Do you ever have the feeling that maybe you and your office manager, receptionist, optician or frame stylist are not exactly in sync about what their priorities should be?

It happens. And, lack of alignment is generally the biggest reason for a decline in staff productivity.

And, that's not a good thing. When staff productivity declines, so does office morale, service levels to patients and your net income.

Here is a simple exercise you can do with your staff to head off the problem, or get back into alignment if you already feel out of sync.

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For every OD who ever worried about losing patients because your fees were too high, that includes me, it's important to keep in mind there is a flip side to that.

Low fees can also chase patients away.

Here are some excerpts from the Gladys Edmunds column in a recent edition of USA Today. She makes the case that low prices can actually scare patients/customers away because it creates the impression of inferior work.

Dear Gladys,

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One of my favorite blogs all year was Nine Things Successful People Do Differently by Heidi Grant Halvorson on the HBR Blog Network.

She wrote that most people believe that our intelligence, our personality, and our physical aptitudes are fixed — that no matter what we do, we can’t really improve.

As a result, we compare ourselves to others, often not favorably, and focus on goals that are all about proving ourselves. You need to quit that and work on acquiring new skills, such as being better at managing people or the business side of your practice.

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Dear Jerry,

I just read your blog regarding your suggestion that a dispensing OD should spend no more than 50% of his collected gross revenues on total staff expenses and Cost of Goods.

I get it. But, I have a question about my overhead structure. 60% of the patients I see have VSP and most of those are on a plan that does not allow me to supply the frames or do the lab work.

That got me thinking as my total COGS — which includes: contact lenses, frames and ophthalmic lenses — is only 23% of collected gross revenues. This seems to be much lower than the 30% number I see from Hayes Consulting, the AOA and the Ciba Vision Essilor MBA statistics.

I guess my COGS would be higher if I had more private pay patients and fewer people on VSP. Am I missing something here?

Benjamin Franks, OD, FAAO (name changed)

Dear Ben,

You are very astute to recognize a financial scenario not well understood by many practice owners.

Even though vision plans may pay you a discounted fee, good or bad, any plan that does not allow you to provide the eyewear to your patient will actually cause your COGS to decrease.

For an illustration of why, let's look at the practice of Dr. Seemore who had collected gross revenues of $800,000 in 2011.

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If one of your New Year’s resolutions is to grow your practice, and then manage it in a more businesslike manner, your most important task between now and December 31 is to set goals for what you want to do in terms of practice revenues and profits in 2012.

Goal setting does not have to be a complex process. Nor should your goals be overly complicated. In most cases, simpler is better.

Thousands of books have been written on goal setting, but I’ve found that it mostly comes down to these five criteria.

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Dear Jerry,

I enjoyed your recent lecture on cost control and practice overhead.

Here is my situation. I have a one man practice that will gross $1.2 Million this year.

I watch my overhead carefully. But, my total staff expenses, which includes all payroll taxes and related benefits, have risen to 26% of collected gross revenues. I know that is higher than you recommend.

My cost of goods, on the other hand, is only 24% of collected revenues. I think that is lower than the suggested range in the Hayes 7 Key Expenses.

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Here’s a story you can share with your friends and family as you take a few days off from your practice to give thanks and count your blessings this week.

History Of Thanksgiving

While their original destination was the coast of Virginia, the first Pilgrims were blown off course and reached Plymouth Rock, Massachusetts on December 11, 1620, after a long, hard journey at sea of 66 days.

Ill prepared for the brutally cold New England winter, 46 Pilgrims died of starvation and exposure over the next few months.

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A recent article in Businessweek reports that consumers have become more careful with their money and impulse shopping is on the decline.

Part of the reason is that people are doing more research online before they go out to buy something. I certainly do. And, this leads to less browsing on the shelves.

How To Reshape The Shopping Experience

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Hi Jerry,

I was reading your 9/15 article on staff bonuses and wanted to know what you considered General Office Overhead?

Would that be just office expenses or include repairs, telephone, utilities, etc.? What about fixed expenses like janitorial, legal, advertising etc.?

Thanks!

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Dear Jerry,

I would like to start a bonus program to encourage multiple eyewear sales to the same patient. What are some of the different ways to incentivize my dispensing staff in the optical department?

Ava Sharyl, OD (name changed)

Dear Dr. Sharyl,

It's a great question that I get asked a lot.

First off, I am not a fan of ‘spiffing’ individual staff members for product sales to patients.

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