Optometric practices aren’t cheap. There’s space to rent, equipment to buy or lease, inventory to purchase and staff to hire. So, it makes sense to think twice before buying new equipment or hiring another employee. Yet, there are times when you need to buy that upgrade or hire that new employee. How can you tell when to write that check and when to hold off?
Is important to consider these things:
Equipment age
Some equipment, like phoropters and eye charts, you can keep for more than five years. Other equipment like an optical coherence tomography machine or your desktop computer, you will need to replace every five years or at least get upgrades. At least once a year, either you or your office manager should do an equipment check-up to see what needs to be replaced, what needs to be upgraded and what can stay for another year. Just because a new model for whatever is available doesn’t mean that you have to rush out and buy it.
Inventory Churn
The frames in your practice should be making you money. No two ways about it. Jay Binkowitz, president of GPN, an optometric consulting company said that when it comes to frames, it should be one in and one out. If a frame or frames are not selling over the course of a month, it needs to go. Of course, how can you make sure that you have the right mix of frames? There are lots of ways. Look in fashion magazines. Ask sales reps what’s hot, still it is important to take their advice with a grain of salt. After all the more frames they sell, the bigger their commission. Even better is to ask your optician and patients what they like. The optician sees what sells and what doesn’t and the patients want to buy frames that both fit and look good. So, information from both of them will help you to get the right frame mix for your practice.
Renting vs Buying Practice Space
With renting you have the flexibility to move up to a bigger space as the practice grows. With owning you can organize the space to your liking and if there is extra office space, you can rent that out and get some extra income. So, what’s better? Renting or owning? The answer is: It depends. Are you just starting out as a practice owner? Did you buy an established practice? What are the real estate costs in the area where you work? These are all questions you need to answer before signing a lease or mortgage.
While you can’t control all the costs associated with your practice, you anticipate most of them. By keeping an eye on your expenses, you can expand in a smart manner or you can decide to keep things the same for now.
Sources:
https://www.optometricmanagement.com/issues/2019/december-2019/get-your-diagnostic-ducks-in-a-row
https://www.optometricmanagement.com/issues/2011/march-2011/maximize-your-optical-s-profitability
https://thereceptionist.com/blog/4-signs-youre-ready-for-an-office-upgrade/