What are we missing?

Thank goodness for that! Over 30 years ago, optometry for the most part consisted of a collection of independent practice or small business owners that were very happy with the way things had always been and were tickled to death to keep it that way, thank you very much.

At that time, graduating with a degree in optometry was the first step in creating your own practice or small business. Opportunities for associates, partnerships or practice sales were not as plentiful as they seem to be now. Today corporate optometry has created opportunities for many new graduates that traditional practices didn't or can't.

In addition, there are opportunities for optometry and ophthalmology to work in the same practice, combining their talents for an enhanced level of patient service. We also see many other opportunities for optometrists in hospitals, surgical centers and research. Another viable option is for new grads to purchase existing practices.

Decisions, decisions

One of the differences between employment and buying or starting a practice is often the ready source of income in the employment-based opportunities. In addition, those new grads and practicing optometrists who are interested in purchasing existing practices are often confronted with the difficulty of generating enough income to meet the financial responsibilities of the practice. They must also amortize student debt and the debt associated with the acquisition of the practice and still have enough left over to live on.

Many optometrists are now either actively trying to sell their practices or thinking about it. Many, if not most, of these optometrists have visualized the following steps for this transaction:

•   Buyer can't wait to own the seller's practice.

•   Buyer borrows money.

•   Buyer pays seller in a lump sum.

•   Seller now has the retirement that he or she planned on.

•   Buyer continues the practice.

•   Everyone lives happily ever after.

Shades of gray

In today's world of lending, things are not this straightforward. Most sellers who expect a buyer to show up with cash of their own or from loan proceeds are sadly disappointed. In most cases, lenders are no longer willing to loan for the purposes of purchasing a practice without collateral. Today the realistic seller of an optometric practice recognizes two primary truths:

1. A professional in the field of evaluating business should assess the fair market value of the practice rather than basing the price on what you as the seller would like to receive.

2. As the seller, you can typically sell the practice for no more than you are willing to either loan to or cosign for the buyer.

Plan ahead

Part of our overall business plan should not only be how to begin our careers in optometry but also how to end that career when the appropriate time comes. If you are interested in selling your practice or you're getting close, now is the time to plan, not for how you will sell the practice but rather how you will make owning your practice affordable for the buyer.