Tag: SIMI

Frame Inventory Requires Intensive Management

Practice, Products | Services | Industry News

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In business, we talk about “revenue” centres in a business. These are distinct areas of the business that generate sales.  In a full scope primary care optometry clinic, we generally recognize eye exam services and eyeglasses sales as the two main revenue centres. From these two centres, we expect 50-60% of the revenue of the business will be generated by eyeglass sales and 30% by eye exam services. The remaining 10-20% of the revenue is generated by a mix of diagnostic testing, contact lens and miscellaneous product sales.

Given that, it follows that 50% of your focus on the business should be on managing the optical. As with any business, the first step in operating a successful optical is determining an intentional strategy. Are you the lowest cost provider? Are you offering unique products that can’t be found everywhere? It is imperative that you answer the question of how are you setting yourself apart from the competition.

Once you have determined what your strategy is, you need to clearly articulate it to your staff and to your patients. Just like consumers understand why they would patronage a second hand store versus a high end boutique, it should be just as clear to your patients what shopping experience they can expect in your optical.

With your strategy clearly defined, the next step is to make sure all of your processes and procedures in the optical support it. If you want to be the “go to” optical for unique product then you are planning to visit the Vision Expos to do the majority of your purchasing. If you want to offer good product at great prices, then you need to carefully evaluate your frame and lens costs to ensure you are getting the best discounts possible. If you want to offer convenience, you should set up direct insurance billing and shipping directly to the patient’s home.

Whatever your strategy, the frame inventory needs to be managed daily. Someone needs to be tracking what lines are doing well, if the optical is staying on budget, entering new product into inventory and paying attention to inventory control to prevent theft. This part of the business is bringing in 50% of the revenue – and to do that well and to stay ahead of the pack, it needs to be micro-managed.

Quarterly and annually, you should be evaluating the frame turn of your inventory as well. In general, each line should be turning 2-3x per year. If you have a high volume practice, you will have lots of data to make purchasing decisions with from your EMR. If you are following a boutique strategy and purchasing in bulk and then selling off, evaluating the turn will be a more manual process.

One last word of advice; be intentional with your frame strategy and resist the temptation to offer what everyone else is. The clearer your strategy, the clearer the value proposition is to the patient, the more successful your business will be.

KELLY HRYCUSKO

is the co-founder and managing partner of Simple Innovative Management Ideas (SIMI) Inc. and expert Practice Management contributor for Optik magazine. She can be reached at info@simiinc.com.

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Beating the Winter Blues

Human Resources, Managing Others

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January and February are often tough months for many people. After the excitement of the holidays, the reality of a long, dark winter is hard to accept.  It is never more important than now to ensure that your team is feeling engaged and rewarded at work.

The beginning of a new year is a great time to touch base with staff and discuss what their goals are. What things would they like to learn or achieve this year? How can the practice help them achieve their personal career goals? Not every employee has goals so be sure to come to the meeting with some ideas of what might be possible to provide some additional training or responsibility.

Offering the opportunity to build new skills or enhance existing talents with training and professional development is a great way to rejuvenate staff. There’s a bonus in it for you, too, because you’ll end up with more well-rounded staff who are better able to handle a variety of roles.

If you don’t have a system in place already to acknowledge a job well done, there’s no better time to start than the beginning of the year, when many employees struggle with motivation. Reward deserving staffers with sincere, public praise, or offer them something more tangible, such as bonus pay, time off, or tickets to shows and sporting events.

In fact, maybe you want to make it a team outing. Christina and I recently tried out a Salt Cave Spa experience together. It was SO good for us! Lots of laughs and some down time made us much more productive for the rest of the week. It is hard to take time out of our busy schedules, but the reality is this down time often pays off in spades.

Our diet also plays a big part in how we feel. Rather than bringing that box of leftover chocolates from the holidays to the office, try to get your employees back on a healthy track by providing fresh fruit, squeezing juice instead of brewing coffee, or starting up a salad-sharing club.  Getting back on track is much easier when it’s a group effort!

At the same time, promoting physical fitness can be a big help in lifting people’s spirits. Whether it’s lunchtime jogs, weekly yoga sessions, or a simple group stretching routine every morning, getting the blood flowing is a great way to shake your staff out of the doldrums.

We have been working hard to clean our home lately. There is a certain show that has inspired me to pick up everything we own and determine whether or not it sparks joy. It turns out that this is a great time of year to purge! Very little is passing the “spark joy” test. The truth is, things start piling up and you stop noticing them. Just like at home, this is a great time of year to schedule some time for your employees to clear away any accumulated junk, piles of paper, and other distractions from their work space. Make it fun event if you want, with a booby prize for the person who tosses the most in the trash.

Finally, a lack of daylight is one reason that many people struggle with their mood once the holidays are done. The solstice has come and gone, and the days are gradually getting longer again, but it’s still tough to see the sun slip below the horizon so early every evening. Consider investing in a few light therapy lamps and let your staff take turns basking in their bright glow. Sometimes, just the acknowledgement that others are feeling the effects from the shorter days too helps everyone to mentally cope with the long, cold winter.

KELLY HRYCUSKO

is the co-founder and managing partner of Simple Innovative Management Ideas (SIMI) Inc. and expert Practice Management contributor for Optik magazine. She can be reached at info@simiinc.com.

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Six Keys to Making a Partnership Agreement Work

Finance|Wealth, Resources

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Many optometric practices are set up as partnerships. It’s a great way for the business to benefit from multiple owner’s diverse knowledge, skills and resources. With more than one person making decisions and affecting outcomes, however, different aspects of starting and running the business need to be addressed upfront.

When Kelly and I first started out, we took the time to write out our expectations for as many scenarios as we could think of, wrote it out and signed it. We strongly recommend that our clients who are forming a partnership do the same. Create a partnership agreement that details the business ownership and responsibilities today and in the future.

A quick internet search for “partnership agreement templates” can get you something to use as a starting point. You will want to make this agreement as detailed as possible to reduce conflict in the future. Having a lawyer read over your final agreement it is likely the most prudent approach. This document will serve as the road map for your decisions both day to day and years to come – it deserves a significant amount of your time, energy and resources to develop.

There are a number of crucial areas that should be addressed in your agreement.

Contributions
You will want to make it clear, and likely equal, in terms of how much each partner invests financially, at the beginning of the partnership. It is just as important to discuss how purchases will be made in the future. These discussions should include the clear delineation of what each partner will do for and in the practice. Will one take on more of the staff management while the other will take care of the accounting?

Distributions
When you are just starting out, you are happy if your bills are getting paid. But it is also important to define how profits will be divided when the time comes and if and how much of a salary each partner will draw from the practice. You may want to talk about a 3- or 5-year plan as well. How much money will be coming into the practice before you increase your draw? How will you pay for large expenditures? Do you intend to save or use credit?

Ownership
It is hard to imagine ever leaving the practice when you are first starting out but there are a lot of circumstances that should be considered. What if someone gets sick and can’t continue working? What if someone passes away? What if one partner becomes independently wealthy and wants to walk away? One option would be to sell the stake in the practice. What is your position on taking on a new partner? What are the options for buying out the other partner? Who will take on the responsibility of getting the practice valuated? It is also important to sign a non-compete. In the honeymoon phase of a partnership, it is hard to imagine things going south. But in the case of a tough split, it is better to have a written agreement to follow and a non-compete clause to protect the interests of the business.

Decision Making
As both partners get busier and have other stressors come into play, making decisions together will get harder and harder. You need to define how day-to-day management and long-term decisions will be made. Who gets the last say? Identify what types of decisions require a unanimous vote by partners, and what decisions can be made by a single partner. By setting up a decision-making structure that everyone understands and has agreed to, you’ll have the foundation for a more friction-free business.

Dispute Resolution
While everyone hopes to avoid a major falling out, it is important to plan for it so that everyone understands what will happen from the outset. You might agree that if the two parties are at a complete impasse, mediation might be the first step, followed by arbitration.

Critical Developments
Kelly recently had a health scare and was hospitalized. There was no question as to how we would proceed – and that made it easier on everyone. She could look after her health, I kept the ship going in her absence. It wasn’t something we had to talk about at that time because the expectations were already clearly defined from the beginning. Having a partner to share the ups and downs with is a blessing. Setting it up properly right from the beginning allows you to navigate the years of your business together with peace of mind.

 

CHRISTINA FERRARI

is the co-founder and managing partner of Simple Innovative Management Ideas (SIMI) Inc. and expert Practice Management contributor for Optik magazine. She can be reached at info@simiinc.com

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New Year, New Goals

Finance|Wealth, Human Resources, Practice, Practice Metrics & Benchmarks, Resources

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Whether or not you believe in making resolutions, the beginning of a new year offers a perfect opportunity to reflect on what went well in the past year and what you would like to see improve or change in the coming year.

Intentionally focusing on specific priorities for the new year helps you to create a defined path. This gives you clarity and purpose.

What are your purposeful goals for 2019? Do you want to start preparing for retirement? Do you want to increase your eyeglasses capture rate? Do you want to introduce a specialty branch to your clinic? Maybe you want to open your own clinic or a second clinic?

Once you have determined what you want to do in 2019 to consider it a successful and fulfilling year, flesh out a plan to achieve them. What needs to happen on a weekly or monthly basis for your goals to be realized? Make the plan as detailed as possible.

By way of example, let’s consider the goal of increasing your eyeglasses capture rate. The plan may look something like this:

  • Week 1: Set up a tracking system to follow your capture rate every day.
  • Week 2: Set up a weekly meeting to review the capture rate results with the whole team.
  • Week 3: Do a cost comparison of lens companies. Which company offers you the best value? Create a lens offering with these products.
  • Week 4: Set up a training session to ensure all team members are familiar with the product offerings and pricing.
  • Week 5: Invite your lens rep in for product training.
  • Week 6: set up a bonus system to acknowledge the team’s efforts as the capture rate increase – this will be tied to the tracking system from week 1 and the accountability meetings you set up in week 2.
  • Week 7: practice your handoff. What works well? What can be improved? Would it help to have a dispenser assigned to a doctor every day?
  • Week 8: Team training at the weekly meeting. Walk through the handoff. What could be improved? Share success stories – let’s repeat those! Any gaps that needs to be closed on pricing strategy?
  • Week 9: What are some of the common objections in the dispensary? How can we overcome them?
  • Week 10: At the weekly meeting, be sure to review results – where are we and where do we need to be to achieve bonus? What could we do/offer to improve our results? Are we offering a second pair option to every patient?

Whatever you envision for 2019, take the time to flush out a plan to help you achieve it. Don’t be afraid to only focus on one goal. As they say, Rome wasn’t built in a day. The more time and effort you put into your plan now, the more likely you are to achieve it. So whether you believe in resolutions or not, take advantage of a time of year that lends itself well to reflection and purposeful goal planning.

 

KELLY HRYCUSKO

is the co-founder and managing partner of Simple Innovative Management Ideas (SIMI) Inc. and expert Practice Management contributor for Optik magazine. She can be reached at info@simiinc.com.

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Should staff be able to use personal cell phones while at work?

Human Resources, Managing Others

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In our last article, we discussed the importance of having an Employee Handbook. This time, we wanted to specifically address an issue we often get asked about: what the rules around cell phone, office computer for personal things, and accessing personal email should be.

Technology has introduced an interesting quandary: while technology can improve office efficiency and productivity, there is also a concern that personal use of technology can decrease an employee’s efficiency and productivity. Let’s begin by addressing cell phone use. There are some programs now that require an employee to sign into their EMR account with a two-step process that includes receiving a code on their phone to gain access. In these cases, the employees must have access to their cell phones at all times. And access will inevitably mean use.

Many owners worry, rightly so, about the loss of productivity in these cases. However, there is another school of thought. What if having access to their phone increases their workplace satisfaction and that happiness translates into more productive employees?

According to Forbes magazine in an article entitled “Promoting Employee Happiness Benefits Everyone” dated December 13, 2017, Happy employees are also good new for organizations: The stock prices of Fortune’s 100 Best Companies to Work for rose 14% per year from 1998 to 2005, while companies not on the list only reported a 6% increase. Perhaps the best course of action is to set some clear expectations around discrete cell phone use. Many offices find it helps to implement a policy of keeping cell phones in drawers – out of sight out of mind – when not needed.

It is imperative that employees are discouraged from using practice computers or email for personal use. This restriction has less to do with decreased productivity and more to do with the risks associated with viruses and breaches in security. Setting up a practice email is fairly easy through email. This way the owner or office manager can also keep an eye on email transactions to make sure nothing slips through the cracks.

Almost everyone uses Google, both for business and personal use. In order to create clear line between the two, consider setting up a laptop in the “staff area/lunch room” that can be used for personal searches. This type of set up will set up the right expectations and make it easy to do so.

Whatever your policy is, make sure you outline every detail of it in your employee manual so that your expectations around this is very clear. Technology is changing the face of how we do business and how we organize our personal lives. We need to embrace technology in our practices to stay relevant in today’s marketplace. Setting clear expectations for personal use of technology will make it easier for all involved.

 

KELLY HRYCUSKO

is the co-founder and managing partner of Simple Innovative Management Ideas (SIMI) Inc. and expert Practice Management contributor for Optik magazine. She can be reached at info@simiinc.com.

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Every Office Should Have an Employee Handbook

Human Resources, Managing Others, Training & Onboarding

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An employee handbook lays the foundation for the practice’s expectations for their employees. The handbook should describe every office policy from what normal working hours are to what to do in case of illness.

With the introduction of legalized marijuana recently, we have advised our clients that it is a good time to update their Employee Handbooks. Just as it is not appropriate to consume alcohol either before or during work, it would also be inappropriate to consume marijuana before or during work. Many people do not realize that smoking marijuana is not the same as a cigarette. As well, a prescription for medical marijuana does not entitle a person to come to work impaired.

While you’re at it, there are other parts of the handbook that should also be reviewed. How many sick days are employees allowed, paid or unpaid? How many vacation days are employees allowed? How does seniority apply in your practice?

Workplace Safety or Occupational Safety boards for each province have many stipulations when it comes to health and safety in the workplace. Are your policies and procedures clearly articulated?  Have you designated a Health & Safety Ambassador to answer any questions employees might have?

If your expectations are clearly laid out in a Handbook, it is easier to have difficult conversations with employees should a situation arise. As an employer, you can reference the book and remind them that a certain expectation was laid out for them right from the beginning.

Whenever you have a new employee start work, an important first step in orientation is making sure that they read the handbook and sign a document acknowledging that they did so. This makes it more likely that employees will be compliant.  The expectations have been clearly laid out.

As you wrap things up for the end of 2018, review your employee handbook to ensure that you are compliant with all the new or revised labour requirements introduced over the past year.

 

CHRISTINA FERRARI

is the co-founder and managing partner of Simple Innovative Management Ideas (SIMI) Inc. and expert Practice Management contributor for Optik magazine. She can be reached at info@simiinc.com

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