Welcome to Business Essentials—A VM e-newsletter which is designed to help independent eyecare professionals learn more about how to manage the business aspects of their practices and dispensaries.
In this month's edition of Checks & Balances, BE's editors bring you some pearls of wisdom from Mark Wright, OD, FCOVD on how to create and elevate the Business Intelligence quotient of your practice. Wright, the keynote speaker at last month's IDOC annual meeting offers some practical, common sense examples sure to bolster your practice's bottom line. And speaking of green, in Revenue Streams, see how sustainability can improve your standing in the community while saving you a considerable amount of that all important green stuff, also known as money.
Have you tried something new and innovative in your practice or optical dispensary? Tell us about It and we'll consider it for an upcoming feature in Business Essentials.
Business Essentials spotlights practical ideas to improve your bottom line, examine the dollars and cents of your business decisions and find innovative, efficient ways to run your practice. We hope you can use this issue to improve and ultimately strengthen your business IQ. —The Editors
Mining the 'Business Intelligence'
of Your Practice
MASHANTUCKET, Conn.—Last month's 2011 IDOC Business Conference provided a perfect forum for the organization's members, both current and prospective, to understand the importance of managing the business side of an optometric practice. Keynote speaker Mark Wright, OD, FCOVD explained to attendees at the annual meeting of Independent Doctors of Optometric Care (IDOC) just how to "Utilize Business Intelligence to Effectively Manage Your Practice."
Dr. Mark Wright gives the keynote address on Utilizing Business Intelligence to Effectively Manage Your Practice to IDOC members.
His presentation, sponsored by the Management & Business Academy (MBA), explored the purpose of "business intelligence" (BI) and outlined how ODs can use it to support better business decision-making. Highlights included what business data should be gathered, how to analyze that information and ultimately decide what changes to make based on that data analysis.
In Wright's view, "doctors, administrators and office managers are experiencing the increasing difficulties of running a practice. There is increasing pressure on reimbursement, increasing operating costs, heightened degrees of complex things such as information technology, compliance, and regulations. Often times we hear complaints from practices that they don't have good information about their business. This may be because of the lack of good reporting coming out of the practice management system, the inability to understand their financials or detail of their payroll data," he said.
He defines BI as the "skills, technologies, applications and systems used to help a practice acquire a better understanding of its business context."
Wright advises, for business leaders who are making decisions about their practice whether it is a small practice or a multimillion dollar corporation, the best decisions are ones based on BI and answers questions such as:
- Which of my patients are most profitable?
- Who are my patients?
- Which products cost the most to maintain?
- Where can we cut costs?
- Which part of our marketing plan works?
Any successful business, and that includes an optometric practice, does five things in order to achieve success:
Create or provide something of value—durability and value is what patients are seeking. New contact lens patients, for example, also need sunwear so why not offer the patient value by discounting both products and offering the patient a value package…
Provide what other people want or need—if a shy child needs vision correction, consider contact lenses because it might just open them up…
Set prices at what patients are willing to pay—raise the price and if they buy, raise it again. If you don't have a minimum frame price in your practice, you're getting killed on managed care…
Exceed the buyer's expectation—in an industrial economy, consumers were looking for product that's reliable. We're then moved into a service economy where we took those services and wrapped it around the products. Five years ago, we moved out of service economy and into an experience economy. Now patients expect high quality materials and demand service. And finally…
Provide the business sufficient revenue—make it worthwhile for the owners to continue operation.
Finally, Wright advised the IDOC attendees that "if you cannot measure it, you cannot manage it," stressing the importance of key performance indicators, business metrics and practice statistics to mine the business intelligence and future success of optometric practices.
For more on this presentation and other sessions including a CEO roundtable on industry trends, click here.
Practice management consultant Mark Wright, OD, FCOVD is the president of Pathways to Success and Professional Editor for Review of Optometric Business. In addition, he is the author of the Coding, Reimbursement and Contracting for Optometry and serves as a faculty coordinator of the OSU College of Optometry Business Management Program. He can be reached at firstname.lastname@example.org.
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How Green Is Your Practice?
NEW YORK—While the practice of going green in the business world has long been fueled by a significant "social purpose" movement, the impetus to support sustainability has recently taken on an economic appeal as well. The conservation business trend has been gaining momentum in all industries, including optical where retailers and independents are beginning to see that the color green not only symbolizes "social responsibility" but can translate into money–saving opportunities as well.
At VSP Global, the company is in the process of certifying its HQ4 building LEED–EBOM in the hopes of receiving a platinum certification and have made energy efficient updates to their Data Center by installing lighting sensors in offices and conference rooms. The company has also reduced water consumption by 50 percent and installed Vending Miser devices that turn vending machines to half power and lights off during down times. According to a VSP Global spokesman, these efforts have resulted in an estimated annual savings of 20,800 Killowatt hours which translates into a dollar savings as well.
Wal–Mart's sustainability efforts are a company–wide agenda led by CEO Mike Duke and a range of executive teams throughout the 9,000-store organization, impacting everything from store operations and facilities management to transportation and product/packaging issues.
At the optical dispensary level, the focus is on creating sustainability efforts in terms of store fittings and office design. A prime example of this is the recent collaboration between optical dispensary design firm Eye Designs and Eco–Lite. The partnership focuses on improving lighting in existing stores and refurbishment projects.
A new website, OpticalLights.com outlines ways to learn more about Eco–Lite's LED products and other improvements. The site features an ROI calculator which allows users to determine savings on electric bills as compared to conventional lighting. There's also a quick–contact form for ECPs to request
a "30–day Trial Light" or "Free Lighting Analysis" of their optical shop.
R. Whitman Lord, OD, who runs six Lord Eye Centers in coastal Georgia, recently worked with Eco–Lite and the Eye Designs team to build out new locations for two of the offices. "We're very happy with the overall results and we saw our first quarter business up by more than 30 percent compared to our first quarter last year. I attribute that to the new, visible locations and the contemporary look of the offices," he said.
To learn more about going green in your practice, read VM's full Cover Story on Seeing Green: A Movement Takes Hold.