Have you been thinking about retirement?
If you have graduated from optometry school and you currently own your practice, you should be. It’s never too early to begin the process of preparing your practice to sell. Many optometry practices do not sell for reasons that could have been prevented if the CEOs would have had the mindset that someday they would sell. If you plan to someday sell your optometry business, then avoid these four costly mistakes that have left many optometrists holding a business they cannot sell.
- Aging Technology – Some optometry practices still use outdated technology like the GDx. You might have a chance of selling your GDx in the United Kingdom, but you won’t get anyone to buy it in the United States. The standard optometry practice should have some form of Optical Coherence Tomography (OCT) technology.
- Paper Records – If you believe you will hold out on changing from paper to EMRs (Electronic Medical Records), then plan on holding out from selling your practice. Most of the optometrists who are in the market for buying a practice have not even performed an exam on paper. Also, as costs continue to mount for changing from paper to EMRs, the pool of investors who are interested in paper offices has shrunk. Investors do not want to spend thousands at the outset just to make the office current. If you remain on paper, the value of your practice is on the decline.
- Single Owner Doctor – What would happen if you stepped out of the practice? Is the success of the practice dependent upon one individual? The optometry practices that can remain profitable independent of a sole doctor are practices that carry the most value for potential buyers. Hiring an associate OD can be a difficult decision due to the up-front costs, but not selling your practice can be much more costly.
- Depending on vision benefit plans – If your practice cash flow is greater than 50 percent from vision benefit plans like VSP, Eyemed, & Superior, then selling your practice will be highly dependent upon the future of the segregation of vision and medical. As we move to an Accountable Care Organization (ACO) environment where fee for service becomes obsolete, practices must prepare for bundled payments and full capitation. To be profitable in this environment, the number of patients seen must increase as the reimbursements decrease. Optometry practices depending on “ramping up their schedules” can only ramp up so far until it starts costing the practice to see patients. Transitioning your practice to a medical model with complimentary vision benefits is a must for selling your practice.
Optometrists continue to make similar mistakes each generation. Building a practice that is salable is key to maximizing the potential profits of owning a practice. If doing this does not seem necessary nor desirable, it may be an indication that you are best fit for being an associate. If you currently own a practice, you will want to sell it someday. Making the above adjustments should be at the front of your list for working on the practice. An astute buyer will not pay much more than 55 percent of the last three years’ average gross collected, and many buyers will not even pay 55 percent. Take action now and build your optometry practice to sell.
