Toppin's road to riches

Making money in retail optics is easy, says Archie Toppin. The problem many independent optometrists face is that they simply don't know what business they are in and haven't a clue about management.
After many successful years in independent practice, Toppin is offering to share his experience, ideas and concepts, to enable others to increase sales and double their profit. Being financially successful isn't about ripping people off, becoming hard-nosed or losing your professional integrity, he says, it's about understanding the business you're in.
Worrying about income is new for many optometrists, he says. For many years making money out of retail optics was too easy, but increased competition and falling prices have changed that. Average practice turnover is £368,000, producing a net profit of £110,000. But for independents the numbers are more likely to be sales of £307,000 and £48,000 net profit.
The reasons for this are simple says Toppin. 'Most optometrists think they are in the medical business, but they're not. It's a fashion retail business with a pseudo-medical element. We're not doctors, we have got a BSc. We're science graduates.
'Many owner-practitioners don't push their business, because they think they are doing well when they look at other professions for comparison. They don't look at the practice's potential.'

advice at a price
But optoms are seeing their incomes fall. After being approached by other practices, Toppin and his director of training David Young decided to set up Toppin Young to offer their ideas to other practices. It is this business concept that Toppin will present at the Eyecare 3000 meeting.
There are five fundamentals to his approach. The first is knowing your key ratios. 'It is all about general business ratios,' says Toppin. There are hundreds of ratios you could consider but: 'The number one is gross profit. If you don't know what this is, everything else is a waste of time.'
While the national average for this figure is 70 per cent of sales, for independent practices it is typically 65 per cent.
The next key ratio is staff costs. These should be 20 per cent of sales, but in an independent practice these costs may typically be 30 per cent. Independents often have too many staff, he adds. 'They want to be big guys, it's just empire building. Some people I have met don't know what their gross profit is but boast about how many staff they have.'
Other owners don't know how many staff they employ. 'Many small groups have too many overheads; they like to be surrounded by lots of adoring staff.'
The second fundamental is relationship marketing. 'There is no point in advertising if you haven't done relationship marketing,' says Toppin. You must have personal contact and a relationship with your customers before advertising for it to work.
Toppin advocates the use of a glossy practice magazine to 'help your positioning'. Most opticians see the patient walking out of the door with a pair of glasses as the end of the process. 'That is when the relationship starts,' he says. Patients shouldn't only be contacted when the optician wants to sell them some more glasses. A glossy magazine can present issues and products, answer questions, promote ideas, and engage people.
Training staff is the third fundamental. This has to be a professionally conducted consensus approach, says Toppin.
Toppin Young visits the practice and talks through its performance and how it can be improved. Why isn't the practice making 70 per cent gross profit? Where is it going wrong? A programme is developed from that conversation with the staff. 'They come up with the detail,' says Toppin.
'We keep finding that the staff say it is the optometrist who tries to run everything from the consulting room. They are either a Òma–ana-typeÓ or have a finger in every pie.' Staff can be candid. If there are too many staff they are often the first to point it out.
The fourth fundamental is to draw up a written and agreed set of staff procedures. 'We ask them what is the best way of dealing with customers so they develop and buy into the procedures. This way they are signing up to using the best way and not deferring to the easy option.'
When the staff all agree, the procedures are typed up and copies handed out. They are then asked to sign and keep a copy.
The final fundamental is monitoring the key ratios and ensuring the procedures are employed. 'When we do spot checks we get the procedures out,' says Toppin. As the procedures are made and agreed by the staff, they want to maintain those standards. Everyone in the practice has to be involved in the process. 'We have to monitor it and mentor it,' he says.
To some, Toppin's ideas may sound harsh, but he maintains they are fair, so long as running a professional optical retail business is what you want to do. Some practices he has visited have a conversion rate of 50 per cent. 'If you eliminate the time-wasters and all the things that go along with that and get to 80-90 per cent, you don't have to work so hard.
'If you are getting £16 to see a child who doesn't need specs, it is costing you money. That money has got to be found somewhere and it is being lumped onto other people.
'For those practitioners who want to run shared-care schemes and see non-profitable patients that's fine, they can go their way.'
But, he says, most practitioners who see the concept want to do it and they don't have to be unethical. 'Once you are earning £150,000 and not working so hard you can set up a charity doing shared care.'