By Cheryl G. Murphy, OD
One of the most complex aspects of the family optometric practice is passing ownership to a son or daughter OD. This is the first in a series in which Cheryl G. Murphy, OD, explores the family dynamic in optometry by speaking with several families of optometrists.
When Bruce Clarin, OD, of Clarin Eye Care Center, in Miami, Fla., was ready to hand the reins of his practice to son Adam Clarin, OD, the two took a well-planned out approach. The strategy paid off. By pairing up, implementing technological advances and marketing their practice as an up-to-date, modern business with family values at its core, Dr. Bruce Clarin and Dr. Adam Clarin were able to double their practice’s gross revenues in just four years.
It took a lot of hard work since the competition surrounding them was plentiful. Within 3/4 of a mile of their office is another private eyecare practice, a large ophthalmology group with a full-time OD, and two major optical chains, as well as three other private practices just over 1.5 miles away. The 30-year head start and the infrastructure of a successful practice already setup by Dr. Bruce Clarin gave Dr. Adam Clarin the credibility of a well-established, reputable practice, which enabled him to expand the business quickly.
Well-Thought Decision to Join Profession
Despite his father’s successful and fulfilling practice, Dr. Adam Clarin never thought about following in his dad’s footsteps until his senior year of college: “I never thought of being an optometrist growing up. I always took for granted my dad being able to provide for four kids while having the time to coach our teams and be there for everything we needed. I went to college with no real thought of my future. My undergrad degree is in psychology and my plan going into my last semester was to go to graduate school for sports psychology. But by then I met my future wife and started to think about the rest of my life. Optometry was a perfect mix of people, science and problem solving, while being able to be my own boss and enjoy my life like my father did. My other alternative was seven more years for a PhD and no promise of a career. I'm sure it came out of nowhere when I mentioned for the first time at 21 that I may be interested in his profession. At that point, I couldn't tell you much more about optometrists other than they had a chair that went up and down.”
Foundation Laid By Older Generation
Dr. Bruce Clarin worked as a staff optometrist at Bascom Palmer prior to him and a friend deciding to purchase two private practices about 40 miles apart. He said that he and his partner “worked at both for a while, then decided to split them up.” After that, he was on his own until 1992 when a different OD moved in and shared his office space. Dr. Bruce Clarin remarks, “It was interesting to see how another optometrist practiced while we still maintained separate practices. I eventually bought his practice 10 years later.”
Dr. Bruce Clarin paid the out-going OD per day after he bought his practice, plus the other OD financed the purchase. “We continued practicing pretty much the same as before, I just had to make sure he worked the agreed upon number of days. By the time my son graduated, the other doctor was only working one day a week in my practice.” Dr. Adam Clarin then joined Clarin Eye Care Center as an OD in 2008.
Treat Partnership as Business Deal
Dr. Bruce Clarin and Dr. Adam Clarin didn't consult with a lawyer to draw up partnership terms, but they established a detailed plan of how Adam would buy in. They also followed advice from their accountant and used guidelines of how to assess a practice’s value. "We knew of a few ways to value the practice," says Dr. Adam Clarin. "We used three different methods and the price we agreed the practice was worth when I joined was what we based the "sale" on. Our accountant went over the financial and tax implications and gave us advice on the business transfer. Eventually I will own the business and pay my father a daily rate. Right now we each get paid a daily rate (his is higher than mine) and we share the profits. Just about all of my profits are re-invested in the practice. That is one sticky point, being in such different places in our careers, I want to invest in my future and he wants to earn as much now as he can. Luckily, my dad is reasonable and understanding. So, we strike a great balance. Plus, as he's seen my investments into technology and marketing pay off, he's more on board with continuing to grow the business.”
“When I first joined the practice, I was working there two days a week and elsewhere three to four," says Dr. Adam Clarin. "I set up my own Professional Association corporation, as my accountant advised, and was paid as an independent contractor. The plan [that my father and I discussed] was always to buy in, but at first we took it as a more employer-employee relationship. After a year, we set up a structure where I'd buy 10 percent per year for 10 years. My contributions were mostly practice building and we started growing very fast. After 2010, only two years in, we increased the gross by 50 percent. After three years it was up to a 70 percent increase and today, a little under four years, the practice is up almost 100 percent--just about doubling the gross dollars per year. All this happened and my father is taking an extra half-day per week off, leaving him working only 3.5 days. So, the increase in profits and his decrease in work hours is what pays for my takeover at this point.”
“When I joined, I jumped in with two feet. I think there is a disconnect between more seasoned ODs and newer ODs in the financial landscape of optometry. I had the 'privilege' of working in commercial optometry so I saw first hand what patients were looking for and how they were making decisions. I also saw how large companies make decisions relating to employees and business practices, allowing me a perspective that was very different from my dad's, who only knew one way of running a successful practice," says Dr. Adam Clarin. "I try to take the good things from everywhere I worked in order to run the most efficient and profitable practice, but the underlying theme that my dad always preached was to put the patient first, and I couldn't agree more.”
“I also used my time in commercial practice to try and pinpoint the different types of patients and how they decided where to go for their eyecare," says Dr. Adam Clarin. "I quickly implemented technology to go along with patient care. But the proudest I feel is almost every day hearing that coming to our office is like going to that familiar community small business, and being treated like family.”
Transition Business for the Next Generation
Dr. Bruce Clarin says that bringing Dr. Adam in as an OD was an easy transition for his patients. “I was telling them for four years that my son was coming in and they were prepared. It's much easier to transfer the good will to your son than a stranger. I think patients figured the apple doesn't fall far from the tree and they liked me enough to come back year after year. The transition goes smoother when trust is built in.”
Dr. Bruce Clarin’s advice to other parent ODs adding their offspring ODs to the practice: "Be patient. The new grads have a lot more book knowledge but lack the clinical and people skills that have made you successful. Make sure the pay and number of days is laid out in advance so there are no surprises, and try to leave your family and work lives separate."
Reap Benefits of Adding Tech-Savvy to the Practice
Dr. Bruce Clarin says that Dr. Adam Clarin has brought a lot of technological insight to his office and “has taken the bull by the horns as far as the practice management goes. He's more in touch with technology than I am so he's made a big impact. I think the first thing he did when he joined the practice was get rid of the appointment book and day sheet and make us all use the computer for those things. That set a tone from the beginning that he was making decisions and that technology was going to play a big part in our future. Since then he has overseen a complete transition to electronic medical records and a mostly paperless practice.”
Dr. Adam Clarin says that working together has had a positive impact on the practice and the partnership has definitely become a success: “Patients love the father/son family aspect. It definitely lends some credibility and trust when you see a successful family run business, especially compared to today's greedy corporate entities. People know coming to our office they will feel comfortable, like they're part of the family.”
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Bruce Clarin, OD, and Adam Clarin, OD, are owners of Clarin Eye Care Center in Miami, Fla. To contact: firstname.lastname@example.org.