Before I begin this article, I am going to make it clear, that this model will not work for everyone, and some people may think that I am crazy for not having an optical in my office.
I want you to read this with an open mind, and realize that creating a niche for myself in my community, is really what was at the core of my decision to not have an optical.
According to Review of Optometric Business, optical sales on average bring in about 40% of practice revenue.
So why would anyone NOT have an optical?
It seems like a no-brainer, right?
Well, not for me.
Here are some of the reasons why I decided against having an optical:
Before opening, I did a search of all the opticals in my area. Here is the list in just a FIVE mile radius:
- Pearle Vision
- Cohen’s Fashion Optical
- 2 Mom & Pop Opticals
- A Davis Vision is currently being built
- THE INTERNET >:0
- 2 Private ODs (add a few extra miles to the radius and we are looking at over 3 more private practice ODs)
That is a LOT of competition.
I personally felt that I could not bring something new to the table that the other guys did not offer. My next point also ties into why this obstacle was not one that I wanted to deal with.
2) No Interest
Let me be candid here, I do not like being a sales person. I recommend certain glasses, lenses, tints, upgrades, etc… based on NEED, not because I want to increase my bottom line.
I recently read a great book about becoming more efficient in all aspects of your life called “The One Thing,” by Gary Keller (I highly recommend this). A driving message in this book is that you should focus on ONE thing and be phenomenal at it.
Well, running an optical was the ONE thing I knew I was NOT going to focus my energy on because I do not have the passion for it.
See that list above?
I wanted all of those doctors to send me their patients that have binocularity and accommodative problems, low vision difficulties, traumatic brain injuries or any visual issue they couldn’t figure out.
My partner and I felt that we could go in and meet with these doctors and say “we want to treat X, we will send them back to you for any glasses needs.”
It may seem silly, but I found that a lot of the doctors appreciated the fact that we were not going to ‘steal’ from their bottom line.
The result was great referral sources.
4) Vision Insurance
Again, just being candid. Insurance is a big PAIN.
I am still working out how to bill medical appropriately, let alone having to figure out vision insurance ( i.e. the patient is responsible for 80% over 15 dollars if they purchase X frames with a credit card, unless they have a pet cat which also entitles them to a free pair of sunglasses).
5) Cost Savings
Speaking to a few colleagues about costs of funding and starting an optical, the cost varied immensely.
What I gathered after calculating build out, inventory, and staffing, it can run anywhere between $20,000- upwards of $100,000.
f you are a DIY’er you can definitely cut costs. Again check out Dr. Dryer’s helpful hints like this one on how to save $49,000 on optical costs.
I felt that the money that would be spent in setting up an optical, (which requires more space, more employees, and a huge learning curve) would be better spent in other areas of my business.
6) My partner and I can spend all of our energy creating an alternate revenue source; namely specialized optometric care in the form of vision therapy and rehabilitation.
I believe that the vast scope of our optometric skills get forgotten sometimes when we get stuck in the hamster wheel of just needing to make money.
If we focus our time on offering services that can set us apart it can be a huge source of revenue in business.
If you have a passion for glaucoma, be the glaucoma OD that all your colleagues in the area refer to!
If you like dry eye, be the dry eye doc!
If you like contact lenses, learn every specialty contact lens there is and be the one that everyone (even MDs) send to!
By doing this, you gain AUTONOMY and do not have to solely rely on what insurance dictates. We have to remember that our services are valued and patients will pay if the care they receive is top-notch.
What does this mean from a business standpoint? At my office we are only on three medical insurance panels (Medicare, BCBS, and Aetna) and one vision plan (Aetna is linked with Eyemed) for contact lens benefits.
For those patients that have other insurances or no insurance, we offer CareCredit as an option to pay for our services.
I may see less patients in a day, but with less overhead (and inventory) paired with charging appropriately for my services, my profit ratio is much higher.
1) You have to rely on someone else to make glasses properly.
To Combat: Go around to local opticians and create relationships with them. Make sure you know the quality, strong suits (prisms/high Rx’s) and turnaround time for each optical so you can refer appropriately.
2) It can be difficult getting people in the door in the beginning when you do not offer optical services.
To Combat: This is a hard one. I will not lie to you, my office was VERY slow the first two months we were open. It took time to get our name out there, for our advertisements to be seen and for us to make those connection for referral sources.
We have been open for over for six months, and we are picking up quite rapidly now that the wheels have started rolling.
3) Potential loss in profit.
To Combat: As mentioned above, all the information I could find indicated that the average optometric business relies on about 40% of their revenue to come from optical sales.
How was I going to make up for that? By offering a valued service that no one else in my area was!