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HomemibusinessPlanning Equipment Acquisitions into the New Year

Planning Equipment Acquisitions into the New Year

As we near the end of the financial year, it’s important to take stock of past equipment purchases and make strategic decisions for future investments.

It is not news to any of you that sourcing the equipment needed for an eye care practice is a big decision and a significant investment. During my short time in the industry, I have become aware of the ample specific product information available on websites and the many knowledgeable supplier representatives willing to assist with great solutions. Given this, instead of discussing equipment options, I will attempt to harness the often ignored, but all important, business considerations when embarking on equipment investments. I feel we can all benefit by taking a more strategic approach when we feel under pressure when making big business decisions.

Whether refreshing equipment or starting your own new independent practice, try and be proactive in these planning processes

BUDGETING

The end of the financial year is a good time to review practice performance over the past 12 months, both financially and from the perspective of customer service.

Are you being held back competitively due to equipment? Is any equipment coming to the end of its life in the coming year or two?

With this in mind, are your forward equipment budgets adequate to effect the change needed? Would it make tax sense to make a forward planned equipment purchase now? And, what budgeting period(s) will the cost or amortisation of the new equipment be applied to?

Whether refreshing equipment or opening a new independent practice, try to be proactive in your planning processes. Seeking information at live events, where the equipment is being demonstrated, and talking to suppliers about bundling options, will mean you’re well informed in advance.

“When opening a new practice, practitioners often focus on the initial outlay cost,” said Mark Stapleton, Essilor Instruments Manager for OptiMed. “It is great to suggest solutions for them, such as bundling equipment purchases with lens purchases. This simple process can assist the new practice with repayments on equipment they are considering purchasing or that they thought out of reach.”

Always check on tax write-offs available as well. For instance, announced as part of the Federal Government’s pandemic relief, businesses with an aggregated annual turnover of less than AU$5 billion qualify to deduct the full cost of depreciable assets in the first year of installation. This initiative, originally due to expire at the end of this financial year, has now been extended to include the 2022-23 financial year.

WHAT IS ESSENTIAL?

While few will argue that practices definitely need a rotating stand and chair, slit lamp and field analyser, the essential list will differ for each business and change over time – it’s about finding the specific solution for you, having considered the costs and benefits.

Jarrod Power, Associate Product Manager, Device Technologies, informed me, “We don’t tend to advise our customers of the minimum they need. While there are some non-negotiables when starting a clinic/practice/store, we often look at a good, better, best situation. I’ve said this in Queensland University of Technology Optometry School business workshops for the last few years and it’s particularly relevant in independent optometry; it all comes down to the business plan.”

Among those ‘better’ and ‘best’ solutions are more strategic items that will improve processes and efficiency, and even offer immediate returns, such as an optical coherence tomographer (OCT).

“One of the great things about assisting practitioners opening a new practice is conveying my knowledge and experience of the equipment I sell to best assist them in finding an effective solution for their new practice,” said John Larkin, National Instrument Product Manager, OptiMed. “Assistance may be as simple as suggesting equipment types and layout in their practice to create an effective workflow. It could also be suggesting a certain type of instrument to give them an edge, such as a revenue effective device like an OCT.”

Optos informed me that their optomap, which non-invasively captures an instantaneous, ultra-widefield digital image of the retina, has become an essential piece of equipment in many successful practices.

Jason Martone, Managing Director at Optos Australia, stated that “having the ability to quickly capture 82% of the functional retina in a single capture has allowed our customers to better diagnose pathology and has enhanced their patients’ experience and retention… it is enabling practitioners to spend more time diagnosing and educating rather than gathering information.”

Yvette Barnes, Equipment Manager at Zeiss, agreed. “People are visual and enjoy being educated,” she said, adding that in her experience, patients who are better informed have a greater understanding of the benefits of investing in the best vision possible. This often results in the practice seeing an increased average revenue per client.

Selecting dispensing tools and technology with higher levels of accuracy will also bring a return on investment through increased patient satisfaction, and reduced returns and remakes.

THE BUSINESS SIDE OF THE EQUATION

Of course, do not forget the investment required in customer service and general business systems, such as websites, security, HICAPs terminals and eftpos facilities. The trend towards contact-less payments and online shopping experiences has only intensified during and post COVID-19 lockdowns, which is demanding significant and ongoing investment.

A good example here is Zeiss Virtual Tryon @Home – part of the Zeiss VISUFIT 1000 platform, which makes it convenient for consumers to virtually browse and try on a frame selection, handpicked by their own eye care professional, from the comfort of home.

Ms Barnes says ensuring you have a very stable network is an important consideration as well. She suggests putting an extender in the ceiling in the middle of the practice for a stronger connection, and having wall network ports placed for future additions to reduce floor cables and keep the practice neat and safe.

Also consider how certain equipment can attract new customers, ensure higher levels of repeat customers, and result in higher asset utilisation and overall return, as opposed to what a cheaper option may provide. Is there one piece of equipment that can do the work of several and save floor space?

For example, deciding on a clinical area in which to focus could lead to investments in specific equipment, such as a corneal topographer or myopia management system. These decisions require some research into the target demographic, and your ability to reach them, as well as considering what the larger optical chains and other competitors in the local area are or are not offering. You should also consider the impacts on workflow and required conversion rates and whether the investment will provide additional revenue opportunities.

Consideration also needs to be given to the data you will be collecting and whether it makes strategic sense to combine it all into one software application or platform for diagnostics collation.

Zeiss, for instance, offers the Zeiss VISU360 platform which networks all diagnostic information from devices and eye examinations, from retina screening to consultation and medical prescription. It also connects health professionals – including doctors, optometrists and ophthalmologists – with their patients via remote access. This could potentially open revenue opportunities beyond the walls of your practice.

SEEK ADVICE

In my opinion, we need to view our supplier representatives as partners rather than as salespeople. They are there to add value to the practice and help advise on ways to improve the client journey.

Reach out to your representatives for advice, software, training and general tips on how to get the most from the equipment you already have. They are keen to work with you for the long haul so use your relationships to help with your forward planning.

As Mr Power told me, “We’re here to help, and there is no such thing as a silly question.” Indeed, Device Technologies, along with other companies, has experienced teams servicing each state who are happy to offer recommendations to find the best suited equipment for your situation. “We consider everything from business focus, clinic geography and client characteristics, through to the requirements from the clinician,” Mr Power said.

And, of course, I wouldn’t be doing my job if I didn’t recommend that everyone attend live trade fairs, such as O-Show and O=MEGA, to explore equipment and enjoy live demos in an environment focused on showcasing the latest and greatest in optical equipment.

THE STRATEGIC APPROACH

The good news is that statistics show, while there was somewhat of a plateau in growth in the Australian population in 2021, there was no slowing in the growth of people entering the 45+ age group – the main market for prescriptive eyewear.

To make the most of this opportunity, it’s essential to plan ahead, especially as one decision has many potential flow-on benefits… and remember, as the saying goes, ‘you need to spend money to make money’.

Amanda Trotman is General Manager and Acting CEO of the Optical Distributors and Manufacturers Association. Prior roles have included in-house events manager for a global IT company, founder and Managing Director of her own event management agency, General Manager of a national real estate training events business, Business Development Manager for a disability provider and Executive Director of a trade association. 

Tips from Practice

I asked optometrist Wilson Luu from Lumiere Eyecare in Wentworth Point, New South Wales, to provide his advice, as a practitioner, on equipment acquisition.

TIP 1: BUDGET

Determine your budget before making any purchases. A key point is working and buying within your means. Have a list of your needs for your practice and put them in order of preference. Some instruments have features which overlap with others. If you start from the instruments that you must have, followed by instruments that you want, you can ensure you are purchasing enough for your practice without going overboard.

TIP 2: RESEARCH

When buying instruments for your practice, look at what has been studied. Are there any research articles that have been published using the instrument you are thinking of purchasing? Any published articles will help with troubleshooting, identifying additional features, and accuracy in outputs. They will also allow you to promote your business as one that practises evidence-based practice and they will provide resources for comparing your clinical results.

TIP 3: COMPETE

Keeping up with technology will allow independent practices to compete in a constantly growing industry and market. In this sense, an OCT is essentially requisite for independent practices.