Nothing kills an economy faster than uncertainty does. All economic transactions are about the balance between risk, trust, and the hierarchy of information. In any transaction, it is essential for all parties to trust that what is being warranted by each party is as advertised. If anyone throws just a hint of uncertainty into that equation, the transaction might very well fail.

Pulling back the curtain a bit, we write these articles two months or more in advance. As I write this column in late July, the pandemic is raging—particularly in my neck of the woods. With no end in sight and the workforce hunkered down at home, my prime downtown location is starting to look very precarious.

The Current Situation

I would like to think that this pandemic will end soon, but I am uncertain. While there has been exceptionally good news on the vaccine front, I am less sanguine about that prospect for three reasons. First, no vaccine has been developed for any of the other human coronaviridae (Kahn, 2020).

Second, the logistical problems of delivering these vaccines are legion. Using at-risk manufacturing to make enough vaccine, vials, and syringes and finding trained personnel to administer the vaccine—not to mention maintaining the vaccine cold chain with nitrogen refrigeration—all make rapid deployment unlikely (Centers for Disease Control and Prevention, 2019; Blakenship, 2020).

Third, we have no idea whether vaccine-mediated antibody development confers any real and lasting immunity to COVID-19 or whether antibody-dependent enhancement might make the virus worse (Zimmer, 2020).

So, where does that leave contact lens practitioners? It leaves us uncertain, that’s where.

Steps to Take Now

If we don’t know what is going to happen, what can we do in the meantime to reduce risk? First, pay off debt. Paying off debt has never been more important than it is right now. If you cannot pay your debt off, refinance it with these historically low interest rates. Besides reducing overall exposure during these uncertain times, decreasing debt load through refinancing improves cash flow. Right now, in uncertain times, cash is king.

Second, reducing inventory and staff costs is the quickest way to improve your cash position. Take a good hard look at your staff costs. Is your gross per staff hour running a little low? You may have done these calculations earlier in the year, but how about now? If your gross per staff hour is in the $60 to $70 range or lower, then you are overstaffed.

If you inventory contact lenses, do you need all of that inventory on your shelf? Inventory is a depreciating cash substitute on your bottom line. Go to just-in-time ordering. Take advantage of manufacturer and distributor free shipping programs to direct ship to patients. It is a win for all parties.

The next thing to do is to sell more product. No one goes broke making a profit. Work for the yearly supplies by taking advantage of the manufacturers’ rebate programs. Make sure that your pricing is competitive. There is no reason why your patients can’t look at you as their most convenient and cost-effective supplier of lenses.

On the flip side, with everyone hurting and finance costs low, you could look into adding equipment or inventory.

Lastly, look at other ways to reduce fixed costs such as renegotiating your lease. If you are at the brink, contact a bankruptcy attorney sooner rather than later. None of us wants to go there, but be smart and dispassionate about it. CLS

For references, please visit www.clspectrum.com/references and click on document #299.