I’ve always been good at making money when I needed to. In the course of my career, co-owning our practice with my OD-wife, Susan, we certainly have run into times when we needed some cash flow. The tough times were mostly in the early years, but I remember them well.
I know there are many practices out there that are struggling right now to pay their bills and make a profit, so this two-part article will provide some tools to examine the situation for success in the long term and produce some cash in the short term.
Find out what is wrong and fix it
I think most practice owners who are feeling a financial pinch don’t really want to examine why and how it got that way, but you must force yourself to look into it. We will explore some tactics below that can bring in much needed cash, but it will go for naught if you continue to spend more money than you take in. A short-term fix does you no good if you are struggling again six months from now.
It is also possible that by examining your business closely, you could uncover some wasteful mistakes that once corrected, can lead you back to a profitable situation.
I’ll provide a guide for analyzing your practice finances next week, along with some ideas about how to turn things around for the future. But for now, here are some tips for generating quick cash in your practice.
Extend office hours and see more patients
Of course, working longer hours won’t help much if you don’t have enough patient demand to fill the schedule, and that is often the case for a practice that is struggling. But the ideas below should help provide more patient flow, and if you see it working, open the office on some evenings and Saturdays. This is emergency mode, so be willing to work without a full staff if needed. Consider changing the staff schedule to provide some coverage for the longer days and also hiring some temporary staff to assist you.
Be lean and mean during this temporary period of dedicating yourself to generating profit. Do whatever tasks need to be done to examine patients and help them order eyewear.
Have an optical sale
I don’t like to give discounts very often, because your patient base will begin to expect it, but if you need a quick burst of cash to catch up on bills, lowering your prices is a great way to attract more business. There are many ways to do this:
• Have a frame fashion trunk show, but let it run for about a week. You can ask different frame reps to bring their full lines and have a different one each day. If you do this, promote a large discount, such as at least 50% off on frames (not lenses). Have door prizes, food and drink, make it a fun event.
• If you have a good email list of your own patients, this is the best group to market to for a sale or other event. You’ll get a strong response rate from your own patients, but you are just moving the business to occur sooner and you are lowering your profit by giving a discount. Still, if you need cash quickly it may be worth it.
• Send a discount coupon or gift card to the local zip codes via direct mail. You have to make the discount really big to get noticed and you must send a large number. Response rates can vary widely, but 2% is considered pretty good.
• You can always specify that the discount may not be combined with other discounts or vision plans. But consider giving some small discount to vision plan patients as well, because they are a large part of the population. Also, include an expiration date on any discount offers.
• Work with Groupon and offer a daily deal on an eye exam and eyeglasses. This allows you to tap into Groupon’s email data base in your local area.
• To provide an affordable yet profitable eyeglass package, you can buy additional frames from a value-line supplier or buy closeout styles at very low cost. This keeps your frame boards full without costing much. You can also work with your lab to use lower priced lens products.
• Offer and promote any other discounts you think will work. You could host a free in-office screening for bifocal contact lenses (on your usual day off) and then give a discount on the fitting fee for patients who proceed.
• You can send a special letter and discount offer to patients who have not been in for an exam in two years or more. This is a reactivation letter and it can be done along with a telephone campaign (see below).
Make reactivation phone calls
If you have not been calling patients who are past due for eye care, you can make a big difference in the appointment schedule by doing this. Run a report with your office management software to produce a list of patients who have not been seen for two to six years. Call the patient in the late afternoon with the primary reason for the call to let them know that they are due for an exam. Ask how the patient is doing and be very friendly. Be sensitive to the fact that some people do not welcome phone calls. You can ask if they have received your recall notices and if they want to continue to receive them. Also, ask if the patient would like to schedule an appointment now. Knowing if they have a vision plan helps immensely.
Inspire your staff to sell more
If my practice needed to generate more profit, I would share that with my staff. I would hold staff meetings frequently to discuss and train. I would remind them that the practice is a business and it needs to generate more revenue if it is to remain viable. It is part of everyone’s job description. I would make staff members feel that they are part of a team and we each have a very important role, from making more appointments, to selling premium optical products, to billing and collecting as soon as possible.
Talk to your opticians about selling multiple pairs of glasses to each patient. Brainstorm ways to achieve a much higher multiple pair sales rate. We sell multiple pairs by asking questions of the patient about his lifestyle and also by always offering 50% off the second complete pair.
Best wishes for continued success,
Neil B. Gailmard, OD, MBA, FAAO
Editor, Optometric Management Tip of the Week
Dr. Gailmard's new book, Practice Management in Optometry: A Blueprint for Success Based on the Optometric Management Tip of the Week, is now available on Amazon.