1. 10 Ways to Increase Profitability Mark R. Wright, OD, FCOVD mwright@pathways-o.com

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

3. Mark Wright, OD, FCOVD President: Pathways to Success Editor: Review of Optometric Business www.reviewofoptometricbusiness.com 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

4. 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

5. Define and calculate profitability

6. 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.”

7. Money IN Money OUT Money LEFT OVER

8. 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% - 34.2%26% Staff PayrollAll costs for having staff15.5% - 24.2%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% - 10.3%6% MONEY LEFT Dr PayrollCosts for doctors20% NetWhat is left over20%

9. Identify the 10 ways to increase profitability

10. 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

13. Stop sorting sand Make a master list ROCKS SAND

14. Educator Husband Parent CEO Editor Investor

15. Fiscal health Risk management Practice administration Future planning CEO

16. Human relations – Hiring and Training – HR Reporting and Management – Firing Procurement – Equipment – Clinic Supplies – Inventory Information Technology – Computer System – Telephone System – E-Mail 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

17. 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

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

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

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

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

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

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

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

27. 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

28. 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

29. Create a system for managing the trends

30. Utilize staff to help in management

31. Create a reporting plan

32. Create a system to maximize profitability

34. Mark Wright, OD, FCOVD Pathways to Success mwright@pathways-o.com Thank you !