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IDOC actively shares industry-focused articles, blog posts, podcasts, videos and other thought leadership with our members and other optometric practitioners. Below, you will find links to our growing library of educational materials and multi-media assets written and created by IDOC's team of seasoned industry experts.
Dr. Steve Vargo | 8/5/2022
Recession Planning: What to Expect

As I type this, the news is dominated by concerns over the economy, including unease around inflation and a looming recession. This has practice owners understandably concerned and asking, “What should I expect, and how can I prepare?”

I’m not an economist, and I don’t have a crystal ball, but I think it’s helpful to look at past history to guide current decisions and expectations. While wild swings in the economy make people uneasy (especially when it’s trending downward), it’s easy to get caught up in the short-term and lose perspective of the long-term.

Look at the Past to Inform Your Future

We don’t have to go that far back in history to analyze the past. If you were practicing in the years 2007 to 2009, you practiced through what is now known as The Great Recession. The Great Recession was the most severe economic recession in the United States since the Great Depression of the 1930s. Certainly this was a challenging time for business owners, but fortunately for the optometric industry it wasn’t nearly as challenging as other industries. If your practice followed the trends, you most likely recovered and even thrived in the years that followed.

Don’t Be Ruled by Fear

Every practice is different and as a consultant, we take a lot of individual factors into consideration when offering guidance. Some short-term planning or adjustments are probably wise during these times, but don’t let fear of the short-term derail your long-term goals. When you look at the data below, there’s reason to be optimistic.

Recessions and the Optical Industry:

  • In the 5 years following The Great Recession, there was a net increase of 19.6 million eyewear and eyecare customers generating $3.8 billion in additional optical sales.
  • The U.S. optical industry aligns to the state of the general U.S. economy, but tends to be lagging and sheltered, which means that a slowdown in optical industry sales does not really start to occur until 4-6 months after any particular slowdown hits the general economy.
  • Early in a recession, consumers slow their spending on non-optical goods and services (clothing, electronics, entertainment, etc.) to a greater extent than optical products. Spending cuts on optical goods occur later in a recession.
  • In The Great Recession, sales declined in the optical industry, but those declines were not as drastic or as severe as what other industries experienced.
  • From 2007 to 2013, the number of exams at independents grew much more than chains (all non-independent).
    • The number of exams at independents increased by 8.0 million or 12.4 percent.
    • The number of exams at chains (all non-independents) increased by 0.3 million or 0.9 percent.
  • Only independents showed an increase in the average frame retail price between 2007 and 2013, while all other channels showed significant decreases.

Dig Deeper and Be Prepared

For a deeper dive into matters of the economy and a looming recession, tune into this podcast episode where IDOC CEO Dave Brown and I discuss what to expect and how to prepare for weathering inevitable economic downturns.

For tips on minimizing the impact of inflation on your practice, read this post by Nathan Hayes, IDOC’s Associate Director of Financial Services.

 

Sources:

Dr. Steve Vargo
Practice Management Consultant
Steve Vargo, OD, MBA is a 1998 graduate of Illinois College of Optometry. After working in a clinical optometric practice for several years, Dr. Vargo pursued his passion for practice management by earning his Master of Business Administration (MBA) degree from the University of Phoenix in 2008. A published author and speaker with 15 years of clinical experience, he serves as IDOC’s Optometric Practice Management Consultant and advises members in all areas of practice management and optometric office operations. Steve and his wife Melanie have two sons, Lucas and Ryan. In his spare time, he enjoys running, cycling, sports and music. A native Chicagoan, he is an avid fan of the Cubs, live music and deep-dish pizza.
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