practice costs

[subedude]

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Hey everyone, I haven't really been on here since I started optometry school, but now that I'm going into my second year I've started to think more about what I want to do when I graduate. Please forgive me if this has been addressed before but I've done a few searches and haven't gathered that much. I basically would like to know ABOUT what it costs monthly to run a practice. So here's what I've gathered from other threads/other people...

1) Rent: about 4k
2) Internet/Phone: about 700

Yeah that's basically what I have lol. My basic plan for what I'd like my practice to be, and please provide your input on this, is one doc, one tech/pre-tester, maybe one or two opticians working. So I guess what I'd like to know is about how much the other expenses will be, and also what I'm missing. I know there's going to be a lot of variation but I'm really just looking for ballpark numbers. Any help is appreciated...Thanks!

 

[KHE]

Hey everyone, I haven't really been on here since I started optometry school, but now that I'm going into my second year I've started to think more about what I want to do when I graduate. Please forgive me if this has been addressed before but I've done a few searches and haven't gathered that much. I basically would like to know ABOUT what it costs monthly to run a practice. So here's what I've gathered from other threads/other people...

1) Rent: about 4k
2) Internet/Phone: about 700

Yeah that's basically what I have lol. My basic plan for what I'd like my practice to be, and please provide your input on this, is one doc, one tech/pre-tester, maybe one or two opticians working. So I guess what I'd like to know is about how much the other expenses will be, and also what I'm missing. I know there's going to be a lot of variation but I'm really just looking for ballpark numbers. Any help is appreciated...Thanks!

There are no ballpark numbers for this kind of thing because it's entirely dependent on your location. It also depends heavily on whether you're talking about purchasing a practice or starting one cold. If you are starting one cold for example, a screener or pre-tester is a complete waste of money.

There ARE general guildelines for what a practice SHOULD be doing though.

For example, your cost of goods should not exceed 33%, ideally a bit less. Your rent should be X %. Your payroll should be Y%. Start by doing some research in some practice management books at your school library and you'll get a general sense of these things.

Good job thinking about it early! 👍

 

[aarlan]

Like KHE said all of the figures vary from location to location, but don't forget about:


Practice software (you don't even want to know how much this will cost you)
Hardware for your office software, computers, scanners, servers, routers etc
Insurance (professional, and for your equip)
equipment lease
Payroll for your receptionist/tech/optician
matching taxes for staff
benefits for staff
other utilities electricity,water, etc. (not always included in rent)
Cost of advertising
cost of signs
consumables, drops, plugs, etc
etc, etc, etc




It can be exhausting.

IF you are really serious about trying to open your own place, make damn sure you have about 3x as much money as you think it will cost, because you will get sideswiped by things you can't imagine. Make sure you have enough to not take a paycheck for a long time, and make sure you don't anticipate turning a profit for 2-4 years.

After you've undertaken this monumental task, try to be careful that when someone asks you why glasses or exams are so expensive that you don't smack them in the head.

AA

 

[Ryan_eyeball]

From a Corporate perspective, you're overhead typically won't be as high in terms of $ amounts.

Typical overhead per month for me is around $3000. This includes two practice rents, 3 phone lines (fax as well), secretary, health insurance (my family, and secretary), credit card fees, etc, etc... I pay for disability insurance but out of my own money.

I'm always amazed at how much people will spend on hair colorings, a heating and air service call, cell phones, but will complain about an eye exam cost.

A patient that says his eyes are fine for the past 4-5 years w/exams will think the exams are a waste. IF the eyes yellowed over time like teeth that needed cosmetic work, OD's would be booked out 6 months in advance.

 

[subedude]

so where should I look for this kind of information? I know there are practice management books but how do I find optometry specific ones? and also, if it helps, I plan on practicing in orlando

 

[KHE]

so where should I look for this kind of information? I know there are practice management books but how do I find optometry specific ones? and also, if it helps, I plan on practicing in orlando

Obviously, there isn't going to be any book titled "Optometric Practice Management in Orlando Florida."

So your best bet would be to start with practice management books in your schools library, get some general ideas into your head and then call up some ODs in the area you are thinking of practicing in and ask them for details specific to the area.

 

[subedude]

ok thanks, I'll check them out...but what are the expenses that are common to all opticals? that's more of what I was looking for...is it basically just what was posted above?

 

[NCiDOC]

Subedude,

There are a lot of places for you to find this information before you get into buying or opening a practice. Most of it is going to be related in costs as a percentage of your total gross. Meaning, at the end of the year, if your practice generates $500,000 from all the contacts, glasses, medical services, etc. that you do, that $500K becomes your numerator.

Then, everything that is taken out of that will be a percentage of it - employee costs, overhead, advertising, health benefits, taxes, etc. There is an actual cost to this but most of what you will find that is "common" to practices will be discussed as a percentage because the numbers do vary based on how much the practice makes and how much it has to pay for each of the variable costs to run the business.

Now, I am sure if you read or search through articles of Optometric Management or Review of Optometry, you will find some articles that do a decent job of describing this. Also, you can learn from organizations like O.D. Excellence, the Vision Care Institute by Vistakon and CibaVision's Management and Business Academy.

They will provide what are called benchmarks which give you a guide for how to figure out how varying eye care practices are performing.

Good luck!

 

[subedude]

Thanks! I'll look into those, I appreciate the help.

 

[zyg0te]

Does your school offer any business classes? Do they not provide this information?

 

[subedude]

yeah but it's not till third year and I'm already getting anxious lol...i found some stuff out though so it's cool