What are we missing?
Thank goodness for that! Over 30 years ago, optometry
for the most part consisted of a collection of independent practice or small business
owners that were very happy with the way things had always been and were tickled
to death to keep it that way, thank you very much.
At that time, graduating with a degree
in optometry was the first step in creating your own practice or small business.
Opportunities for associates, partnerships or practice sales were not as plentiful
as they seem to be now. Today corporate optometry has created opportunities for
many new graduates that traditional practices didn't or can't.
In addition, there are opportunities
for optometry and ophthalmology to work in the same practice, combining their talents
for an enhanced level of patient service. We also see many other opportunities for
optometrists in hospitals, surgical centers and research. Another viable option
is for new grads to purchase existing practices.
One of the differences between employment and
buying or starting a practice is often the ready source of income in the employment-based
opportunities. In addition, those new grads and practicing optometrists who are
interested in purchasing existing practices are often confronted with the difficulty
of generating enough income to meet the financial responsibilities of the practice.
They must also amortize student debt and the debt associated with the acquisition
of the practice and still have enough left over to live on.
Many optometrists are now either actively
trying to sell their practices or thinking about it. Many, if not most, of these
optometrists have visualized the following steps for this transaction:
wait to own the seller's practice.
seller in a lump sum.
has the retirement that he or she planned on.
continues the practice.
happily ever after.
Shades of gray
In today's world of lending, things are not this
straightforward. Most sellers who expect a buyer to show up with cash of their own
or from loan proceeds are sadly disappointed. In most cases, lenders are no longer
willing to loan for the purposes of purchasing a practice without collateral. Today
the realistic seller of an optometric practice recognizes two primary truths:
1. A professional in the field of evaluating
business should assess the fair market value of the practice rather than basing
the price on what you as the seller would like to receive.
2. As the seller, you can typically
sell the practice for no more than you are willing to either loan to or cosign for
Part of our overall business plan should not only
be how to begin our careers in optometry but also how to end that career when the
appropriate time comes. If you are interested in selling your practice or you're
getting close, now is the time to plan, not for how you will sell the practice but
rather how you will make owning your practice affordable for the buyer.
Optometric Management, Issue: July 2006