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Levelling the playing field for independent optometry

aaron henry optometrist ProVision

With the largest network of practices in Australia, ProVision possesses significant buying power. But as CEO STEVEN JOHNSTON explains, it’s doing much more to ensure independent optometry can continue to flourish, especially amid a record trading period.

Whether independent practices are winning, losing or holding their ground in the face of intensifying corporate competition remains one of the most elusive questions in Australian optometry today.

It’s a conundrum the sector may never truly quantify, but with 450 fully-fledged independents within its network (the largest nationally), ProVision could arguably provide one of the most accurate barometers.

CEO Mr Steven Johnston isn’t one to base his opinions on anecdote and assumptions. Each year he tracks the retail sales of the same 210 practices to obtain a like-for-like comparison of performance. The numbers are in, and 2021 is undoubtedly going to be the strongest ProVision optometrists have seen.

Steven Johnston, ProVision.

“For the past six years we have seen like-for-like growth, except for fiscal year 2020 where we were heading for a great year until March and ended up dipping 2.7% compared to fiscal year 2019,” he says.

“Since then, for the year-to-date May 2021 we are up 19% on fiscal year 2020, so members have not only made up what they lost in the back quarter of last year, they’ve shot the lights out, and fiscal year 2021 is going to be the best that most members have ever had by a long way.”

Compared with 2019 – when market conditions were “normal” – retail sales in the 2021 financial year are around 16% stronger.

The success of ProVision members through COVID-19 can be tied to two factors. The first, Johnston says, is a greater propensity among consumers to shop local. This has played into the hands of independents who commonly populate community shopping strips or operate out of convenient standalone premises.

“We have been a great beneficiary of that shift,” he says. “The other aspect is a significant increase in the average transaction value of patients coming through practice.

“Because people have been unable to go on overseas holidays and the like, patients have more disposable income, so they are spending more on their eyewear than they were two years ago. When you put these two trends together, it compounds the dollars going through the practice.”

Johnston believes ProVision’s activities through the pandemic have also created greater adhesion between the organisation, its optometrists and product suppliers.

The volume of frames purchased through its ProSupply online ordering system have increased 46% year-on-year. With sales reps unable to visit practices for extended periods, more suppliers subscribed to the system that facilitates 24/7 ordering capability.

“I think we have come out the other side in better shape than we went in. I’m talking at a membership and ProVision level, and I will broaden that to suppliers, because by-and-large they are better versions of themselves than they were 15 months ago; they have had to adapt quickly to the changing circumstances.”

Discovering and creating efficiencies 

While much has changed in just 12 months, the fundamentals of operating a successful independent optometry business – and ProVision’s role in that – have remained constant.

Johnston is under no illusion the corporates have a distinct advantage when it comes to the operations of their practices and back-office support. ProVision exists to “level the playing field” by offering expertise, services, and tools across every business discipline that independents can use to run their practices just as efficiently.

“In the corporate world, they need to provide a return to investors, owners and franchisors. That’s completely different in the independent space where our members are driven by helping patients to have healthier eyes and better vision, but unfortunately don’t have the time to look for those efficiencies, so we need to find them on their behalf so they can provide fantastic clinical care to patients,” he says.

“That is why we have developed systems and technology to help practices with the fundamental business processes like recruiting staff, working out their exit strategy, dealing with invoices from suppliers – these are things that are done in a back office in corporates, but are done by the practice owner in our world.”

One of ProVision’s most successful platforms has been ProSupply, which is now in its eighth year and offers members access to the largest frames database in Australia, with over 24,000 products including more than 20,000 supply and fit options.

The organisation also recently released several new resources, including LaunchPro – for optometrists about to own or establish their first practice – and RecruitPro for staff recruitment, which will be detailed later in this article.

But Johnston is even more excited about ProAccounts2 because he says it has the potential to radically reduce manual data entry. Nearing the conclusion of development, the software will soon be piloted in three practices, with plans for a staged rollout before the end of the year.

To appreciate this technology, it’s important to understand the existing ProAccounts system first launched in 2020. It aimed to have all suppliers provide electronic invoices in a standardised format and on a more frequent basis.

With ProVision acting as the intermediary between practice and supplier, invoice consistency streamlined its own internal processes, and effectively allowed it to monitor purchases (and by extension sales) in real-time.

ProVision business coaches (from left) Kate Hall, Julius Maloney, Kelvin Bartholomeusz, Joanne Scott-Dostine, Karen Harmsen, Margarida Faustino, Glen Fickling, Jim Colley and Julie Hocking (absent: Tina Adel).

For practices, it meant statements and misplaced invoices could be accessed on-demand in an online portal, which also translated into fewer headaches for suppliers.

The new ProAccounts2 has been developed purely with the practice in mind. Johnston says the beauty of the system is that frame information can be downloaded into the practice management system, meaning staff at the practice don’t have to manually enter data for every frame introduced into their range.

“With ProAccounts2, information such as the supplier, brand, cost, dimensions, material, colour etc will be available electronically, the practice just needs to search for that item in their product file in ProSupply and download it into their practice management system,” he says.

“We estimate this is going to save an enormous amount of time, especially in busy practices doing this day in, day out.”

Currently, 10 out of ProVision’s 18 frame supplier partners are providing data of sufficient quality. Another quarter are expected to get over the line shortly, while the remainder require more work.

“Overall, we are in good shape, we could switch this on tomorrow and have 75% coverage of all product coming into the practice. By the time we release it, I’d like to think that number would be close to 80%,” Johnston says.

Rebrand on the horizon 

For more than 30 years, Johnston says ProVision has been helping optometrists – “both old school independents and new school entrepreneurs” – turn a passion for providing the best clinical care, into a successful business. From start-up to sell-up, it supports independents at each step with business coaches, innovative systems, contemporary marketing and buying power that comes with the largest network of practices in Australia.

Johnston says this multi-pronged approach is why the organisation will soon be reframing its brand to communicate that ProVision isn’t a buying group, but offers “success as a service”.

A recent example is RecruitPro, introduced earlier this year to help practices recruit staff. It advises employers that looking beyond the skillset is a better long-term strategy.

“If you don’t have the right people, it doesn’t matter how good your equipment, product range or optometrist is, it’s all wallpaper compared to how the patient is made to feel by people within the practice,” he explains.

“It’s been a journey to educate our constituents that it’s better to get someone with the right personality and train them on the hard skills later, and so RecruitPro is a workflow to help members understand exactly what they are looking for and go through the process of recruiting, questioning and selecting with that in mind.”

Elsewhere, ProVision has reinvigorated its Associate Membership program, reserved for early career optometrists considering ownership. It has existed for a decade – usually with around 10 members – but now comprises 50. It features practitioners working in various settings and companies.

“We are growing this at the rate of about five per month,” Johnston says. “This is because a lot of smart young optometrists realise if they want to have a fulfilling career it is probably in an independent practice where they get to call the shots. We have 50 folks who are ready, willing and able to take on a partnership or consider an outright purchase and I think it is a wonderful part of what we are doing.”

Associate members are also benefitting from another new ProVision-developed resource: LaunchPro. It is for optometrists looking to establish a greenfield practice or acquire an existing business, and features a 100-point checklist detailing each step and corresponding lead time, allowing them to follow an 18-week prioritised plan.

“It’s about ensuring they tick all those boxes and think everything through, all the way down to a budgeting template that we will then independently verify to ensure they are setting themselves up for success,” Johnston explains.

“And maybe they’ll get to the end and think it’s too hard to do it themselves. In that case we may be able to marry them up with someone in SuccessionPro who’s coming to the end of their career and wants to talk to someone who is just starting out.”

Canterbury Eyecare in Melbourne, part of the ProVision network.

More often than not, Johnston says optometrists looking to sell their business want to do so in a gradual fashion, rather than at the mercy of the open market.

Such considerations form part of its SuccessionPro program, which connects aspiring independent owners with mature operators before mapping an orderly transition of power, in a process that can take three to five years.

“If owners leave it too late, they narrow their options,” Johnston explains. “With SuccessionPro we are trying to make members aware of considerations such as leasing and practice fit out, and the approach that will work best for them.”

Increasingly, Johnston says older optometrists are concerned about the legacy of their practice, staff and continuity of care for patients. As such, succession planning should commence five to 10 years out from the desired selling date, which also allows room to gradually ease their workload.

“There’s a couple of key reasons, it’s unlikely you’ll find the right partner to take over your practice at the first attempt,” he says.

“And once you do, typically it is not going to be easy for them to find the cash you want. It takes some time to transition ownership from old to new, and we have seen this work best somewhere in the three to five- year timeframe, so you might actually need a couple of years before that to find the right partner.”

In any event, Johnston says that “genuine independent practices are absolutely thriving”.+

Editor’s note: This article as written before the extensive Greater Sydney lockdowns. 

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