view from the top
view from the top
Living to Work or Working to Live?
Measure the things that can help you achieve the right life/work balance.
Gary Gerber, O.D.
Do you live to work or work to live? Baby boomers tend to lean toward the live-to-work side of the spectrum while Millennials occupy the work-to-live side. Regardless of your age and desire to work or play, one metric applies to this concept: That is, how much do you make per hour? If it's high enough, you can work less. If it's not, you can't.
Nearly all of us know our practice gross and net. Most know our labor costs and COGS. Fewer know the other line items on our profit-and-loss statements, and very few know how much they're making per hour. It's understandable. After all, if your practice is successful, with success defined any way you want it to be, why would you bother to figure that out? And if your practice struggles, why bother figuring out how much per hour you're making (or in this case not making? )You already know it's not enough.
But what is enough?
If you want to decrease your percentage of COGS, you have three global ways to do that. First, you can keep your absolute costs where they are, and increase sales. Second, you can keep sales where they are, and pay less for frames, lenses, contact lenses, etc. Third, you can do both — increase sales, and pay less for optical products.
Similarly, if you want to make more money per hour, three high-level ways exist to do it. (1) Make more top-line money and keep your hours the same, (2) work less and hope you make the same amount of money, or, (3) work less and make more. It's the last alternative, that given the choice, most of us would choose — even the baby boomers “live-to-work” segment of doctors would choose this.
How do you work less and make more? For starters, establish a focused and concrete goal. Defining how much less you'll work and how much more you'd like to make are good starting points. The problem with a lot of practice management advice is that your personal energy is never included in the calculations. For example, if you've read, “Sell more annual supplies of contact lenses” or “learn to be better at billing and coding” you didn't also read, “and don't let doing so consume any more of your time.”
Adding a time budget
The next time you add a new practice-building project, add a time budget component to it. For example, “We will increase our sales of photochromic ophthalmic lenses by 10% in the next three months, and I will work two hours less per week three months from now.” With this approach, you now have something tangible to work toward, and you'll have to figure out actionable ways to do it. For example, you might change your appointment template to compress appointment slots.
At the same time, you'll have to consciously and creatively be careful to allow enough time to train your staff on new ways to increase photochromic lens sales. Or, if you customarily don't discuss these lenses with patients during your examination and now you will, you might need to trim down a discussion about something else. Once this initiative is over, compare your compensation per hour before and after and course-correct as necessary to hit your goal.
It's been said, that which we measure tends to improve. And if you're feeling like you'd like to “live more” and “work less,” start measuring those things that can help you achieve that. OM
|DR. GERBER IS THE PRESIDENT OF THE POWER PRACTICE, A COMPANY SPECIALIZING IN MAKING OPTOMETRISTS MORE PROFITABLE. LEARN MORE AT WWW.POWERPRACTICE.COM OR CALL DR. GERBER AT (800) 867-9303.|
Optometric Management, Volume: 47 , Issue: October 2012, page(s): 17