I am asked weekly about the topic of optometry practice NET. As CEOs of our optometric practices we evaluate the nuts and bolts of our budgets to determine how we can grow the piece of the pie that we take home. Now granted, if you are a longterm reader of this blog you know that the money is a by product of relationships and integrity. Whether your motivation for a highly successful business is solely the monetary rewards or the benefits of residual income, there is an innate part of all of us to rise to the top. Part of rising to the top of a highly successful optometry practice is retaining a high percentage of gross collected monies.
Efficient frame board management is key to controlling your business. I have found that frame inventory can take on the characteristics of an undesired virus. The number of frames in your office continues to grow. This uncontrolled growth is where many offices get caught holding frames that ultimately cost the practice money. Here are some simple guidelines to follow in managing your dispensary.
- Be involved – Too many eye doctors who are also the business owners, spend 99% of their time in the exam room, this lends itself to inefficiencies outside of the exam room. Doctor, go sit in your dispensary throughout the week and just listen and observe. Utilize a calendar for the whole office that allows you to see when vendors are coming in and drop into the buyer/vendor meeting.
- Set boundaries – As a parent of a 2 year old, I find that boundaries are meant to be set and tested over and over until a child realizes that you have set that boundary for a purpose and you expect it to be respected. Your dispensary staff is the same way, they need boundaries and direction. Ask other eye doctors what boundaries they use to get compliance and a highly productive dispensary.
- Be familiar with vendor guidelines – As the CEO and owner of the company, you are ultimately responsible for any “agreements” that are signed by yourself or your staff. Many frame lines have “agreements” that when you carry their product you agree to potentially pay restocking fees, or accept returns reimbursed less than you paid. Be familiar with these guidelines so you don’t get stuck with a $90 frame that no longer has value for a return.
- Keep overstock to a minimum – At our office we have set a boundary that we will not carry more than 10% of overstock, so if we have 20 Calvin Klein frames then we will only have 2 overstock frames. With our reorder system this works very good for managing inventory and it keeps us from excessive inventory and related expenses.
As the CEO, you must understand how the business of optical frames operates. If you do not understand this or you give your staff freedom without boundaries, then you will most likely fall into the averages with a practice NET of 33%. With a little bit of time and effort a CEO can influence the dispensary to reap a more rewarding bottom line with a practice NET easily greater than 38%.
Great blog Dr. Fleming – please feel comfortable sharing your posts with our large audience of ODs on “ODs on facebook” I think it would add great value to the group and would increase your exposure in the audience it looks like you hope to be exposed to. Best,
Alan Glazier, OD, FAAO
http://www.facebook.com/groups/122070001227892/
Thank you for your interest! I will check out “ODs on facebook” I assume you are the admin of the group, therefore, I would welcome you to link the RSS feed into the group so all future posts, 1 per week, would automatically go into “ODs on facebook.” Have a good one! – Chad