Matt Geller, OD, sat down with Bryan Rogoff, OD, MBA, CPHM, the owner of EyeExec Consulting and past president of the Maryland Optometric Association, at SECO to discuss what it means to operate a “million dollar optometry practice” and other advice on the business of optometry.
The phrase “million dollar optometry practice” is a little misleading, says Rogoff. “A million dollars is always that number you want to strive for; it’s that magic number,” he says. “But I always tell people: be careful of the million dollar revenue mark, and see what you’re netting. That’s the first thing, always. Because you could have a million dollar practice and a million dollars of expenses, and you’re not making any money.”
Revenue is important, but it’s equally important to be analyzing how you’re making that revenue. A lot of doctors will head straight for the medical model, Rogoff says, because that’s the industry standard. But the medical model comes with a lot of associated expenses. “It also requires the most capital,” says Rogoff: “So even though you might be increasing your revenue, your capital expenses for that will be going up as well.”
Some of this has to do with reimbursements, but it also has to do with all the moving parts of the medical model, which don’t automatically lend themselves to profitability.
But what’s key, says Rogoff, is meeting your patients where they are. You retain patients by offering services they need and want. Knowing your patients’ needs and the market in which you’re operating will help increase revenue and keep your practice growing.
There’s an element of luck and environment to better results, of course, but a lot of it has to do with mindset and attention. It’s important to be competitive, and part of that means taking time on the side to learn about business and marketing.
When it comes to tips for new grads who want to learn about managing a successful practice, Rogoff advises to learn about accounting—and not just tax accounting!
“What I encounter a lot, is a lot of people use tax accounting. . . . [Knowing what you can write off] has nothing to do with the operations of the actual business. So that leads to the pitfall of, they don’t have the cash flow to keep the lights on. They don’t see that their accounts receivable are coming from different insurances, they might be paying later when they have to pay their employees. And those are the biggest pitfalls,” Rogoff warns.
“Knowing your accounting is key, but then also knowing the market, and really understanding what your patients want and what they’re coming in for, and the needs of those patients—that’s what’s going to be driving revenue into the practice,” he adds.
When asked what patients want in 2018, Rogoff says, “I think the biggest thing is efficiencies.” Nobody wants to stand in line or wait to fill out forms—everyone wants speed and accuracy! Some practices are currently championing this kind of efficiency, which translates as ease for both patients and office staff. Smoother operation leads to a better experience for everyone.
Some of this means disruption, and that can be disturbing to a lot of private practice owners, but Rogoff suggests that it can be really beneficial to follow these new trends. A lot of the disruption to the industry comes from ODs bringing in business and management know-how from outside of optometry, from other industries that are experimenting with different ways of business management or marketing.
On that note, Rogoff suggests some light reading for any young OD looking to improve their business: Who Moved My Cheese? is an oldie but goodie by Spencer Johnson, which shows the pitfalls and what happens when you ignore innovation. “It’s good for any situation in life,” laughs Rogoff.