True knowledge exists in knowing that you know nothing” – Socrates
As a graduate, you probably feature in the top 10% intellectually in the world. Yet, there is so much we don't know about the world we live in. Do I know how a light bulb is made? How does WIFI work? What are the most significant contributors to climate change?
In our general sphere of existence, there is the stuff we know, such as reading and writing, and there is the stuff we know we don’t know, such as perhaps doing a tonsillectomy or flying an aeroplane, but then there is the stuff we don’t know we don’t know. This is the stuff that can hurt us badly in business.
For example, gross profit percentage. You have heard of it, but you don’t know the many factors that can affect GP%. These are the factors you should be controlling because they can erode your net profit. If we don’t know what it is and can’t measure it, we can’t manage it. We won’t realise that it is one of the things in business that poses a very big threat to profitability. For example, factors that influence the gross profit percentage can only be managed by those working in the practice, not by the bookkeeper or auditor who reports on what has happened in the business. But this does not only apply to the GP%. Many elements in a business can fall into this category. Some are listed below.
What you don’t know you don’t know
- What is my GP%?
- What percentage of net profit did I make last year?
- What turnover am I going to make this month?
- What is my rent as a percentage of turnover?
- How much stock do I carry right now?
- What are my expenses as a percentage of turnover?
- What is the value of my average invoice?
There is a tendency among healthcare professionals to shirk responsibility for the business's financial management. If one shies away from it, one increases the odds of having many issues one doesn't know about. I am not suggesting that every optometrist should also be a hands-on financial manager, BUT you should at the very least, in terms of the business, be in the category of “I know I don’t know.” Then at least you know about the potential dangers lurking that can vaporise your net profit right under your nose. The key to taking control of your practice's financial well-being is to have the right information at the right time, in a format you, as a clinician, can relate to. This is what Humint Online Software for Optometry can do for you.