That said, running an optometry practice can still be challenging, as the costs, competitive landscape, and return-on-investment vary widely based on your location and business strategy.
In this guide, My Solutions InSight breaks down the crucial dos and don’ts of starting an eye care practice in 2023, helping you gain an edge over the competition and avoid the most common optometry start-up mistakes.
How Competitive is the Eye Care Market in the US?
If you’re planning to open an optometry practice, the first question you’d want to know is how big the eye care market is, and how competitive it is.
As of 2023, estimates of the size of the US eye care market vary widely, ranging from $22.8 billion to $83.7 billion, but all sources are in agreement that the market will continue to grow at about 3.2 – 7.3 percent per year, over the next ten years. 4-7
But honestly, market size figures are of somewhat limited utility in helping you understand how competitive an industry is, especially when such large numbers are involved. (Who has actually ever seen a billion dollars to even visualize what that looks like?)
A more useful statistic is to look at the ratio of people to optometrists, or alternatively, the number of optometrists per thousand people.
The chart below shows the ratio of people to optometrists across all US states.
Effectively, 7,164 people per optometrist works out to an average potential of 27.5 patients per day, assuming a five-day week, through 52 weeks of the year. In states such as Louisiana and Tennessee, this can be as high as 70 potential patients per day, given their much smaller optometrist per capita figures.
Of course, that’s only a theoretical average.
In reality, not every single person visits an optometrist, even though they ought to, and they certainly don’t do so every year. In big cities, factors like location also matter; all else being equal, people visit the closest O.D, meaning that the population density of a clinic’s neighborhood matters more than the city’s overall population.
Also, the distribution of patients across practices is not even; patients visit the optometrists they know about and remember. When it comes to brand awareness and brand recall, it’s often a winner-take-all game. The practice that is most well-recognized wins more patients than any other practice.
On the plus side, this means that a smart practice can win twice or even ten times as many patients as the average — with the right strategy and execution. So, while there is plenty of demand for optometrists in the US, choosing the right location, implementing a well-reasoned business plan, and building a strong brand to differentiate from competitors, are three critical factors for the success of any eye care practice.
(And by the way, outperforming the competition by 10X is not just a hypothetical. It’s something we actually help clients achieve.)
Starting an Optometry Practice From Scratch
Possibly the #1 question we get in our interactions with optometry students and freshly minted ODs, is “How do I cold-start an optometry practice?”
There are six key aspects to starting an eye care practice:
- Location
- Business plan and financing
- Equipment
- Inventory
- Staffing
- Marketing
Each of these topics merits its own guide (we promise, we’re working on publishing these soon — get on our mailing list to stay updated and get access to free planning and business intelligence tools), but for now, let’s review what NOT to do when starting your optometry practice
The Most Common Optometry Startup Mistakes
Poor Market Research
Solid market research is a prerequisite for any good business plan. Done correctly, market research is the key to accurate assessments of demand, pricing, and competitive differentiation. Here are the key questions to ask and answer to ensure that your market research is thorough:
- What are the current trends and challenges in the optometry industry? How is the demand for eye care services changing?
- Who are your direct and indirect competitors? How many are there in your area and what are their sizes, locations, and specialties?
- What are your competitors’ strengths and weaknesses?
- What are their products and services?
- What does their product, pricing, and promotion strategy look like?
- How do they perform in terms of quality, customer service, reputation, and innovation?
- How have they responded to recent changes in the market, technology, regulations, and customer preferences?
- What is their positioning or USP? How do they differentiate themselves from other practices?
- What are their customer segments? Who are they primarily targeting?
- What are their marketing strategies? How do they attract, convert, and retain customers?
- What are their partnerships? Who are their suppliers, distributors, and collaborators?
Inadequate Business Planning
As the blueprint that covers all aspects of the business, including marketing, operations, finance, and staffing, a well-crafted business plan is critical to the success of any new optometry practice. But many new ODs either ignore or underestimate its importance, undermining their chances of success.
The biggest planning mistake is underestimating the amount of capital required to start and sustain their practice, leading to financial difficulties in the early stages. Be sure to account for the lease or purchase of equipment and office space, as well as staff salaries and marketing expenses in your financial planning. Keep in mind that cash flow is just as important as overall revenue.
Lastly, legal and regulatory compliance is a critical part of business planning. Neglecting this can lead to fines, penalties, and legal action, which can have negative, sometimes dire consequences for your business and reputation.
Ineffective Branding and Marketing
“If you build it, they will come”, is probably the biggest lie in the history of business. Getting patients through the door is a matter of marketing, especially for new practices. Having a professional-looking website and social media presence are the most basic elements of branding.
If you don’t have deep knowledge of copywriting and graphic design, attempting to DIY all of your brand assets is unlikely to yield great results. You can inexpensively hire highly-rated professionals on marketplaces like Fiverr, but make sure you educate yourself enough to at least be able to objectively evaluate the work they deliver (not just subjective, “I like the color on this logo” type choices.)
The next step is to put together an effective marketing strategy. Stay tuned for our helpful guide on marketing for optometrists, for a complete breakdown of the secrets to marketing that actually works. In the meantime, be sure to check out our latest blog 21 Proven Ways to Grow Your Optometry Practice.
Having done the market research will help you make better branding and marketing choices.
Overextending the Business
Trying to do too much too soon is also a common mistake among new optometry practices. This leads to spreading your resources too thin, overextension, and burnout. It’s important to pace oneself and prioritize tasks based on their impact.
Follow the 80-20 rule. In the early days, focus primarily on patient experience and marketing. You need good marketing to get patients, but if a patient has a mediocre or poor experience, your marketing investment is almost a complete waste, as you’re unlikely to gain referrals, get them back as a returning customer, and might also get bad reviews.
Dos and Don’ts When Starting a New Optometry Practice
Here’s a checklist of best practices for cold-starting an optometry practice:
Do:
- Choose a good location for your practice, ideally in an area with high foot traffic, easy accessibility, and sufficient parking.
- Run comparative calculations on the impact of the cost of office space on your profitability (real estate can be expensive).
- Segment your audience to identify needs and preferences that can help differentiate your services.
- Establish relationships with local healthcare providers, such as primary care physicians and ophthalmologists, to receive referrals and collaborate on patient care.
Don’t:
- Choose a location purely based on cost; the disadvantages of a location that’s too far or hard to access can be hard to overcome even with marketing.
- Overestimate the demand for your services or underestimate the competition in the area.
- Skimp on essential equipment and technology to save money.
- Attempt to do everything yourself or avoid delegating tasks and seeking professional advice when needed.
- Underestimate the importance of maintaining accurate and organized patient records and managing cash flow.
- Ignore the potential of telehealth services and other technological advancements to improve patient care and access.
- Forget to prioritize work-life balance or neglect your own physical and mental health to get burnt out.
How to Differentiate an Optometry Practice (Without Adding Cost)
Getting your appointments calendar fully booked can be challenging when you’re new, and don’t yet have a well-recognized brand or a steady stream of word-of-mouth referrals. It’s important to give customers a reason to choose your practice over the others, but generic claims don’t really resonate with people (everyone claims to “really care”, offer “better service”, and be “world class”, for instance).
On the other hand, building genuine differentiation can quickly become expensive and wasteful, if not done right (offering free champagne to all your customers will likely bring lots of customers, but it might also put you in the red or land you in trouble with the law).
Here are great ways to make your new optometry practice stand out and set yourself a class apart from the rest without burning through your checkbook:
Specialize in a Niche
Focusing on a specific area of optometry, such as sports vision, pediatric vision, or vision for specific industries (such as assembly line workers, for instance), can help your practice stand out and attract patients seeking specialized services.
The in-clinic experience is not the only model that exists. You could consider offering premium services such as in-home eye exams, or personalized consultations for high-end clients. You might also consider offering virtual services, if they’re allowed in your geography. FDA-approved online vision tests, and teleconsultations can increase revenue without additional overheads.
Innovate on Pricing
Explore the possibility of offering a monthly or annual subscription model. This can provide patients with a predictable and affordable way to access vision care and can help the practice build a loyal patient base. This is particularly useful to professionals who are likely to need routine tests as part of their job.
Offering a “price match” guarantee could be another strong differentiation that helps you convert price-sensitive patients and remain competitive with other practices.
Other financing options like payment plans or deferred interest can help patients afford higher-cost services or products that may not be covered by insurance. Here are two routes to offer your customers these options:
- In-house financing: Finance patients directly through a simple payment plan agreement, credit cards, or by setting up a revolving credit line.
- Third-party financing: Partner with third-party financing companies like CareCredit or Wells Fargo Health Advantage. These companies offer financing options to patients, while you get paid directly for the services you provide.
Remember to carefully compare the costs and benefits of offering financing options and be careful to comply with applicable laws and regulations, including consumer protection laws and regulations governing credit and lending.
Invest Time on Inventory Optimization
Staying abreast of trends, forecasting demand, ordering inventory in smaller quantities, and maintaining lean inventory levels can all help reduce your inventory carrying costs while still providing a diverse range of products.
The average optometrist in the US carries 350 to 400 frames, but the optimal mix and range depends on your location, target customers, and competition. A practice serving mainly business executives will likely need a different inventory mix versus one serving kids or elderly patients.
Using technology like AR and VR can also help upsell without inflating inventory costs. Software tools are also essential to monitor turnover rates, and eliminate slow-moving styles to optimize your portfolio.
Host Community Events
Hosting events such as free vision screenings, informational seminars on eye health, or charity events is a particularly effective way of building not just your business, but also your networks and community relationships. This is especially useful in the early days of starting your practice, when you might have the time to invest in such events.
Sources
- Optometrists Occupational Employment and Wage Statistics. (n.d.). U.S. Bureau of Labor Statistics. Retrieved March 28, 2023, from https://www.bls.gov/oes/current/oes291041.htm
- American Optometric Association. (2018). County Data Demonstrates Eye Care Access Nationwide. In American Optometric Association. Retrieved March 28, 2023, from https://www.aoa.org/AOA/Documents/Advocacy/HPI/County%20Data%20Demonstrates%20Eye%20Care%20Access%20Nationwide.pdf
- Burden of Vision Loss | CDC. (n.d.). Retrieved March 28, 2023, from https://www.cdc.gov/visionhealth/risk/burden.htm
- North America Vision Care Market Size, Industry Trends 202-2027. (n.d.). Retrieved March 28, 2023, from https://www.imarcgroup.com/north-america-vision-care-market
- Vision Care Market. (n.d.). Retrieved March 28, 2023, from https://www.futuremarketinsights.com/reports/vision-care-products-market
- Eye Care Market Size, Share, Trends, By Product (Intraocular Lens, Eyeglasses, Contact Lenses), By Treatment (Surgery, Laser Therapy, Medication), By Distribution Channel (Hospitals and Clinics, Retail Stores, Online), By Region Forecast to 2030. (n.d.). Reports and Data, 2019. Retrieved March 28, 2023, from https://www.reportsanddata.com/report-detail/eye-care-market
- TechsciResearch pvt ltd. (n.d.). Global Eye Care Market Size, Share, Growth, Trend & Eye Care Market Forecast 2026. Retrieved March 28, 2023, from https://www.techsciresearch.com/report/eye-care-market/4879.html
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