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Many optometrists have told us they are not sure how to go about their practice transition. Whether it’s buying, buying into, or selling a private practice, you should consult with an experienced “practice transition support team”.
 
 
We have found that experienced resources are very hard to find. Some states have more support resources than others but none have assembled a complete team to help ODs.
So, who should be on this team and where can you find them? Vision One has identified the most important team members (below). As a service to optometry, Vision One
will be offering assistance to state associations to create their “Practice Transition Support Network”...team members you can use if guidance is needed (stay tuned).
 
Younger ODs looking to enter private practice ownership don’t know how to start the practice search or what to do if they find one. This coupled with the fear of student debt
payments actually drives many recent graduates to take a corporate position.
 
Optometrists that desire to exit the profession do not seem to be aware of the various options available to them. In our opinion, an OD should be able to retire in the time frame
and in the manner they want. Vision One has developed services to support this goal.
 
To understand who should be part of your practice transition support team, you need to know what services are needed to transition a practice. Depending on what action you want to take, you might need some or all of the services described.
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BROKERAGE
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Brokers perform many services in addition to matchmaking.
 
  • Find buyers / List practices for sale - Expose the
    practice to a broader market.
  • Weed out “tire kickers”, saving seller’s valuable time.
  • Find sellers for qualified buyers.
  • Supply confidentiality agreements to protect your
    practice financial data.
  • Provide practice valuation services – determine listing
    prices.
  • Create sale contract – Though not attorneys, brokers
    generally have enforceable standard forms.
  • Assist negotiations – Reduces emotions. Identify and
    resolve a broad range of issues.
  • Help in the practice property lease negotiations.
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ACCOUNTING
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Look for a firm with optometric practice and transaction experience.
 
  • Acquisition / Disposition Services (Buyers or Sellers).
  • Financial due diligence of the sellers books.
  • Support in the preparation of budgets for the new buyer.
  • Allocate assets (part of sale negotiations).
  • Manage gain on sale tax issues (i.e. seller note deferrals, etc.).
  • Advise on financial / retirement plan issues.
  • Accounting for ongoing operations.
  • Setup the proper accounting systems.
  • Provide financial reporting to recognize profit centers and alerts
    to significant changes.
  • Tax management – Shelter ongoing practice earnings.
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LEGAL
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Look for an attorney with medical and transaction experience to help with:
 
  • Knowledge of state board requirements - acceptable names, number of
    locations, ownership structures, etc.
  • Sale Contract – terms, conditions, price / payment terms, definition of
    property conveyed, seller note preparation, employment and non-compete
    agreements, etc.
  • Representations and warranties. Clear title for assets conveyed.
  • Property lease review.
  • Incorporation, fictitious names.
  • Partnership or Shareholder Agreements – Terminating partners, buy-out
    provisions, valuation methods and compensation terms.
  • Overhead Sharing – operating agreements, use of property / staff,
    primary and sub-leases.
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VALUATION / APPRAISER
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Used for impartial 3rd party opinions of value. This is helpful if brokers cannot
resolve a value impasse or are not used in a transaction. Other uses include
valuations for a buy-in or buy-out of partners. An experienced optometric practice
appraiser is critical to a reliable appraisal. Some brokers are also appraisers.
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FINANCIAL INSTITUTION / VISION ONE CREDIT UNION
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Most transitions involve outside financing. A full service financial institution
(loans and deposits) with experience in optometric practices is recommended.
The institution should be “relationship” not “transaction” oriented. At Vision
One Credit Union, we can benefit your transition and optometry in general:
 
  • We have financed optometric practices since 1951.
  • We understand the business of private practice.
  • We re-invest all of our deposits into private practice optometry.
  • We share our experience to help buyers understand transition risk.
  • We offer special loans for first time buyers with beneficial terms to help
    offset transition risks.
  • We finance practice buy-ins (partnership or incorporated private
    practices).
  • We orient buyers to their cash flow needs related to all income sources.
  • We help save time by offering practice acquisition loans and business
    checking accounts all in one place.
  • We can even pre-qualify buyers or practices for sale to expedite the process.
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Members of your practice transition support team should have substantial experience with optometric practices. You wouldn’t want a patient to see a general medical doctor for eye care, so don’t expect good results from service providers that occasionally serve optometry or rely on a general medical model. A knowledgeable support team will understand many of the transition risks and will take the time to explain them to you.
 
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