What Optometry School Never Taught You About Running a Profitable Practice

Let me ask you something. When you graduated from optometry school, how prepared did you feel to run a business? Let alone be a profitable practice…

If you’re being honest — probably not very. And that’s not a knock on your education. It’s just the reality of how we’re trained. Four years of clinical preparation, almost none of it dedicated to P&L statements, vendor negotiations, inventory management, or cash flow strategy. Then we graduate, open or acquire a practice, and suddenly we’re business owners figuring it out in real time.

I was in that exact position. And what I’ve learned since — sometimes the hard way — has been worth more to my practice’s bottom line than anything I studied in school.

The Curriculum Gap Is Costing You Money

Here’s what I mean. Most independent optometry practices run their Cost of Goods Sold somewhere between 27% and 35%. That’s the industry norm — but it’s not the industry ceiling. With the right vendor relationships and a more intentional approach to how your optical operates, COGS of 18–22% is achievable. The difference on a $1 million practice isn’t small. We’re talking $50,000 to $130,000 in additional take-home income annually. Every year you run above that threshold is money left on the table.

Nobody taught us to think about it that way. Nobody handed us a benchmark and said, “Here’s where you are, here’s where you could be, and here’s how to close the gap.”

Three Things I Wish I’d Known Earlier

1. Vendor invoices are rarely perfect — and nobody is checking. It shocks me how often I talk to owner ODs who have no reconciliation process in place for vendor invoices. Ophthalmic lens vendors are not known for precision when it comes to charging correctly or applying credits for remakes and second-pair discounts. I personally had a single vendor that owed me nearly $6,000 in overcharges and missed credits over just six months. That’s one vendor. One six-month period. Assigning a staff member to monthly invoice reconciliation will more than pay for their time.

2. Frame board inventory risk doesn’t have to be yours to carry. The traditional model puts all the financial risk on the practice — buy the frames, stock the board, hope they sell. If they don’t move, that’s your capital sitting on a display. There’s a fundamentally different approach available now: frame vendors stock your boards at no cost, and you only pay when a frame sells. Shipping to partner labs is covered. Your cash flow improves immediately. Your staff spends less time managing inventory. This model exists — and more independent practices should be running on it.

3. Buying power isn’t exclusive to corporate groups. Independent ODs have historically accepted that large retail chains and private equity-backed groups get better pricing simply because of their volume. That’s true — unless you have access to a group purchasing organization that pools buying power across independent practices. The right GPO gives you competitive pricing on frames and lenses without membership fees, without royalties, and without asking you to give up control of your practice.

The Bottom Line to having a Profitable Practice

Optometry school prepared us to take care of patients exceptionally well. The business side of practice ownership is a different skill set entirely — one most of us have had to develop on our own, through trial and error, and often at a real cost to our profitability.

The good news is the information exists. The systems exist. The partnerships exist. You don’t have to keep running your practice on the same model you inherited because nobody showed you there was a better one.

If you want to see what a more optimized optical actually looks like — with real numbers — I’d encourage you to start that conversation.

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Ryan Hiesterman, OD, VP Professional Development, Partners in Profit ryan@pipgpo.com | pipgpo.com