At this point, most optometry practice owners will agree that sharing metrics and results with your team can help sharpen focus, uncover areas to improve, and increase staff engagement. But what should you share? And is there such a thing as over-sharing?
Let’s consider what kind of data you can share, the right people to share it with, and whether it’s a good idea.
Role-specific metrics
One of the most important questions you can answer for your staff is whether they’re doing a good job. And measuring their performance is the best way to focus them on the most important activities and confirm how good a job they’re doing.
Measurable outcomes for some roles are obvious. Capture rates and average frame price for opticians, schedule fill rate for receptionist, or the aging report for billers. Other roles like technicians can be harder to measure, but there are objective ways to quantify their impact.
Depending on your office culture, these individual performance metrics might only be shared between the employee and their manager or be visible across the whole team.
Business performance metrics
It’s also great to share overall business performance with the whole team. Metrics like patient volume, revenue per comprehensive exam, and even overall gross revenue can give everyone a sense of how the business is performing.
I also recommend tracking the number of online reviews you get and reading them aloud in your team meetings. All reviews, both the good and the bad, are useful to reinforce your practice values and culture.
The tricky part is deciding whether to share financial statements with your team. For a lot of businesses, this makes sense. When our parent company, IDOC, started sharing financial results with the team, it reassured many employees about the company’s financial health and stability.
Financials stop at the top line
However, I usually advise against open-book management for independent optometry practices for two reasons:
- Operating income is the owner(s)’ income. This is the big one. Most practices we work with have one owner, five or six at the most. You could bury a large salary for yourself in payroll to keep the net income low, but that net income is your income after taxes and debt service. The practices that open their books inevitably twist themselves into knots trying to obscure the fact that operating income (profits) are the owner’s income. Which is a shame because…
- Staff have very little control over costs. Let’s do an exercise together: work your way from the top to the bottom of your P&L and ask yourself, “Who on my team controls this?”
- Revenue – everyone
- Cost of goods sold – optical
- Staff wages – owner and/or maybe a manager
- Rent – owner
- Equipment – owner
- Marketing – owner
- General & administrative expenses – your staff might handle some small items like toilet paper and copy paper, but big decisions like EHR or which CPA to use are up to the owner.
Metrics and optometry practice financial benchmarks can help your team understand their roles and focus on the most crucial tasks. These factors will contribute to the top-line revenue, which is the most we recommend many practices share. As for profitability, it’s rare for a practice to consistently grow its revenue without also increasing its profits.
If you want to learn more about how Books & Benchmarks can help you better understand your practice and identify ways to grow your revenues and profits, reach out to our team today to schedule a discovery call.
