What to Look for Before You Buy an Optometry or Optical Practice?

These days, the young optometrists face a huge financial challenge. Most of them already enter the field with a five or six-figure loan burdening them. 

And if they decide to buy an optometry practice, the amount of debt can easily double or triple. With the troublesome debt payments hanging on their necks, buying a problematic practice is the last thing they would want.

In this blog, you will learn about the crucial factors you need to look out for before buying an optometry practice of your own.

Let’s dig in.

• The Cash Flow of the Practice

Many optometrists often focus or are tempted to focus more on the outward appearance of the practice. A lot of people assess the state of optometry by checking out the furniture, tools, computers, and other outward assets.

But that’s not how you should assess it. No. Instead, you should focus more on the elements that aren’t visible to the naked eye. 

For example, the cash flow.

Once you flip the financial records of the practice, you will get access to the following valuable info:

• How or when the customers make payments for the practice’s services.
• The procedures that generate the most revenue for the practice.
• The data about the optometry practice’s income, expenses, and other costs.
• Big money moves that bring more customers to the practice.

Focusing on the cash flow is very important. It will help you understand the operational costs of the practice. Plus, it can also help you create a solid plan to pay any debt related to the purchase of the practice.

Obviously, to buy an optometry practice that generates steady revenue, you need to understand its cash flow first. Of course, if you don’t consider yourself to be a finance-savvy person, you can consult a financial adviser.

• The Engagement Level of the Seller

You must understand that not all optometrists make a plan to retire when their practice’s business is at its peak. In fact, many only choose to sell their practice after their practice’s revenue begins to plummet.

This may happen for several reasons. But in most cases, their revenue dips because they lost their patients to the young practitioners who market their services better.

Yes, if you buy these practices, you could secure them for a lower price. But it would also mean you are buying relatively damaged goods.

So, before you make a purchase decision, check if:

• The seller’s business has been steady in the last couple of years.
• The practice has a steady flow of patients.
• Its finances are rock solid.

This way, you can buy an optometry practice that will generate a steady income for you.

• The Patient Base

Make sure to get the client or patient demographics of the practice before making the final purchase decision. By assessing the patient base, you can:

• Determine whether you can move the practice to a different location without disrupting the client base.
• Get better insights to attract more patients.
• Make better plans for the future.

So, get enough data to evaluate the patient bases of different optometry practices carefully before buying one.

• The Procedures

Not all practices’ equipment and procedures are the same. In fact, some optometry practices may have created a steady patient base due to the type and quality of the procedures they offer.

So, before you buy an optometry practice, check whether its usual procedures are compatible with your overall expertise.

This way, you can offer the procedures that match your expertise without disrupting the operation and business of the practice.

Don’t hesitate to ask for a detailed report on the regular and most popular procedures of the practice from the potential sellers. Doing so will save you a lot of money, time, and resources.

• Your Financial Adviser’s Evaluation of the Practice’s Finances

Purchasing an optometry practice is not a small investment. It’s a huge money burner that may need you to avail a loan from the banks.

But here’s the problem.

Most banks are usually reluctant to offer 100% financial support to buy an optometry practice to those who have little business experience. 

Even if your skills are top-notch, it won’t guarantee a steady revenue if your marketing and business skills are not up to par.

For the banks, this is a huge financial risk. It’s something that most banks would rather not face. If you are a new optometrist, getting financial support from a renowned bank may not be your cup of tea.

If that’s the case, you can consult or hire a financial advisor to guide you. They will help you avail the credit, plan a flexible and reasonable loan payment plan, and help you create multiple financial safety nets.

They can even help you choose the right optometry practices to ensure you have a stable revenue stream after the purchase.

That’s why you should hire a financial advisor to plan your purchase and avoid common pitfalls.

Conclusion

Buying an optometry practice is a huge financial investment. So, you can’t afford to take this lightly. Otherwise, you will end up with a subpar practice that will give you more headaches than profit.

Before you make a purchase decision, make sure to:

• Check the cash flow of the practices
• Investigate the patient’s demographics
• Learn about the most common procedures
• The level of financial activity and engagement in the seller’s practice
• Contact a qualified financial advisor

Do these things, and you should be able to buy the right optometry practice without an issue.