This document discusses calculating chair cost and net income for an optometry practice. It defines chair cost as the costs associated with providing patient care. It provides an equation for calculating chair cost by subtracting operating expenses from fixed costs and dividing the result by the annual number of patient visits. The document also gives an example of how to determine net income per hour by subtracting the calculated chair cost per hour from the provider's revenue per hour. Finally, it emphasizes evaluating the three P's of patients, product, and profits for the practice.

1. Chair Cost Survival
Steven Sunder, BS
Sunder Vision Solutions

2. AGENDA
Objective
What is Chair Cost
Calculation of Chair Cost
Net Income

3. OBJECTIVE
Chair Cost…do I need to understand
it?
How do I calculate and measure my
Chair Cost?
What is my net income per hour?

5. CHAIR COST
Chair Cost represents the “costs”
associated with providing care.

6. CHAIR COST
“Be first and you will automatically be
different. If you can hang in there and fight
off the imitators, you will be very
successful.”

7. CHAIR COST
How do I calculate and measure my
Chair Cost?

8. CHAIR COST
How do I calculate and measure my
Chair Cost?

9. CHAIR COST
The Equation
1. Subtract out your fixed costs assuming operating expense of 45%.
$220,000Fixed costs
-$180,000Operating Expense @ 45%
$400,000Practice gross income
Annualized actual revenue generating visits = 4160
2. Figure your “actual” patient visits per year.

10. CHAIR COST
The Equation
3. Divide your fixed costs by annualized patient
revenue visits.
Fixed costs visits Chair Cost
$220,000 / 4160 = $52.88

11. CHAIR COST
Determining Net Income
Provider Revenue per hour – Chair Costs = Net
Income p/hour
Provider Revenue per hour Chair Costs p/hr Net Income p/hour
$192.30 - $105.76 = $86.54

12. CHAIR COST
Evaluation Process
The Three P’s
1. PATIENT
2. PRODUCT
3. PROFITS

13. CHAIR COST

14. Contact Steve
Contact Steven Sunder at:
C: 602.524.1169
E: steve@sundervisionsolutions.com
W: http://sundervisionsolutions.com/