Now that you have decided to pursue vision therapy (or any specialty!) you have to buckle down and start the hard part of actually creating the business. Depending on what your current employment situation is you may be opening a vision therapy only practice, incorporating a vision therapy department into an already existing practice or revamping an existing department that isn’t as successful as it should be. Regardless of where you are starting, an essential part of making your venture a success is having a plan.
Failing to plan, is a plan to fail! – Alan Lankein
Let’s take this one step at a time…. Here we go..
1) What kind of vision therapy practice would you like to build?
This is perhaps the most important step of the whole process.
You can’t create a successful business if you don’t know where you want that business to end up. As much of a tongue twister that is, you need to have a goal in mind. Shoot for the stars on this one. If you want a 10,000 sq ft. space with a luxury vision therapy suite with all of the best equipment, running VT sessions fives days a week, that is what you should aspire to. Don’t sell yourself short.
Throughout my residency, my supervisors encouraged me to have role models for each aspect of my life: fitness role models, relationship role models and optometry role models. Having these roles models helped me figure out what I wanted. By visiting and communicating with all different types of vision therapy practices, I was able to pull pieces from each one and decide which aspects were the most successful. From there, I created a mission statement for my practice that laid out exactly what I wanted my business to be and how to achieve that.
To get familiar with other offices you can call practices to speak with doctors, set up visits or attend the annual COVD meeting. At the meeting, you have the most successful doctors all in one place, willing to share exactly what makes their practices stand out. For COVD, the next annual meeting is scheduled for April 14th – 18th in Las Vegas, NV. Click here for more information about this COVD meeting.
2) Start-up costs: The $10,000 vision therapy practice
Okay, we got the hard part out of the way, which is figuring out what we want. Now we have to figure out how to get there.
As part of my residency, Dr. Tannen helped me figure out what the bare minimums I would need to start a vision therapy clinic. We figured out that we could get things going with just about $10,000. Now I know this may seem like a lot at first, but in the grand scheme of things it is quite affordable.
We broke down items into evaluation necessities, suggested vision therapy stations and equipment needed and any cost of space materials. The picture below shows the equipment and diagnostic tools I needed to get things started.
I should mention that in my own business proposal I added in a ‘wish list’ of items that I plan on purchasing as the business grows. This helps me stay focused on what equipment I really need vs. the equipment that I just want.
| BASIC THERAPY EQUIPMENT | |
|---|---|
| Equipment | Price |
| Eye Patches (12) | $14.25 |
| Stereo Glasses (6) | $38.50 |
| Red/Green Glasses (6) | $23.95 |
| Brock String (12) | $25.50 |
| Eccentric Circles (10 Clear) | $42.50 |
| Bernell O-Scope/ Cards | $349.00 |
| Vectograms (2) | $285.90 |
| Aperture Rule | $39.95 |
| Plus/Minus Flippers (6) | $117.95 |
| Prism training flippers | $314.95 |
| Prism Training Glasses | $26.25 |
| Rotation Trainer + Tees | $103.20 |
| Marsden Balls | $19.95 |
| Red/Green Anti-Suppression Chart | $1.69 |
| Red/Green Bar Reader | $8.95 |
| Sherman Cards | $17.95 |
| Parquetry Blocks | $27.95 |
| Geoboard x 3+ Rubber Bands | $25.00 |
| Perceptual Workbooks | $75.00 |
| Matrix Cubes | $489.95 |
| HTS Computer Program (patient maintenance) | $59.95 |
| Slant Boards (2) | $109.00 |
| Green/Red Pick up Sticks | $10.95 |
| PTS2 Computer Program (patient maintenance) | $59.95 |
| Amblyopia INET (patient maintenance) | $59.95 |
| Vision Builder (office use only) | $175.00 |
| Total Expenses (estimated) | $2,523.14 |
| SUGGESTED DIAGNOSTIC EQUPMENT | |
| Equipment | Price |
| Developmental Eye Movement Test | $46.50 |
| Berry Visual Motor Integration Test & Score Sheet | $203.90 |
| Test of Visual Perceptual Skills | $149.95 |
| Gardner Reversal Frequency Test | $59.95 |
| Test of Silent Word Reading Fluency | $156.00 |
| Dyslexia Determination Kit | $139.50 |
| Visagraph | $2,900.00 |
| WIAT II | $75.00 |
| Primary Mental Abilities | $79.95 |
| Total Expenses (estimated) | $3,810.75 |
| Additional Expenses, Cabinets, Counters, etc | $4,000.00 |
| MINIMUM SUGGESTED VT START UP COSTS | $10,333.89 |
3) How to calculate potential revenue, expenses, and profit
Potential Revenue:
For this, you have to look at what your examination fees would be, how much you want to collect per vision therapy session, how many evaluations you have scheduled a month, what your projected capture rate will be and the average number of sessions each vision therapy case will have.
A few things before we work out an example:
- For any vision therapy workup, it is common practice to bill an exam code and a sensorimotor evaluation. Depending on the patient you may also want to perform a complete perceptual evaluation. If so, this is an up front expense to the patient because insurance companies deem this as ‘educational’ and therefore not covered. The theoretical number you see here is the cost of the perceptual exam (lets say $250) and then the cost of the exam/sensorimotor portion. Reimbursement for exam/sensorimotor may be different for each insurance, but we will tackle the ‘insurance vs no insurance’ in a later article.
- I used 11 months to calculate number of evaluations to account for any vacation time/holidays/etc.
- The 80% capture rate was recommended by Dr. Tannen and his many years of working in this speciality.
Example:
| Exam Fee and Perceptual Evaluation Cost Collected | $400 |
|---|---|
| Vision Therapy Fee per Session Collected | $125 |
| 55 Vision Therapy Evaluations (~5 Evals/Month) | $22,000 |
| 80% Capture Rate | 44 Patients |
| Number of Sessions/Patient (24) = 1,056 Total Sessions 1,056 session x $125/session | $132,000 |
| TOTAL REVENUE | $154,000 |
Expenses:
Another theoretical table to help you account for therapist , equipment replacement, office supplies, some sort of ‘rent’ or utilities for the space that you are using, related staff expenses and how much YOU cost 🙂
| Therapist Pay (2) – 5 Hours/Week (Assume $15/Hour Salary) | $7,500 |
|---|---|
| Equipment Replacement | $1,000 |
| Office Supplies | $1,000 |
| Pro-rated rent/utilities for space used for vision therapy (assume 200 sq. ft x $25/sq. ft) | $5,000 |
| Related staff expense (receptionist, insurance billing, etc-assume 10 hours per week at $15/hour) | $7,500 |
| OD expense (.33FTE devoted to VT practice) | $30,000 |
| TOTAL EXPENSES | $52,000 |
Profit = Revenue - Expenses
| Revenue | $154,000 |
|---|---|
| Expenses | $52,000 |
| PROFIT AFTER YEAR 1 | $102,000 |
I repeated this process for the next three years to project out exactly what the potential profit could be. Each year the number of evaluations and VT sessions increase, with most of the expenses growing with the practice and increases in your salary.
Here are my Years 2 & 3:
| Binocular and Perceptual Evaluation Fee Collected | $400 |
|---|---|
| Vision Therapy Fee per Session Collected | $125 |
| 88 Vision Therapy Evaluations (~8 Evals/Month) | $35,200 |
| 80% Attendance | 70 Patients |
| Number of Sessions/Patient (24) = 1680 Total Sessions | $210,000 |
| TOTAL REVENUE | $245,200 |
Year 2: Expenses
| Therapist Pay (2) – 10 Hours/Week (Assume $15/Hour Salary) | $15,000 |
|---|---|
| Equipment Replacement | $1,000 |
| Office Supplies | $1,000 |
| Pro-rated rent/utilities for space used for vision therapy (assume 200 sq. ft x $25/sq. ft) | $5,000 |
| Related staff expense (receptionist, insurance billing, etc-assume 20 hours per week at $15/hour) | $15,000 |
| OD expense (.5FTE devoted to VT practice) | $50,000 |
| TOTAL EXPENSES | $87,000 |
Year 2: Profit
| Revenue | $245,200 |
|---|---|
| Expenses | $87,000 |
| PROFIT AFTER YEAR 2 | $158,200 |
Year 3: Revenue
| Binocular and Perceptual Evaluation Fee Collected | $400 |
|---|---|
| Vision Therapy Fee per Session Collected | $125 |
| 110 Vision Therapy Evaluations (~10 Evals/Month) | $44,000 |
| 80% Attendance | 88 Patients |
| Number of Sessions/Patient (24) = 2,112 Total Sessions | $264,000 |
| TOTAL REVENUE | $308,000 |
Year 3: Expenses
| Therapist Pay (2) – 15 Hours/Week (Assume $15/Hour Salary) | $22,500 |
|---|---|
| Equipment Replacement | $1,000 |
| Office Supplies | $1,000 |
| Pro-rated rent/utilities for space used for vision therapy (assume 200 sq. ft x $25/sq. ft) | $5,000 |
| Related staff expense (receptionist, insurance billing, etc-assume 30 hours per week at $15/hour) | $22,500 |
| OD expense (.7FTE devoted to VT practice) | $70,000 |
| TOTAL EXPENSES | $122,000 |
Year 3: Profit
| Revenue | $308,000 |
|---|---|
| Expenses | $122,000 |
| PROFIT | $186,000 |
