Ever wonder if your patient volume truly reflects your earning potential? Revenue isn’t just a number for most private practitioners. It’s a roadmap that tells us how far we’ve come, what’s working, and where to adjust course.
Knowing how optometry practices make money is essential if you are new to owning a practice or want to improve your clinic. Understanding this will help you keep more of your earnings and build a successful business.
In this guide, we will look at how to measure your earnings. We will also understand key revenue sources. You will learn to find growth drivers and use financial strategies to grow your business.
Benchmarking Earnings: The National and Regional Landscape
Establishing earnings benchmarks can help us better determine revenue goals. Consider a few different numbers and explore how they might relate to your practice.
In 2023, the Review of Optometry reported that solo private practice optometrists earn an average of $212,251 annually. This average goes up for people with more than 31 years of experience. It drops sharply, by about $75,000, for those with less than 10 years Based on recent data, the average optometry practice with a single location and at least eight employees earns around $947,000 in annual revenue Based on recent data, the average optometry practice with a single location and at least eight employees earns around $947,000 in yearly revenue Based on recent data, the average optometry practice with a single location and at least eight employees earns around $947,000 in annual revenue.
Group practices and multi-doctor clinics can generate even higher income levels. According to recent data, the average optometry practice with a single location and at least 8 employees earns around $947,000 in annual revenue. The U.S. Bureau of Labor Statistics reports the 2024 median pay for optometrists as $134,830 annually.
Regional variations also play a large role in revenue. Urban practices benefit from higher patient volumes and more flexibility in pricing. Rural practices tend to face less competition but also deal with tighter margins.
Generally, the most striking regional difference remains between the West and the rest of the country. Western optometrists earn the lowest average salaries among all tracked regions, while the highest earners come from the South. A lot of this difference has to do with the cost of operation. Staffing tends to be more expensive, and retention rates are lower in the West than in other regions in the U.S.
Your Core Revenue Streams
When analyzing your practice against national and regional benchmarks, it is important to understand your core revenue streams. This can help you see where you might be losing money. This could be because you aren’t charging the right rates. It could also be because you aren’t offering important services that could make you money in your area.
Comprehensive Eye Exams
Routine eye exams are foundational, often billed using CPT codes like 92004 (new patients) and 92014 (established patients). Average fees for eye exams range from $75 to $200, depending on location and service scope. Generally, using insurance billing codes allows for higher reimbursements and a more diverse income stream.
Dispensed Products
Eyewear is still a massive revenue driver for optometrists. According to CareCredit’s 2019 Trend Report, products account for 54 percent of total gross revenue. Contact lenses, frames, and lenses make up a large part of the profit in this area. Overall, eyewear brings in 37 percent of the total revenue for the practice.
Medical Services & Procedures
High-margin services like OCT scans, dry-eye therapy, and claucoma monitoring are gaining traction as standard offerings. These services help boost revenue and support advanced patient care. Adding tools like a swept-source OCT enables diagnostic precision and enhances billable procedures.
Ancillary Income
When income from regular exams is steady, thinking about extra services and products can be useful. These can help you diversify your income. Don’t overlook revenue from vision therapy, specialty contact lenses, and retail add-ons like blue-light blockers.
Key Drivers of Top-Line Growth
As you analyze your income streams, it is important to consider how certain drivers will contribute to your growth. Let’s examine the key drivers of top-line growth and how you might use these to increase your practice’s profits.
Location & Demographics
Your patient mix will affect everything from service demand to pricing tolerances. Practices in younger, urban areas may see more contact lenses and fashion eyewear sales. Older, suburban populations may require more medical services and bifocals.
It is important to study your area’s demographics. This will help you find which products and services can make the most profit for your business.
Service Mix
A balanced mix of routine and advanced services boosts average revenue per patient. For example, you can bundle OCT scans into comprehensive exam packages to generate more income without increasing chair time.
Pricing Strategy
Tiered pricing models, membership plans, and bundled service packages can increase perceived value. These methods help patients choose higher-cost options. For example, offering a premium eye exam with advanced imaging helps position your services competitively.
Patient Volume & Retention
No-shows and gaps in your schedule hurt revenue. Investing in tools like online booking, automated reminders, and tele-optometry follow-ups can keep patients engaged and help fill your calendar regularly.
Crunching the Numbers: Revenue Scenarios
Now, let’s take a look at a few revenue scenarios to help you benchmark your practice further.
Startup vs. Established
Many new practices bring in $155,000 in the first year, depending on marketing, location, and service mix. By year ten, a thriving solo practice can grow to nearly $200,000 in revenue, especially with a strong product mix and loyal patient base. An optometrist with over twenty years of experience can earn nearly $250,000.
Solo vs. Multi-Doctor Models
Adding a second doctor helps spread overhead. Multi-doctor clinics can earn over $1 million in revenue, especially when they provide special services like vision therapy or advanced diagnostics.
The following are some revenue brackets to help you benchmark and set realistic revenue targets based on your clinic model:
- Low-performing: Under $300,000/year
- Mid-range: $500,000-750,000/year
- High-performing: $1M+ annually
Controlling Overhead: Turning Revenue into Profit
Finding ways to control overhead costs better is important for boosting practice profits. Let’s look at a few key areas where you can help manage these costs.
Staffing Costs
Labor is often a clinic’s biggest expense. A healthy staffing ratio is around 3.5 to 1 staff-to-OD, and payroll should stay around 20 to 25 percent of revenue. Training staff for multiple roles can increase efficiency and reduce idle time.
Facility Expenses
Rent and utilities typically account for 7 to 12 percent of expenses, depending on your market. Leasing equipment like OCTs and visual field analyzers can help reduce initial capital requirements.
Supply Management
Keep an eye on your optical inventory. Evaluate turnover rates and focus on higher-margin frame lines. Use data from your POS to identify your top-selling and highest-margin products.
Marketing & Admin
Administrative costs should remain lean. Automate appointment reminders, EMR tasks, and billing to help lower these costs. Every dollar spent on marketing should yield measurable ROI in new patient growth or optical sales. If you’re working with a marketing agency, request frequent reporting to ensure the best use of your spend.
Strategies to Boost Revenue without Burning Out
To boost your revenue further, look for areas where you can expand your practice without overextending yourself. The following are a few key ideas to consider implementing.
Expand Your Service Menu
Add one high-margin service this quarter. A dry-eye clinic, scleral lens fittings, or vision therapy can boost revenue and attract a new patient segment.
Optimize Retail Sales
Visual merchandising, staff incentives, and frame-styling consultations can increase your capture rate and average sale value. Even small tweaks, like creating trendy frame displays, can greatly impact your retail revenue.
Leverage Technology
Implement online booking, automated appointment reminders, tele-optometry, and patient portals to streamline operations and improve patient satisfaction. Technology can increase your reach without demanding additional staff time.
Enhance the Patient Experience
Consider launching a membership plan for uninsured patients. Offer perks like discounts on eye exams and eyewear for a flat monthly fee. Build loyalty with personalized follow-ups and birthday reminders.
Real-Life Case Studies
[Note for Client: This heading and subtopics were included in the prompt. However, I do not see these case studies listed anywhere on the website or in the references. Please provide further information on these case studies and we can expand this section.]
Case A: Rural Solo Practice — How focusing on eyewear increased annual revenue by 20%.
Case B: Urban Multi-Doctor Clinic — Using specialty services to expand into new patient segments.
Financial Planning & Forecasting
Once you understand revenue potential, it is time to build your financial strategy and forecast your revenue. Use the following tools to help create a roadmap for your practice.
Budgeting Basics
Set clear revenue targets and work to align your expenses to industry norms. For example, aim for staffing at 25 percent, rent at 7 percent, and marketing at no more than 5 percent of revenue.
Break-Even Analysis
Calculate how many patients you need to see monthly to cover your expenses. Tools like a simple spreadsheet or a cloud-based accounting tool can help you calculate these numbers and track them monthly.
Growth Projections
Outline a 3 to 5-year roadmap for your practice. What new services will you add? Will you hire additional ODs? Use this plan to guide equipment purchases and hiring decisions.
Turning Insights into Action
To increase profits in your private practice, understand your revenue streams, manage your overhead costs, and offer valuable services. If you do one thing after reading this, we suggest finding a high-margin service to add. You could also look for one way to improve your patient capture rate.
Don’t wait for year-end numbers to surprise you. Let your data guide you toward a thriving practice today.
Need equipment to expand your services or increase billables? Explore high-revenue tools at Saturn Optical.
Saturn Optical offers many products, including fundus cameras, auto lens meters, and swept-source OCTs. It also offers Spectral and Time-Domain OCTs, refractors, keratometers, and corneal topographers. Additionally, it provides wavefront aberrometers, vision screeners, and specular microscopes.
FAQs
What is the average annual revenue for a new optometry practice?
New practices often bring in around $155,000, depending on marketing, location, and service mix.
How much of total revenue typically comes from product sales versus services?
On average, 40-60 percent of total revenue comes from optical sales, which include frames and lenses. Exams and medical services make up the rest.
What are the most profitable add-on services to offer?
Aesthetic optometry services can be very profitable. These include Intense Pulse Light (IPL), Radiofrequency (RF), and Botox procedures. You can also add OCT imaging and vision therapy as options.
How can I accurately forecast revenue for the next fiscal year?
Use patient volume, revenue per patient, and overhead benchmarks to create a financial forecast for your practice. A simple break-even or cash flow spreadsheet can help visualize your projections.
What percentage of revenue should we allocate to overhead?
Industry benchmarks suggest total overhead should not exceed 60 percent. Good targets are 20-25 percent for staffing, 7 percent for rent, and 3 percent for marketing.
How often should I revisit pricing and fee structures?
A good rule of thumb is to revisit these structures annually. Review your CPT codes, competitors’ rates, and changes in insurance reimbursements to stay aligned with your specific market.
Additional Sources:
https://www.aao.org/eyenet/article/fact-sheet-for-the-comprehensive-eye-visit-codes
https://www.optometrytimes.com/view/increase-your-capture-rate-with-tiered-pricing
https://odsonfinance.com/methods-of-valuing-an-optometry-private-practice-a-comprehensive-guide/
