Figure out whether and when to open a practice

Practice ownership is desirable to many ODs. Each person’s journey to ownership can look vastly different depending on the set up. Partnerships, acquisitions, and cold-start practices all have their unique benefits and challenges. Through my own experience opening two cold-start practices and working as a consultant with an optometric practice consulting firm, I’ve assisted in opening over 250 practices nationwide.

Here, I discuss the reasons to seriously contemplate opening cold and when to pull the trigger.

THE REASONS

The desire to open cold is often multifactorial. Based on the research amassed by the optometric consultancy I’m part of and through conversations with would-be owners, here are some of the most common reasons:

• Opportunity to purchase as an associate isn’t available.
• Negotiations to partner didn’t come to fruition.
• Lack of practices available for purchase.
• Practices for sale aren’t viable/profitable, or are in decline.
• Growing towns/new communities allow for new practice potential.

Doctors who choose to open cold also typically seek autonomy, and they want the opportunity to build a practice from the ground up and put to work the creativity needed to start from nothing.

Do any of these bullet points and the characteristics mentioned above resonate with you? If so, it may be time to dig deeper by reaching out to colleagues who have either opened cold themselves or know someone who has; optometric organizations; and optometric practice consulting firms.

WHEN’S THE RIGHT TIME?

Simply put, there’s never a good or convenient time to take on a cold-start project.

For example, I opened my first cold-start practice upon graduation and my second one at the tail end of a pandemic while seven months pregnant. I sold my first practice after 6.5 years to move across the country and start my second one. If I can do it despite those challenges, I truly believe anyone can!

Planning regarding existing employment contracts, non-competes, and getting finances in order all play roles in considering “the right time” to take the plunge. Regarding the latter, for example, individuals who haven’t filed for bankruptcy and don’t have credit card debt may find it interesting to know that they can often acquire 100% financing (even with massive student loan debt)!

WHAT TO EXPECT

The first six months of a cold start look vastly different from years one, two, and three. If the practice’s demographic and location are selected properly, and costs are correctly planned for and maintained, most ODs can start paying themselves a fair market wage as early as six months. Because of this, most cold starters maintain part-time associate positions outside their practice for six to 18 months. Significant growth can be noticed through years two and three. Most practices reach “adulthood” around year five, when a more consistent, stable growth (typically 10% to 12% to account for normal attrition) is reached.

SEIZE THE DAY

Contemplating starting cold? Reach out to myself, a colleague or consultant and make tomorrow the first day of your story. OM

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DR. O’BRIEN is the owner and optometrist at Denver Eye Care & Eyewear Gallery in Denver, N.C. She is heavily involved with student programming through the private practice clubs and Vision Source NEXT program and works with iCare Advisors as a consultant to help others pursue their cold-start private practice dreams.