AS VISION EXPO WEST looms, many ODs start thinking about equipment purchases, or bringing in another line of frames in their optical.
Think about how a new piece of equipment can affect these three components of your practice: 1.) The patient experience. 2.) Efficiency. 3.) Your bottom line. It should immediately bring a positive boost to all three of these components.
Equipment is a business investment and one significant way to determine the importance of a purchase is calculating Return on Investment (ROI) by dividing your projected annual profits into the total price of the equipment. An annual ROI of 5-7% is considered acceptable. While there is no true rule, a breakeven point in years three to four of ownership generally allows a purchase to beat inflation and take advantage of depreciation in a manner favorable to overall practice revenue.
For new frame lines, consider first whether you need them. One quick and easy way to do this is to look at your turnover rate: i.e. how many times you sell through your entire inventory in one year. The industry average is 1.8x with top practices averaging upwards of 2.2x. Restricted choice is a tried-and-true method of increasing sales volume, so rely on your opticians’ expertise and curate your optical by assessing what is already doing well rather than just increasing quantity.
The bottom line: Ensure your purchasing is intentional and needed for your practice to increase revenue and efficiency.
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