Buying an optometry practice can be the most time-consuming and daunting task of an optometrist’s career. Although the initial thought of buying a practice is exciting, making sure the prospective business is the right fit requires hours of digging into the details. Remember, nothing is off limits. It is better to ask now than to later regret not speaking up. Here are topics that need to be addressed prior to signing the purchase agreement:

  1. looking through magnifying lensWhat type of company?  S-Corp, Limited Liability Company, Sole Proprietorship.
  2. Can the owner sell the business?  Find out if the seller has any loans that require an authorization to sell the business.
  3. Tax statements.  Request tax statements from the last three to five years.
  4. Insurance accepted.  Which insurance providers do they use?
  5. Employee benefits.  What is the pay and benefits package of each current employee? Are any of the employees related to the seller?  What is the length of employment of each employee?
  6. Lawsuits.  Is the practice or any of the doctors in a current lawsuit?  Has the practice or doctors been involved in any lawsuits?  If so, have all matters been settled?
  7. Contract agreements with third parties.  Ask for any agreements that have been signed on behalf of the company (e.g., loans, vendors, creditors, leases).
  8. Licensing.  What licenses keep the practice legal in regards to state and local business laws? These would include any city permits.
  9. Liens or Mortgages.  Be aware of liens or mortgages and factor them in when looking at closing costs. Will your company assume these or request the seller obtain release?

This is not an all-inclusive list but does cover many of the most important aspects of digging into the details of buying a practice. The excitement of buying a practice will soon be lost if due diligence is not performed prior to the signing of a purchase agreement and the transitioning of the practice. For questions concerning buying or selling a practice email Chad Fleming, OD at bcod@excelod.com. All AOA members receive complimentary coaching through AOAExcel as a member benefit.

Reference:  Moss, Gary, and Peter Shaw-McMinn. Eyecare Business: Marketing and Strategy. Boston: Butterworth-Heinemann, 2001. Print.