Vision Expo East was an eye-opener for me as an optometry student mainly because I was exposed to so many opportunities in the industry at one time and in one place! Not only was it an opportunity to meet new colleagues and check out thousands of new products on the market, it was the best place to be educated on becoming a successful optometrist!
As Chief of Private Practice Optometry it was my goal to absorb as much as I could about the private practice spectrum by talking to different ODs and attending one of the hundreds of continuing education courses focused on private practice. I was able to attend a very helpful lecture dedicated to purchasing an optometric practice given by Walt West, O.D., F.A.A.O., the Vice President of Practice Development Vision Source, LP. Professional development is a skill not typically taught in optometry school, and as a student determined to become the owner of a private optometric practice I was able to learn a lot about what really goes down when purchasing a practice, as well as the things you should know beforehand.
Initial Decision: The first thing you want to think about when purchasing your new practice is LOCATION, LOCATION, LOCATION! Where do you want to live and practice for a good amount of time? You can start by deciding a region and narrowing it down to the state, rural or suburban, and lastly the city. Know that STABILITY is a great advantage to asset growth, so choose a location you have researched well. You also need to know about the changes occurring or that will occur in that area in the future. With the help of the AOA, state associations, and your networking connections you should be able to narrow down your search!
Are You Ready? You must evaluate your own readiness to become the owner of your own practice. Ask yourself questions like “Is my education, clinical experience, business management, and retail experience up to par?” If you are iffy on any of the above just realize that learning on your own can be costly and risky, and maybe obtaining a mentor or hiring a more experience doctor to work alongside of you could help the transition go smo
What Are You Really Buying? Not only will you be buying a practice, you will be investing in equipment, inventory, employees, an emotional attachment (worth nothing to you), but most importantly you will be buying a revenue stream: the ability of the practice to generate revenue and yield profit, a livable salary for you, and a financial asset. This is a big deal – you need to know what you’re getting into and what comes along with purchasing a practice, whether it is good or bad.
The Transition Process: Purchasing a practice can go down in several ways. The seller can just up and leave after closing, the seller can stick around for a time pre-determined by the both of you, or you could be partnering up or partially buying in. Let’s say the seller decides to “dip out” right after closing – this could be good or bad. Good thing is you can have a clean break, you are your own boss, and you can basically do what you want. The bad thing being you basically just lost your negotiating rights as soon as you signed that paper, along with the community relations advantage that seller could have helped you with. What about the seller sticking around a bit? It could be good because you could keep goodwill with the community and staff, the seller could be a sort of consultant for you, and since the seller is gradually phasing out that means more time to NEGOTIATE! Then again, the seller could disagree with you constantly, staff may show preference to the old owner, you are immediately responsible for “everything”, and it’s emotionally challenging and sort of like living with an ex!
The Legalities Of It All: Know your entity! Is this a sole proprietorship, a PLLC, a C Corp, or an S Corp? Wait… what? Exactly! Invest in a lawyer and a CPA! Your lawyer is there for important documents and your CPA is there for the financial part! Leasing? Does the seller own the real estate? Would they want to sell it to you, and would you want to buy it? If not, take into consideration the “Right of First Refusal” which keeps the seller from selling the real estate to someone else before you have the chance to buy it from him first! KNOW YOUR RIGHTS!
Last but not least, NEGOTIATE. Everything is negotiable… EVERYTHING!
Although the complexity of buying a practice covers a lot more than what I explained above, the gist of it is pretty much all here. The course I attended is only a glimpse of the courses dedicated to private practice provided by Vision Expo, and with Vision Expo West coming up in Las Vegas, Nevada I plan on gaining a lot more knowledge in order to share with my fellow optometry students!