Four ways to increase your net before selling your optometry practice

Selling an optometry practice involves two major steps. The first is deciding it is time to sell the practice that you have spent your life building. The second step is executing a well-laid plan for getting maximum dollars for your life-long investment. When I coach buyers to successfully analyze an optometry practice, we look at the cash flow generated and the net dollars kept after expenses.  Buyers are keenly aware of the financial benefits of an optometry practice that keeps $0.40 for every dollar collected. If you desire to sell your practice and are currently keeping $0.26 for every dollar collected it is time to evaluate your practice. Consider implementing these four options for increasing your net dollars kept.

  1. Associate attentive in meetingDecrease expenses – There are many different strategies to decreasing expenses. One strategy I have seen other practices use successfully is using multiple labs. If a practice uses three different labs and does a line item expense comparison, they will notice that the lab prices vary between products. By highlighting the products that are least expensive between the three labs and then having your staff order the least expensive ones from the respective lab, the practice will find the decreasing cost of ophthalmic goods more profitable than one would expect.
  2. Increase volume of new patients – There are two ways to market–internal or external. The least expensive and usually most effective is internal marketing. Talk to your existing patients about the medical eye care that your practice offers. Visit with them during the exam about the latest development in contact lenses. They may not be a candidate but their friends might.
  3. Increase product sales – As optometrists we have no problem prescribing antibiotic infections for the eye, so why do we not prescribe specific anti-reflective coatings for computer fatigue? It amazes me how many optometrists feel like they are selling something when they say, “as part of your glasses prescription, I am adding (Prevencia or Recharge) to protect your eyes from the damaging blue light emitted from computer/tablet/phone screens.” By prescribing products  your patients need, you are helping them and increasing product sales at the same time.
  4. Increase fees – This is easy. Simply add $10 to the cost of each contact lens professional service. My business partner and I just bought a second practice and the Optos fee went from $20 (previous practice price) to $32 (our price). There has been minimal to no push back from patients. Do not be afraid to charge more.

Selling an optometry practice involves more than just posting a “for sale” ad on Optometry’s Career Center. A seller must intentionally prepare to market the practice by getting the books in order and making the practice net as attractive as possible. The above four options can increase the value of your practice immediately.

Alleviate the fear of your first Optometry Associateship

Young business woman panicCongratulations on one of the biggest accomplishments of your career–graduating from optometry school. Your professional journey has just begun, and starting in the right direction will ultimately determine your destination. As you prepare for your first associateship you may be a little nervous, a little hesitant, and possibly a little scared. It is perfectly normal to be fearful about your new position. As a practicing optometrist, I can safely say the majority of optometrists were fearful when they were first starting out. Overcoming fears is primarily preparation and mindset. As a speaker and coach, I’ve been anxious before addressing hundreds of optometrists. I have found that my preparation prior to the event has been the key to alleviating fear.

In preparation for your first associateship, here is a list of things you can do to help alleviate the fear you may have.

  1. Visit the practice – It is a good idea to place yourself in the setting that you will be practicing in.  Visit with the employer and see if you can shadow the doctors at the practice. In clinic, you most likely will not have problems doing what you were taught in school to do. Where you may feel insecure and fearful is in the conversations with the patient in the exam “wrap-up” and after you leave the exam room with the atient. Some practices will have a technician come for the patient, but there will still be a handoff between the optometrist and a staff member. Observing successful hand-offs will alleviate early fears.
  2. Read a book or two about leadership and communication - Many associates fail  because they have poor relational skills. Basically, the chemistry with staff is not there and an employer would tend to replace an associate rather than a complete staff. Having chemistry with those you work with will determine how successful you will be. Consider reading a classic on this subject, How to Win Friends and Influence People – Carnegie.
  3. Understand your Associate Agreement – It is extremely important that you understand the details of your associate agreement and job expectations. This will allow you to know how to meet and exceed expectations which leads to pay raises, partnership opportunities, and career satisfaction. I would highly recommend comparing your associate agreement with others in the optometry profession, so you know how your agreement stacks up. You maybe surprised at the differences.

If you want to be successful in your career it will take more than following directions and just doing what you are directed.  Those who are the most successful are taking the initiative to exceed the expectations of their employer. Opportunities are created.

For more information on this topic reference Eyelearn at for a webinar called Filling the Gap between Graduating and Practicing OD.

Selling an optometry practice? Start with this

Are you thinking about selling your practice? If you are an optometrist who owns a practice then you should be. You may not be planning to retire for 15 years, but you should still entertain the thought of selling, as many decisions you make now will impact your ability to sell later.

When optometrists are ready to sell, they are often stuck at where to start. One key document that you must have to set yourself apart from other sellers is an executive summary of your practice. An executive summary is a “teaser” for those who may be considering buying into a practice or buying a practice outright. An executive summary communicates enough information to pique a potential buyer’s interest without being so detailed it is passed over.

Screen Shot 2014-07-08 at 8.53.29 PMHere is a basic outline of an Optometric Practice Sale Executive Summary:

  1. Picture of office front or your website home page (assuming you have a dynamic optometry website)
  2. What is being sold (partial sale, outright sale, associate buy-in)
  3. Practice details
    1. Demographic details (this can be general percentages of practice patient make up)
    2. Insurance accepted
    3. Revenue per patient (total collections for the year divided by the number of full exams)
    4. Gross collections for past 3 years broken out for each respective year.
    5. Net/gross ratio
    6. What is special about the practice
    7. Relationship with physicians within the community
    8. Highlight that practice is the medical model (or a specialty contact lens practice, etc.)
    9. Equipment in use (buyers are looking for key pieces of equipment)
    10. EHR system (what system, following progression of meaningful use 1 & 2)
  4. Community details
    1. Churches
    2. Schools
    3. Driving distance to what attractions
  5. Purchase price
    1. Give the range of price
  6. Detail how you will help the buyer be successful if the buyer so desires

Remember, “curb appeal” sells houses, and the same goes for practices. Make your executive summary look nice and professional, and easily distributed by brochure/flyer and a printable .pdf.

Deciding to sell your optometry practice does not necessarily result in the sale of your practice. Those ODs who are intentionally planning for the sale of their practice and executing their plan are the ones who are finding satisfaction in selling their practice. Don’t make the mistake of 400-500 practices a year that close their doors without a buyer.

Asset or Stock Purchase: Optometry Practice Sale

To be a great CEO of your optometry practice it is imperative that you have the right individuals on your team.  The best leaders of optometry practices are surrounding themselves with people who collectively make everyone better.  The examples and education below comes from J.R. Armstrong, a CPA at May & Company, LLP, in Mississippi, who works with optometrists throughout the United States in the transitioning of their practices.

ASSET PURCHASE: Tax advantage buyer

  • The purchaser has the ability to depreciate the assets purchased, including the ability to take $179 on qualified assets. This is a huge immediate tax advantage to the purchaser.
  • Depending on the breakdown of the sales price, the seller may have to report ordinary income on any gain on the sale of assets subject to a maximum federal rate in excess of 40%. Sales price allocated to goodwill/patient list is taxed as capital gain to the seller, while amounts allocated to equipment are ordinary income.

STOCK PURCHASE: Tax advantage seller

  • The purchaser does not have the ability to deduct the purchase price. It becomes his stock basis in the practice, similar to if he were to purchase GM stock and later sell it; the stock basis would be used to calculate gain or loss on the sale at that point. There is no immediate benefit and no benefit until the eventual sale of the practice.
  • The seller receives capital gain treatment on the entire gain on the sale of his practice, the federal tax rate is generally 15% – 20%


  • Let’s assume Seller agrees to sell Practice for $250,000.
  • He has drawn nearly all the profits out of the company each year leaving Seller with a $10,000 stock basis in the company
  • He has taken accelerated depreciation on nearly all his equipment and has a tax basis of $15,000 in his equipment
  • Seller is in the 33% federal tax bracket, for a married couple that equates to income of approximately $225,000 – $400,000

Asset Purchase:

  • Seller and Purchaser agree to an allocation of $100,000 to goodwill and $150,000 to equipment
  • Seller recognizes $100,000 of capital gain on the sale of goodwill and $135,000 of ordinary income on the sale of equipment
  • Seller pays tax of $15,000 on the sale of goodwill and $44,550 on the sale of equipment for a total of $59,550
  • Purchaser gets to deduct $36,666.67 in depreciation and amortization on his return, resulting in a tax benefit of roughly $12,000 assuming he too is in the 33% bracket.

Stock Purchase:

  • Seller recognizes $240,000 of capital gain on the sale of his practice stock
  • Seller pays tax of $36,000 on this gain
  • Purchaser has a basis in the corporate stock of $250,000
  • Purchaser gets no tax benefit until he sells the practice


  • In the asset purchase scenario, Seller pays $23,550 more in taxes than in the stock purchase scenario
  • In the asset purchase scenario, Purchaser gets a tax benefit of $12,000 each year for 5 years (the depreciable life of OD equipment) and $2,200 for the following 10 years (the amortizable life of goodwill is 15 years)
  • Over the entire 15-year life of goodwill and equipment cost recovery Purchaser gets a tax benefit of approximately $82,000 in an asset purchase situation.
  • When Purchaser eventually sells the practice, he has already recovered the his basis in the practice through depreciation, so he will now be faced with a gain on the sale.

There are many other non-tax items that must be considered with respect to this decision, but hopefully this indicates the major cash-flow differences with respect to each method of purchase. Additionally, the actual results of the taxes will differ depending on both Purchaser and Sellers personal situation; i.e. amount of itemized deductions, other income, spouse salary, children etc.

Also, definitely something to consider – when you purchase the stock of a company, you also purchase any “skeletons in the closet” i.e. potential employment liability claims, unknown tax issues, potential patient litigation. There are insurance policies to cover these claims, but it’s certainly worth keeping in the back of your mind.

Screen Shot 2014-07-01 at 9.06.05 PM

J.R. Armstrong is a CPA at May & Company, LLP.  He specializes in optometry practice accounting and is recommended by OptometryCEO.  He can be contacted through

Take Control of Your Reputation on Social Media

iMatrix is a website development company that specializes in optometry.  From personal experience, I highly recommend them for any optometry practice wanting to maximize their online real estate.” – Chad Fleming, OD (founder OptometryCEO)

Guest post by Rachel Cunningham is a Marketing Content Writer at iMatrix.

Did you know that people are talking about your optometry practice on social media? Even if you don’t have a social media presence, people are discussing your practice on social media. You need to get involved and take part in the conversation.

Reputation Management - Wordcloud Concept.85% of consumers say they read online reviews for local businesses*

73% of consumers say positive customer reviews make them trust a business more*

79% of consumers trust online reviews as much as personal recommendations*

Online reviews are the new “word of mouth” for local optometry practices. As such, you need to know what people are saying about your practice. Get involved and take control of your reputation on social media following these four easy tips.

  1. Create Optimized Business Pages on Social Media
    1. Your optometry practice doesn’t need to have a presence on every social network. Instead, focus on three social media outlets patients use to voice their opinions. Set up a Business Page on Facebook, Google+, and Twitter. Optimize the pages with your Name, Address, and Phone Number (NAP). Include descriptions of your services and products, as well as links to your website and other social pages. Facebook and Google+ both have review features. If you notice that your reviews are not flattering, ask your happy patients to leave a review on one of your social pages. Google+ is particularly important since the reviews show up in your Google Maps listing on search result pages. Never buy fake reviews because consumers can easily sniff these out and they will discredit you. Twitter doesn’t currently have a review feature, but hashtags are highly popular on Twitter. The same holds true for Facebook and Google+ as well. On Twitter, regularly check your “Notifications” section to see if anyone has mentioned your optometry practice in a post. Whether the mention is positive or negative, if you have been mentioned in a Tweet, respond in a kind, professional manner. If you don’t have any resolution for the patient, it’s best to respond by thanking them for their feedback.
  2. Post, Engage, Respond on Social Media
    1. Maintaining an active presence on social media is another great way to take ownership of your reputation online. Create interesting posts and share them on your social pages. When patients and followers interact with your posts, engage in conversation. As patients comment on your social media posts, reply to their comments. Engaging and responding to your followers is a great way to create a positive reputation since it shows you are interested, listening, and responsive.
  3. Set up Alerts for Your Business Name
    1. A free service provided by Google is “Google Alerts.” Go to and set up an alert for your name and the name of your optometry practice. When an online user mentions your name on the internet, you get an email with a link to the mention. Google Alerts are the easiest way to track what people are saying about you and your business. You can keep a close eye on your online reputation simply by checking your email.
  4. Claim Your Yelp PageYelp Search
    1. Did you know that your practice can have a Yelp page even if you didn’t set it up? That’s right. Optometry patients can review your practice on Yelp and create a page for your business without your consent. The great news is that if there is an existing Yelp page for your optometry practice, you can claim it and take control of the information (not the reviews) on your page. Go to Yelp and search for your practice name in your city or zip code. If a page exists for your business, follow the instructions to “Claim” the page. If a page does not exist, you can still set up a business page for your practice. Click on “Yelp for Business Owners” and follow the instructions for setting up your page. Optimize the Yelp page for your optometry practice by completing all the fields possible.

Once your page is set up, you cannot control the reviews patients leave for you. You CAN respond to the reviews and ask patients for positive reviews. When responding to reviews (whether publicly or privately), always, always, always be professional and courteous. Ensure your response is sympathetic, conciliatory, and resolution-focused. Remember that potential patients are reading these reviews and responses.

As a local optometrist, it is essential that you take control of your reputation on social media. Being proactive is the best way to manage your reputation. Always be positive and never engage in arguing with patients online since this lowers you to the level of a negative reviewer. If you have any bad reviews, be sure to solicit great reviews from happy patients. In general, potential patients expect to see a mix of great reviews with a negative review here and there.

*All statistics are from Search Engine Land, 2013.

RachelRachel Cunningham is a Marketing Content Writer at iMatrix, a provider of affordable web marketing solutions for small, practice based businesses. She earned a Master of Arts degree in English from CSU Long Beach and a Bachelor of Science from Boston College in General Management. Rachel is experienced in writing content optimized for search engines and users, creating engaging content for social media, and crafting articles about SEO and social media marketing for small businesses.

What all new optometry graduates need to know

“The Gap,” Transitioning from Graduate to Doctor

Guest Post – Drew Heide, OD

businessman jumping over danger precipiceThe day the Doctor of Optometry class of 2014 looked forward to for the last eight years–graduation–has come and gone. Now what?

Before graduates can even start on their lengthy “To Do” list of state licensure, insurance provider panels, DEA numbers, NPI numbers, disability insurance, and professional liability insurance they have to do one important thing–find a job! The choices, options, and locations are numerous. Graduates may pursue private practice associateship, residency, starting a practice cold, or part time fill-in work to name a few. Not all new graduates will find their chosen position immediately. So how can new graduates prepare during this gap of time, however long or short it may be?

  1. Network and develop relationships – Schedule times to meet with and even shadow ophthalmologists in your community that you may refer patients to in the the future. If you are joining a practice, find out who they refer to for cataract extractions, lid surgeries, retinal specialists, etc. Being able to put a face with a doctor’s name is not only beneficial for you as a new doctor but also for the surgeons to become acquainted with you. This gives you insight about the ophthalmologist’s skills and techniques and how they may want patients co-managed. Also, meet with other optometrists in your community who provide specialty care such as low vision, vision therapy, pediatrics, or sports vision. You will want to refer your patients to someone you know and trust.
  2. Become comfortable with Electronic Medical Records – If you are able, spend time navigating the world of your future EMR software and take the time to become comfortable with it. Learn the format, the necessary steps to complete a chart, and the flow from the patient walking in the door and checking in to when they check out. Learn what portions of the exam need to be completed to appropriately bill insurance. Find out how you as a new doctor can make EMR uncomplicated for your staff and most importantly the patient. This preparation will increase your confidence and decrease the stress for your first day of practice.
  3. Optometric Association Involvement – If you were not already involved with state and national optometric associations during optometry school, become a member now and get involved. State associations will help you get plugged in with local doctors and state-run organizations. The AOA, which can be found at, can give insight to many new areas for new graduates like: disability insurance, liability insurance, and HIPAA compliance, along with many other tools and resources. Both state and national associations will be a benefit to you throughout your entire optometric career.
  4. Be a fly on the wall – If you have a job lined up and are waiting to receive your state license, ask to be a fly on the wall at the practice. Spend time in the dispensary observing how they order and dispense glasses. Follow technicians during pretesting or special testing. Watch how patients are checked in, how appointments are scheduled, and how insurance billing is handled. Observe and ask questions. As a doctor you most likely won’t be performing any of these procedures, but you will soon be a new member to this team. Knowing the patient flow will be valuable in making a smooth transition for you and everyone else on your team. Understanding your role and responsibilities in your new position will help reduce the learning curve every new graduate doctor experiences.

Whatever practice setting you are pursuing, and however long “The Gap” may be, use the time to prepare yourself. Optometry school may be over, but never stop learning. We have pursued a career that is always evolving and changing, that is why it is called the practice of optometry.

“By failing to prepare, you are preparing to fail.” – Benjamin Franklin

Heide headshotDrew Heide, a 2014 graduate from Northeastern State University Oklahoma College of Optometry will be practicing at Wichita Optometry, P.A. in Wichita, KS.

3 steps to hiring a great optometry staff

Staffing can be one of the most frustrating, yet rewarding investments when managing an optometry practice. Every aspect of a patient’s experience at your practice revolves around the work of a staff member. So why do some offices successfully find great staff members and others seem to go through personnel like my sister goes through friends on Facebook?

Finding great staff members requires diligence, repetition of the process, and patience:  diligence to continue to pursue the right fit, repetition in finding systems that work and sticking to them, and patience to pass up mediocre hires for great ones. Here are three steps to hiring great staff members.

  1. lady writing on clear board ACTION PLAN IDEABegin with the right marketing plan – Yes, just like you market your business for new patients, you market your optometry business for new staff members. Since many experienced professionals work at competing practices and other healthcare specialties, you must have a plan to pull great employees from other places. Market the wages that you are willing to pay the potential staff member. There is nothing like the allure of more money–advertise that.
    1. “optician position pays $17-25 hr. depending on experience”
    2. “signing bonus of $1,000 after the first 90 days”
  2. Allow current staff to interview applicants - As an owner of the practice, you do not have time to interview five to 10 potential applicants during the week. You need to work on tasks that will give you the greatest return on investment, and first-line interviews are not that. Instead, create a guide with approximately five questions that two of your staff members can ask during each initial interview. That way staff members can sift out ones not suited for your practice before you ever meet with them. Also, by giving current staff members some of the responsibility of evaluating future co-workers, they will be encouraged to lead them when they come on board as new hires. Of course, a key to this strategy is picking staff members to do the interview that you want the new hire to emulate. Below are a couple of sample questions to get you started.
    1. Why did you apply for the position?
    2. What is an optometrist?
    3. Describe a time where you demonstrated great patient care.
  3. Ignore the resumes – As CEO of your optometry business, it is imperative that you cut through the veneer of a resume. Having a simple online application that the applicant is required to fill out in the application process will not only give you a first-line informal interview, but it will help you discover which applicants you don’t want on your team because they can’t spell correctly (you would  think spell check would be used), or they talk in #trendy verbiage. If the details are important to you, then consider the online application. Of course, a resume continues to be important for analyzing past experience, but it should not be your first step in the process.  Check out this online optometry application for details on making your website function with an online application.

Diligence, repetition, and patience are the keys to finding the right staff.  According to a survey conducted by, a hiring mistake can cost some companies more than $50,000. Successful optometry practices lead the industry by taking the time to hire the right staff.

Four Reasons to Buy a Practice and not Start Cold

Optometrists cover a wide demographic. Some want to marry, have children, and live in a nice house. Others enjoy the fast-paced environment of a bigger city where they can work by day and play by night. Although dreams and aspirations may be different, we all have one thing we have in common:  the desire to control our destiny. We want to be able to choose our workload, choose our pay scale, choose our mode of practice (medical model or traditional refractive practice) and choose when we will work. Controlling our destiny starts with making calculated decisions from the beginning. Considering the framework of today’s optometry practice, starting your own practice compared to buying an existing practice or buying into a practice, can change the course of your destiny.

Starting Cold

Frozen manStarting a practice cold from the ground up is a great option in the right setting. The key is not being misled by your emotional exuberance to own.

I would not recommend starting a practice cold in a large city UNLESS your demographic research strongly supports a practice in a given area.

I would recommend starting a practice in a smaller town of less than 40,000 people IF you have previous connections in that town.

If your potential practice does not meet one of those two criteria, you may end up staying in the cold.

Buying a Practice

Even though some people have personality conflicts or other bad experiences joining practices, I still believe partnership or buying an established practice is the best option for a number of reasons. One is it is a lower risk than starting your own, yet has potential for a higher reward.

If you do not play with others well in the sandbox, I would recommend you buy a practice completely and do not join a partnership. This would be similar to the start-up but with a typically lower risk.

1. Established patient base - Patients prefer the more experienced doctor. This is obvious in our practice, we have four doctors (one with 35 years in practice, one with 21 years, one with 11 years, and the last with four years). When you buy a practice former patients will most likely give you a chance to win them over to your care. If you are starting a new practice you are less likely to get the over 50 population because they tend to like a more established doctor.

2. Less up-front cash – Typically it costs less to buy an established practice than start from scratch. You also have room to learn what you like and don’t like with the current equipment and setup before investing money in new technology or the latest office design.

3. Knowledgeable staff- This is a huge advantage because the staff will help keep many of your established patients. They also can help you make a successful transition into ownership. Obviously, staffing comes with its headaches, and an all-new staff might seem like a good idea. I would prefer to start with a system that is already working without me having to give much effort.

4. Established network - the practice that is purchased would already have a network of PCPs, retinology, cataract surgeons, etc. I would look for a practice that is medically oriented and verify these relationships are good and that each of the respective doctors reciprocate with ODs.  If this is found you know you will keep patients that are referred out and most likely the practice is receiving referrals in for medical eye care.

Is it possible to be successful in today’s optometry business world by starting cold? Probably, but it’s not likely. If you are looking to reach your destination sooner, look for a practice that meets the criteria above. Also, commit to being a team player. Don’t always expect everything to be done your way. Stay attuned to your dream of choosing the parameters of your profession. The definition of successful optometry today does not have to be a big practice with your name all over it, it can be found in working the business as a team sport.

How to sell your practice in 6 months or less.

For Sale signsOur profession will be going through significant transitions in the next five years. One of the major changes is the number of optometry practices changing ownership throughout the nation. An influx of optometrists are retiring and wanting to sell their practices, but they are having a difficult time doing it.

So why do some practices sell within six months, and others stay on the market for years?

To begin with, marketing a practice for sale is directly comparable to marketing a home. Homes sell because potential buyers come and look at the home. To get a potential buyer of your practice to look requires a description that makes a reader stop and take notice. So whether your potential buyers are perusing Optometry’s Career Center or your state association’s newsletter, your description needs to stand out and communicate the facts that they want to know. Compare the following two descriptions. Which would you consider pursuing?  They are for the same practice.

Description as posted by most sellers:

  • Optometry practice for sale in a beautiful town in western Kentucky. The practice is up-to-date and is offered as a full buyout to an optometrist looking to practice full scope optometry. The practice net creates a great income for a new optometrist or one looking to transition out of corporate opportunity. The practice has been appraised and all practice metrics are within acceptable ranges for a practice of this size. Building is available for purchase. It is a turnkey opportunity with room to grow. Please call Doug for more information at 555-112-3344.

Description that will attract today’s buyers:

  • Excellent private optometric practice available for a complete buyout in Kentucky. Practice is updated with EHR system “X” and an OCT/Optos with a website that generates 1-3 new patients a week. This is a turnkey operation for a new graduate or an OD working in corporate who wants to transition to private practice. Practice gross ranges from 450-500k and the practice net-to-gross ratio exceeds national standards (>33%). Seller will assist in transition to retain highest percentage of patients. Asking price is 60% of last 3 years average gross collected. If looking for an investment opportunity, the building is available for purchase. Interested buyers please contact Doug (owner) directly at 555-112-3344.

The ones most likely to purchase a practice are part of a generation that has grown up inundated with information. This generation routinely “tweets” messages that are short but give a wealth of information. It makes sense that when they are looking for a practice to purchase, they will naturally be drawn to descriptions that are short but full of meaningful details.

If your natural inclination is to write an ad more like the first example, it may be worth your time and money to hire someone to craft a description that is closer to the second one. The cost is minimal compared to the cost of not selling your practice.

What you need to know about due diligence and buying a practice.

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 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.