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Seven steps to retail heaven

Business
In the first of a five-part series finance expert Marc Bennett looks at increasing the profitability of an optical practice by reducing low-return activities. Over the coming months he will share strategies that have successfully boosted practices in the areas of refurbishment, valuation, VAT and succession planning

Many years ago I realised I had been asking practice owners the wrong question. When I first met up with them my opening line was always ‘How are you, are you busy?’ The reply was often the same and included details of how their filing cabinets were bursting with 9,000 patient records, there were not enough hours in the day to examine everyone and they had no time to assess the data coming out of their PMS.

Then it dawned on me that the question I should have asked them was ‘How are you, are you making any money?’

From many years looking under the financial bonnet of hundreds of practices, it soon became apparent that for many, operational activity was on the increase while profitability was waning. While I accept there are many reasons to run a practice other than for profits, the stark reality is that a practice will not survive in the medium term – let alone the long term – without surpluses to reinvest in equipment, staff training, marketing and rewarding owners/managers.

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