If you’ve been practicing optometry for more than 10 years, you should plan your exit strategy. Many optometrists put off thinking about their transition to retirement.
Unfortunately, today’s practicing ODs will not have the luxury of seeing graduating optometrists lining up to buy their practices. Nor will they find many interested in working as associates with the goal of eventually becoming partners.
The world of optometry practice mergers and acquisitions is evolving. Make sure you are positioning yourself for the new market by working towards a plan that is lucrative, but still ensures continued patient care.
In this new market, three successful exit strategies are emerging:
- Corporate buyout – Buyouts are currently happening across the United States as corporations and investors are capitalizing on optometry practices’ profit margins. Optometry practice, as a business, is lucrative. Many businesses consider 8-10 percent profit margins desirable, and optometry practices can generate 20 percent or more after all salaries are paid–including ODs. Buyouts seem to be a viable option as a future exit strategy.
- Large OD practice acquiring small OD practice – As healthcare evolves and government regulations increasingly strangle the internal systems of optometry practices, small optometry offices are losing any competitive advantage. Larger practices are able to consolidate resources and cut overhead to compensate for the increased IT costs and staffing costs related to government mandates. Being acquired by a larger practice will give small optometry practices their best chance to exit, assuming the market is right. However, the buyer will have the advantage when negotiating practice purchase price.
- Integrated health systems – The big unknown in the future is integrated health systems. Across the country, big healthcare bodies are consolidating and looking for optometry practices that fit their model. These large healthcare bodies are buying out medium to large optometry practices at dollar amounts that exceed the current market value of optometry practices. This pattern appears to be a growing option as an exit strategy for optometrists who have built medium to large practices.
Of course, other means of transitioning your optometry practice may be available when it is time. However, the traditional mode of transition is becoming extinct, something only to reminisce about over an evening glass of wine at the regional CE meeting. By addressing this reality, you will position yourself to be rewarded for your hard work in building a successful practice.
Those who assume nothing has changed will find themselves disappointed when their exit strategy leaves them working longer than wanted, and–worse yet–selling at a much reduced price.
