing to you one of my "secret weapons" that I use to help me understand who your patients are. Knowing their lifestyle preferences, income, age levels and such enables me to design just the right style and color scheme that appeals to them.
My secret weapon is a website called "My Best Segments" featuring free demographic information from Claritas, a world leader in demographics and customer segment profiling. They have taken a mountain of data on consumers, filtered it into cohesive lifestyle groups and given them each a clever title like Money and Brains, Bohemian Mix, Kids & Cul-de-sacs, etc.
At the website you enter the zip code of the area you want to know about and up pops the top five groups living in that zip code. You can click on each group name to find out information like income, number of kids, favorite restaurants and TV shows, types of sports they like, even the make and model of car they are likely to drive!
Demographic characteristics such as education, housing and race/ethnicity are also available. So it's easy for me to get a good picture of the folks who are my client's typical patients and then tailor the office to fit their tastes and lifestyles. It's fun to put in your own zip code and see which group you fit into.
Think of MyBestSegments as a "photo album" of consumer markets. Each of the Claritas market segments has its own pages that display "snapshots" of the segment's demographic traits, lifestyle preferences and consumer behaviors.
Did I mention that all this great information is FREE? Try it for yourself:
http://www.claritas.com
January 6, 2007
It's 2007 – Do You Know Where Your Numbers Are?
You should be getting your year-end figures from your accountant soon. Are you one of those people blessed with a knack for numbers who is eagerly anticipating gains over last year? Or are you one of those too busy running the business to bother with numbers?
The fact is that you can't improve what you don't measure. Now you're probably wondering, why is this designer going on about numbers? Isn't my accountant or bookkeeper supposed to keep track of that stuff?
Your bookkeeper can keep your checking account straight. Your accountant can do your taxes. But until you start tracking and comparing how your business is performing from one year to the next, you're like a ship's captain without a compass.
If you keep on sailing in the same general direction you’ll probably hit some land sooner or later. But it won't be the destination you hoped for. If you want your practice to sail into the port called success, you have to start by finding out your current position. Then you'll be able to set specific goals and figure out strategies and tactics to reach those goals.
When I talk to practitioners who want to move to a new office or build a new building, one of the first things I ask for are a few basic financial statistics on their practice. Then I can talk with them about how the right design for the new office can result in big gains in those numbers. We can't set measurable objectives for the new facility without having current numbers to start from.
Many times the gains turn out to be higher than they first dared hope for. I like to know the numbers so I can keep score on how well my designs perform for my clients. (By the way, I know the numbers on my own business and I use them to improve our performance year by year. I practice what I preach.)
Office design is first and foremost about higher performance and productivity, which as a bonus comes wrapped in an attractive package. When you have "before and after" numbers for comparison, you can figure out the exact return you are getting on the investment you made in the new office. If you have a nice-looking new office, but aren't seeing significant gains in your numbers, you have made a bad investment.
What are these magical numbers that you should know about your practice? Here are the very basic statistics that will tell you if you're going in the direction of your dreams or foundering in the doldrums.
1. Gross revenues
This is the easiest. Most people have at least a rough idea of how much money came in the door last year or last month. But it's much better to have an exact number to work from.
2. Growth rate
Compare this year's gross revenue with last year's. Did you take in 10% more (average), 20% more (better than most), 30% more (on the fast track!)? If your growth rate is less than 10% you are in the danger zone and you'd better do something about it pronto, like hire the best practice consultant you can find!
3. Average number of exams performed per month
Your office management or accounting software should be able to pull up this number for you without much fuss. If it doesn’t, have your accountant or bookkeeper figure out a way to get this number and report it to you monthly.
4. Average revenue per exam per month and per year
This is a simple calculation that even the most number-resistant business owner can and should look at every month. Just divide your monthly income by the number of exams performed that month.
At the end of the year average out all twelve months to see your average revenue per exam for that year. Here's where the story gets more interesting. Small improvements in either or both of these numbers can translate into a great deal more income over time.
Is your practice maxed out on productivity? If you are booked out two weeks or more and office bottlenecks prevent seeing more patients, then it's time to start planning a move up to a bigger offic
e! A business that’s not growing is in danger of slipping backwards.
Is your dispensary set up right so the frames practically sell themselves? Or are your opticians handicapped by poor lighting and outdated displays? Improving the dispensary should always result in higher average revenues per exam, putting more money in your pocket whether or not the number of patients seen increases.
However, a dispensary upgrade should also result in more word of mouth referrals and more new patients. When you invest in a new dispensary, reserve some money for advertising and promotion of your new and improved look.
One of the most powerful words in advertising is the word “new,” so take advantage of having something new to promote! With a one-two punch of new dispensary plus promotion, your average revenue per exam can easily shoot up 20% or more.
5. Profit
When all expenses are subtracted from all income, this is the "bottom line" that the business gurus always talk about. If some of your other numbers show gains, but there is little or no gain in profit, then you need to do some serious pruning on those expenses. Or maybe take a look at whether you're spending so much on new equipment that it's eating up all your profits. Equipment junkies will hate to face that one!
There are many more sophisticated comparative statistics that a business consultant can help you glean from your accounting records. Then a good consultant will teach you how to use them to improve your practice and your profits. At the very least you must have a handle on the basic five above if your ambition is to join the ranks of the top practices in your area.
The fact is that you can't improve what you don't measure. Now you're probably wondering, why is this designer going on about numbers? Isn't my accountant or bookkeeper supposed to keep track of that stuff?
Your bookkeeper can keep your checking account straight. Your accountant can do your taxes. But until you start tracking and comparing how your business is performing from one year to the next, you're like a ship's captain without a compass.
If you keep on sailing in the same general direction you’ll probably hit some land sooner or later. But it won't be the destination you hoped for. If you want your practice to sail into the port called success, you have to start by finding out your current position. Then you'll be able to set specific goals and figure out strategies and tactics to reach those goals.
When I talk to practitioners who want to move to a new office or build a new building, one of the first things I ask for are a few basic financial statistics on their practice. Then I can talk with them about how the right design for the new office can result in big gains in those numbers. We can't set measurable objectives for the new facility without having current numbers to start from.
Many times the gains turn out to be higher than they first dared hope for. I like to know the numbers so I can keep score on how well my designs perform for my clients. (By the way, I know the numbers on my own business and I use them to improve our performance year by year. I practice what I preach.)
Office design is first and foremost about higher performance and productivity, which as a bonus comes wrapped in an attractive package. When you have "before and after" numbers for comparison, you can figure out the exact return you are getting on the investment you made in the new office. If you have a nice-looking new office, but aren't seeing significant gains in your numbers, you have made a bad investment.
What are these magical numbers that you should know about your practice? Here are the very basic statistics that will tell you if you're going in the direction of your dreams or foundering in the doldrums.
1. Gross revenues
This is the easiest. Most people have at least a rough idea of how much money came in the door last year or last month. But it's much better to have an exact number to work from.
2. Growth rate
Compare this year's gross revenue with last year's. Did you take in 10% more (average), 20% more (better than most), 30% more (on the fast track!)? If your growth rate is less than 10% you are in the danger zone and you'd better do something about it pronto, like hire the best practice consultant you can find!
3. Average number of exams performed per month
Your office management or accounting software should be able to pull up this number for you without much fuss. If it doesn’t, have your accountant or bookkeeper figure out a way to get this number and report it to you monthly.
4. Average revenue per exam per month and per year
This is a simple calculation that even the most number-resistant business owner can and should look at every month. Just divide your monthly income by the number of exams performed that month.
At the end of the year average out all twelve months to see your average revenue per exam for that year. Here's where the story gets more interesting. Small improvements in either or both of these numbers can translate into a great deal more income over time.
Is your practice maxed out on productivity? If you are booked out two weeks or more and office bottlenecks prevent seeing more patients, then it's time to start planning a move up to a bigger offic
e! A business that’s not growing is in danger of slipping backwards.Is your dispensary set up right so the frames practically sell themselves? Or are your opticians handicapped by poor lighting and outdated displays? Improving the dispensary should always result in higher average revenues per exam, putting more money in your pocket whether or not the number of patients seen increases.
However, a dispensary upgrade should also result in more word of mouth referrals and more new patients. When you invest in a new dispensary, reserve some money for advertising and promotion of your new and improved look.
One of the most powerful words in advertising is the word “new,” so take advantage of having something new to promote! With a one-two punch of new dispensary plus promotion, your average revenue per exam can easily shoot up 20% or more.
5. Profit
When all expenses are subtracted from all income, this is the "bottom line" that the business gurus always talk about. If some of your other numbers show gains, but there is little or no gain in profit, then you need to do some serious pruning on those expenses. Or maybe take a look at whether you're spending so much on new equipment that it's eating up all your profits. Equipment junkies will hate to face that one!
There are many more sophisticated comparative statistics that a business consultant can help you glean from your accounting records. Then a good consultant will teach you how to use them to improve your practice and your profits. At the very least you must have a handle on the basic five above if your ambition is to join the ranks of the top practices in your area.
January 2, 2007
Mystery of the Missing Profits
A while back I spoke to a client whose office I designed some months ago. When he told me that he hadn't met all of the financial objectives we set at the beginning of the design process, I was surprised and puzzled. The average revenue per exam had only increased 11%.
This troubled me greatly as I am used to glowing reports from clients that their average revenue jumped up 25%, 35%, sometimes more. I racked my brain thinking back over the dispensary design and couldn't find a reason why people weren't spending more. He was offering a bigger selection in a beautiful new dispensary with state of the art lighting. Something was not right.
I decided to call and talk to the head optician to see if there was something I could suggest that would boost the dispensary sales to the level where I knew they should be. Just a few minutes into the conversation, he gave me the key to solving the problem.
Turns out the doc wouldn't let him order the more expensive designer lines and in-demand brands! The doctor was afraid no one would buy them. He had a great new dispensary with a special area designed to sell high-end frames, but no high-end frames to sell!
It took another call and some convincing from me to get the doctor to remove the price-point handcuffs he had put on his optician. I had to remind him that optical retailing is the ONLY retail industry that has incredibly liberal return policies. If it doesn't sell, the sales rep will take it back. His risk was very low, and the upside potential very high.
With a little more coaxing he agreed to try just two or three high-end lines. "Work with the sales reps," I said. "They know what's selling in this area and will get you started with a good selection of their most popular styles." I promised to call back in two months and see what progress they had made.
When I called my client back I could tell from the happy tone of his voice that there was a big smile on his face. They had experienced the thrill of their first $1,000. sale and the higher ticket frames were practically flying out the door. What really shocked the doctor was that some of the patients he had pre-judged as tightwads actually wanted those high fashion frames and spent more with no arm-twisting.
Sure the moderate priced frames still make up the majority of the sales. But between the new higher income patients that he was now attracting and the existing patients who stepped up their style, his average revenue per exam had leapt up from $265 to $393. That's a 67% increase...and $25,600. more revenue in one month if you figure an average rate of 200 exams per month. He’s probably doing many more exams by now.
With this kind of result the entire cost of the new office would be recouped in less than a year. I suggested that he send a postcard to all the people he had examined in the new office before the new merchandise arrived. Offer them a little discount and invite them back to see the new styles.
I don't know if he followed up on it, but I bet that if he did, he is probably buying tickets for that Hawaiian golf tour vacation he's always dreamed of.
This troubled me greatly as I am used to glowing reports from clients that their average revenue jumped up 25%, 35%, sometimes more. I racked my brain thinking back over the dispensary design and couldn't find a reason why people weren't spending more. He was offering a bigger selection in a beautiful new dispensary with state of the art lighting. Something was not right.
I decided to call and talk to the head optician to see if there was something I could suggest that would boost the dispensary sales to the level where I knew they should be. Just a few minutes into the conversation, he gave me the key to solving the problem.
Turns out the doc wouldn't let him order the more expensive designer lines and in-demand brands! The doctor was afraid no one would buy them. He had a great new dispensary with a special area designed to sell high-end frames, but no high-end frames to sell!
It took another call and some convincing from me to get the doctor to remove the price-point handcuffs he had put on his optician. I had to remind him that optical retailing is the ONLY retail industry that has incredibly liberal return policies. If it doesn't sell, the sales rep will take it back. His risk was very low, and the upside potential very high.
With a little more coaxing he agreed to try just two or three high-end lines. "Work with the sales reps," I said. "They know what's selling in this area and will get you started with a good selection of their most popular styles." I promised to call back in two months and see what progress they had made.
When I called my client back I could tell from the happy tone of his voice that there was a big smile on his face. They had experienced the thrill of their first $1,000. sale and the higher ticket frames were practically flying out the door. What really shocked the doctor was that some of the patients he had pre-judged as tightwads actually wanted those high fashion frames and spent more with no arm-twisting.
Sure the moderate priced frames still make up the majority of the sales. But between the new higher income patients that he was now attracting and the existing patients who stepped up their style, his average revenue per exam had leapt up from $265 to $393. That's a 67% increase...and $25,600. more revenue in one month if you figure an average rate of 200 exams per month. He’s probably doing many more exams by now.
With this kind of result the entire cost of the new office would be recouped in less than a year. I suggested that he send a postcard to all the people he had examined in the new office before the new merchandise arrived. Offer them a little discount and invite them back to see the new styles.
I don't know if he followed up on it, but I bet that if he did, he is probably buying tickets for that Hawaiian golf tour vacation he's always dreamed of.
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