visionomics®

Managing Profitability

Visionomics®, a series of 15 COPE- and ABO-approved business-building courses, will be held at this month's International Vision Expo West. The courses focus on strategies for assessing and maximizing practice profitability.

In this series, Eyecare Business—the official trade media partner for Visionomics at Vision Expo West—will feature some of the speakers on the track. This month, Trudi Charest, president of Total Focus Training & Consulting, shares highlights from “Managing Profitability.”

Your office can have lots of customers and patients, a large cash flow, a high per-customer average sale, and lots of repeat business. But, does that mean you are profitable? No, it does not.

In most cases, 20 to 30 percent of the business provides the most profit. But, because most practices don't have a budget, it becomes, “I hope we made money.” You process patients' clinical information with great detail, so why not adopt the same approach to the business of your office?

LABOR COSTS

Next to the cost of goods, salaries are the biggest cost to the company. However, people are also the company's biggest asset. Ask yourself these questions: Are you operating efficiently? Do you have staff on at the right times? Do you have the right staffing—not too top heavy (high experience) and not too bottom heavy (not enough experience)?

As business guru Tom Peters puts it, your ability to cut costs is limited, but your ability to increase revenues is unlimited. Almost any practice suffering a financial slowdown can trace it back to a revenue problem, not overhead.

10 STEPS

Here are 10 things you can do to increase your profitability.

■ BUDGET. Create a budget; review and monitor it vs. actuals monthly; and adhere to the budget.
■ INVENTORY. Plan and monitor inventory.
■ OVERHEAD. Monitor overhead expenses.
■ SYSTEMS. Develop service systems that help the practice generate additional revenue.
■ BILLING. Don't miss billing patients or third parties for services.
■ ACCOUNTABILITY. Get staff involved in increasing profits—pay for service—and hold them accountable.
■ REFERRALS. Improve the patient experience. Remember that happier patients = more revenue = more referrals.
■ EDUCATION. Develop new or better methods of educating patients on what you do.
■ SERVICES. Add new services that enhance the experience and allow you to charge additional revenue.
■ TRAIN! TRAIN! TRAIN!

That's especially important for reception and frontline employees. They make revenue.

Take action now. The longer you wait—tomorrow, next week, next year—the more potential profits you are losing. EB

VISIONOMICS®

For more info on Visionomics, go to: http://visionwest2011.conferencepath.com/program/?action=viewtrack&trackID=878