Buying or selling? Get organised

“Still, young optometrists and DOs should consider ownership because it allows you to increase your personal income, gives you an opportunity to shape and lead a team and be committed to its development. (It also) requires you to develop business skills and allows you to make your own decisions regarding annual leave, appointment times and suppliers. In short, it gives you freedom,” he said.

The provinces are where would-be buyers should look first, Allan said. “The provinces offer a slower pace of life and fewer competitors – and it’s very likely you will work closely with existing ones. (There’s also) variety and challenge, with patients ranging from paediatric to geriatric, plus you’ve got lower overheads.”

DOs owning and running practices was more common 10 years ago, he said. “While this model makes them reliant on an optometrist, DOs should still consider ownership; in generic terms 85% of revenue for optometry practices is via the sale of product, so they are at the coalface of influencing this.”

Allan summarised why optometrists and DOs should consider the provinces:

• Generally, the more profitable optometry practices are found in the provinces or in suburban metropolitan markets
• The patient base is less rushed and has a higher level of respect for the profession
• The provinces have a larger number of patients who (if required) will buy from your practice rather than requesting a script and buying online
• Lower business overheads
• The slower pace of life and work means less pressure
• Awesome locations to raise a family.

Do your homework, make sure the location is growing and that there is positive news in that location, identify competitors and any gaps, he said. “Since startups are risky, you should look to buy an existing practice with a growing patient base (30% per annum) and existing cashflows – this is the path of the modern entrepreneur.

“Find your space, whether it’s a form of specialisation, like contact lenses and ortho-k or behavioural optometry, or fashion. Choose who you want to be and act and communicate accordingly. Be accountable to yourself and know that a large part of good strategy is being clear on what you will not do,” he said.

Tips for provincial practice owners looking to sell:

• Preparation is the primary requirement – this applies to all business sales. Have clean, prepared financials for an effective sale
• Be prepared to stay on and work for one to two years (even part-time). This leverages goodwill in any transaction
• Sell your business on the front foot if you can, rather than for health issues, for example
• All data needs to be up-to-date and well packaged: accurate asset list, stock reports, effective use of practice software.

It’s never easy, but try to remove the emotional connection – it's not who you are, it's a business, he said. “Sell to the person who you know will provide your patients with the best continuity of care – often this is more important than the money.

“Stepping back from the process when you are likely to be emotionally connected to the legacy of what you have shaped and created can be helpful for some owners. If that’s you, then use a broker to assist in the packaging of the information and let a specialist lead the process.”