“Economic pressures have intensified, and practices like mine are facing critical issues”

In my corporate roles, understanding this relationship was fundamental. However, since taking on the role of practice owner and director of one of the largest Boots Opticians franchises, where I carry full financial responsibility, this awareness has become even more critical.

Challenges in 2024

2024 has been particularly onerous. In many ways surpassing the difficulties faced in the past three years post- pandemic. Economic pressures have put a real stranglehold on the business. Specifically, a heady cocktail of macro-economic cost push inflation and labour shortages (a manifestation of post-Brexit) has increased costs of recruiting professional and non-professional staff. While labour shortages were previously regional, they are now ubiquitous up and down the country, and different industries vie with each other to recruit from a smaller pool of unskilled workers. Increases in the minimum wage, as well as utility costs, transportation and freight costs have added to a businesses operating costs.

This year, 2024, has proven to be one of the toughest in recent memory, outpacing the challenges of the past three years post-pandemic

Rising salaries, flat sales

In the past two years, salaries in optometry have increased, while sales have remained flat or declined. This lack of congruity has put significant pressure on practice owners, including myself, forcing us to rethink our financial strategies in the background of a business model which hasn’t largely evolved. Controlling wage inflation is now a priority, often leading to significant opportunity costs – specifically, having to reducing clinic hours to keep overheads manageable or curing back on reinvestment. Without a profitable clinic, it is impossible to pay competitive wages or, in some cases, to continue operations.

Practice owners are having to become acutely aware of this reality, recognising that a clinic’s sustainability is purely a profit equation and that revenues continue to out manoeuvre a rising cost base. Simply put, the clinic revenue has to outpace inflation, as well as, the cost of its delivery, otherwise the business becomes unfeasible.

Open discussions about profitability and financial health are becoming more common throughout NHs sectors.

A shared challenge across healthcare

This financial juggling isn’t unique to optometry; it’s mirrored across healthcare sectors like general practice, dentistry, and pharmacy. These fields all face a common challenge: to be able to operate a business model in which you generate a sustainable growth in revenues whilst managing one’s cost base. Profitability isn’t a luxury; it is a necessity for provision of a quality service, paying staff and reinvesting in the business such as new expensive technology or a refit.

To stay competitive in this difficult economy, practices must imbibe a proactive and reactive culture. For my practice, this means reviewing monthly adjustments to stay ahead of financial pressures. This involves not only altering clinic hours, but also reassessing staffing and other operational expenses to keep revenues and costs in check.

Open conversations about money, profitability, and the business’s financial health are becoming increasingly important across the sector

Preparing for the future

Looking forward, the financial outlook for optometry practices remains challenging. Both practice owners and optometrists need to adapt by embracing transparency about financial realities and taking active roles in managing the practice’s sustainability. This requires difficult, but necessary conversations about wages, profitability, and the future direction of the business.

A successful practice today must be financially vigilant, operationally agile and lucid in its communication. By closely monitoring financial performance and making timely adjustments, practices can continue to thrive, even in challenging times.

We must not shy away from discussing finances. Open, honest conversations about money –within the practice and across the professional community – are key to ensuring that we can continue delivering the level of care patients expect while keeping the business on a sound financial footing.

Optometry, like many other healthcare sectors, is at a critical turning point. Rising costs, flat sales, and labour shortages demand that both business owners and professionals adapt to remain viable. By adopting a proactive approach to financial management and encouraging open dialogue about the economic realities of practice management, we can help the profession remain strong despite ongoing challenges.

About the author

Mehul Patel has been an optometrist for 17 years, and a Boots Opticians franchisee since 2012. He is an AOP Councillor representing directors of multiple practices.