Jan. 24, 2018
The future of independent optometry relies on equitable practice transfers that allow both buyer and seller to come out ahead. That begins with both sides understanding one another’s goals and the tipping points that address both financial objectives and personal concerns. See tips from Mark Wright, OD, FCOVD, professional editor of ROB, and Bob Schultz, CEO of Vision One Credit Union.
Perform Due Diligence on Practice & Patient Base |
Consider the Other Side’s Perspective |
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ANALYZE PATIENT BASE. Patients tend to age along with their doctor, so a doctor in their sixties is likely to have patients the same age. Compute their growing medical eyecare needs. PLAN FOR CONTINUITY. An optimal patient mix includes those of all ages, including families with children who will continue to see you well into the future. ESTIMATE SPENDING POWER. Take the average patient purchase and extrapolate profits–and potential profits if you can increase that average. |
LAST CHANCE TO EARN. Sellers often are retiring, and the practice sale is their last chance to put money away. Understand the seller’s expectations and address their concerns. CALCULATE NET CASH FLOW. The most critical metric in practice valuation is net cash flow. Compute this on your own; many sellers don’t know it or inflate it. RECOGNIZE LEGACY CONCERNS. Address the seller’s hopes that the practice, post-sale, will continue to provide patients with excellent care, and will offer employment security for valued staff.
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Mark Wright, OD, FCOVD, is professional editor of ROB, and the owner of Pathways to Success, a practice management consultancy based in Columbus, Ohio.. He is CEO of www.optometrymatch.com, a service that links ODs looking to buy with those looking to sell. To contact him: mwright@pathways-o.com.
Bob Schultz is CEO of Vision One Credit Union in Sacramento, Calif. To reach him: BSchultz@visionone.org.
