10 Ways to Increase Profitability Mark R. Wright, OD, FCOVD

This power point presentation was created by Mark R. Wright, OD, FCOVD Copyright 2014 – Progressive Publishing Company – All rights reserved

Mark Wright, OD, FCOVD President: Pathways to Success Editor: Review of Optometric Business Author: Coding, Reimbursement and Contracting for Optometry Faculty coordinator of the OSU College of Optometry Business Management Program 2006 Benedict Professor: University of Houston 1980 – 2007 founder: Professional VisionCare, Westerville, Ohio

The attendee will be able to... 1) Define and calculate profitability 2) Identify the 10 ways to increase profitability 3) Create a system for managing the trends 4) Utilize staff to help in management 5) Create a reporting plan 6) Create a system to maximize profitability

Define and calculate profitability

Definition of 'Profit‘ Investopedia “A financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs and taxes needed to sustain the activity. Any profit that is gained goes to the business's owners, who may or may not decide to spend it on the business.”

Money IN Money OUT Money LEFT OVER

CATEGORIESDEFINITIONRANGEYOUR BUDGET MONEY IN Revenue Money actually collected CLINICAL SERVICES MATERIALS OTHER $640 - $1.4M$800K/FTE OD MONEY OUT COGS MATERIALS Lab bills + In-house lab OTHER 23.9% %26% Staff PayrollAll costs for having staff15.5% %20% OccupancyOccupying your space4.4% - 8.9%6% EquipmentClinical equipment0.2% - 3.4%1% MarketingInternal and external marketing0.6% - 2.3%1% OverheadEverything not covered above3.3% %6% MONEY LEFT Dr PayrollCosts for doctors20% NetWhat is left over20%

Identify the 10 ways to increase profitability

10 ways to increase profitability 1.Stop sorting sand – increase your personal productivity 2.Increase income 3.Increase your ROI on marketing 4.Decrease COG expenses 5.Decrease Payroll expenses 6.Decrease Overhead expenses 7.Create Profit Centers 8.Actively manage by the numbers 9.Manage risk 10. Understand and manage money

Stop sorting sand Make a master list ROCKS SAND

Educator Husband Parent CEO Editor Investor

Fiscal health Risk management Practice administration Future planning CEO

Human relations – Hiring and Training – HR Reporting and Management – Firing Procurement – Equipment – Clinic Supplies – Inventory Information Technology – Computer System – Telephone System – and Website Management Operations – Scheduling – Examination – Treatment and Dispensing Finance – Revenue – Expenses – Tax Reporting Quality Control – Staff Proficiency Testing, Education and Discipline – Patient Quality Control – Laboratory Quality Control Public Relations – Internal Marketing – External Marketing – Success Stories CEO – Practice Administration

1.Once a week for 30 minutes – Schedule your big rocks – Prioritize your master list (sand) 2.Daily, spend 10 minutes to plan your day

Increase income 1.Increase fees 2.Increase income/pat 3.Increase new pats 4.Increase visit freq

Increase your ROI on marketing 1.Create projects 2.Tips for Tracking 3.Measure 4.Most effective

Decrease COG expenses 1.Buy in bulk 2.Buy stock lenses 3.Merchandise 4.Manage inventory 5.Manage shrinkage

Decrease Payroll expenses Have the correct number of staff Each staff member is productive Manage the schedule

Create Profit Centers Clinic Optical Money IN - Money OUT Money REMAINING Money IN - Money OUT Money REMAINING

Actively manage by the numbers 1. Yearly goals 2. Weekly review 3. Daily tracking

Manage risk Disability Insurance Exit Strategy – Vertical – Horizontal 25 documents everyone MUST have

Marriage and Divorce Marriage license Divorce papers Life Insurance and Retirement Life insurance policies Individual retirement accounts 401(k) accounts Pension documents Annuity contracts Healthcare Personal and family medical history Durable healthcare power of attorney Authorization to release healthcare information Living will Do not resuscitate order Bank Accounts List of bank accounts List of all user names and passwords List of safe deposit boxes Proof of Ownership Housing, land and cemetery deeds Escrow mortgage accounts Proof of loans made and debts owed Vehicle titles Stock certificates, saving bonds and brokerage accounts Partnership and corporate operating agreements Tax returns Essential Documents Will Letter of instruction Trust documents

Understand and manage money Rich Dad, Poor Dad … E-Myth Passive Income vs Active Income 1.Active Income 2.Passive Income 3.Financial Freedom 4 Different Type of Money 1.Income (Active) Most or Least important? 2. Profit (Passive) Intentional or Accidental? 3. Flow How $ moves through practice 4. Equity (Passive) 2 nd most important asset

Create a system for managing the trends

Utilize staff to help in management

Create a reporting plan

Create a system to maximize profitability

Mark Wright, OD, FCOVD Pathways to Success Thank you !