Article Date: 8/1/2006

o.d. to o.d.
Preparing to Take Your Bow
There's never a bad time to start planning your exit strategy from private practice.
BY WALTER D. WEST, O.D., F.A.A.O. Chief Optometric Editor

Graduating in 1975 from The Southern College of Optometry was the beginning of my professional career, as it was for all of my classmates. The early years were full with the concerns of establishing a practice, building a patient base, generating income, repaying bank notes for leasehold improvements and equipment notes and much, much more. Naturally to get a small business started and make it profitable was all that many of us could focus on in those early days.

Becoming complacent

Then somewhere in the career of many optometrists, their practices became more consistent regarding patient flow, income and debt management. And, then it happened: routine set in. The status quo was good enough and that's where they stayed. Their student debt was long since retired, their original equipment was paid off and under the guise of avoiding any further debt, they made no real attempt to invest in the future of their practices. Many of these O.D.s felt that debt avoidance, rather than debt management, was the best way to increase the cash value of their practice.

Dreams deferred

Let's role the clock ahead 31 years and take a look at how those plans are now serving optometrists in the later years of their career.

Many of those 1975 graduates are between the ages of 55 and 65 today and have either retired, are hoping to retire or in some cases, realize that they unfortunately won't be able to retire. Some of those O.D. owners sold their practices as thriving businesses and completed the cycle of a practice career. Many are now interested in selling their practices and remaining as an employee in an effort to get their cash out of the business, yet continue to generate income while others would rather relax on a beach somewhere and never ask anyone about "one or two" ever again.

Not over yet

For those of you in that middle stage of your practice's maturation and growth, you have more work to do; it's not time to become complacent or satisfied with reduced worry about cash flow and where the next patient will come from. Now it's time for you to develop plans to take your practice to the next level, as well as develop your exit strategy. Those of you who have already advanced your practice to a very successful level should focus your efforts on your exit strategy as well. After all, now that you've built such a valuable business, who can afford to buy it? Banks are no longer willing to finance a small business purchase and collateralize the loan with the value of the business. They now require collateral that many O.D.s don't have.

Looking ahead

I write this not as a warning but rather as an encouragement. I encourage all practicing optometrists new to our profession and early in their career to look to the future of their practice from the very first day they open their doors — not just the future that exists in the next day, week, month, or year but rather decades ahead. And to those well into your career, if you haven't already developed an exit or succession plan, it's time to begin.

Groom your practice by investing in the technology and well-trained employees who are the platform from which practice efficiency and profitability grow, thereby increasing the value of your practice as well as your ability to retire on your terms.

Optometric Management, Issue: August 2006