The decision to set up an optometry practice is a challenging one. From choosing the location to establishing how to handle patients to getting financing, it’s a decision that should be well-thought. The decision to exit the practice will be nothing less, if not more challenging.
Here we look at what you need to know when selling your optometry practice. Continue reading to learn more.
What's Your Standing in the Market?
Whether you want to sell a part or all of your practice, you must be able to determine your business value. After all, you will not want to receive anything less than your practice’s worth, right?
One of the best ways you can calculate your practice's value is by understanding what you’re selling. Ideally, a business’s value (your practice included) is determined by how effective and efficient it can produce a great net.
A business that can produce a great net will attract more potential buyers and, ultimately, a higher price. Knowing how to value an optometry practice is a niche set of skills, so finding a professional may help to get not only the most accurate results but an understanding of these numbers and why they are what they are as well.
Do You Need a Broker to Help You With the Sale?
Now that you know your business's value, it’s now time to embark on finding the right buyers. While you can handle the sale process yourself, the truth is the process will be much easier and quicker if you let a broker handle the selling process.
After all, you’ll need time to see patients, and so you may not have time to check email and answer calls from potential buyers.
Practice brokers will play a critical role in the sale process, including:
- Determining the best asking price
- Creating an in-depth prospectus of your practice
- Vetting or screening potential buyers
- Work alongside attorney to develop legal documents
- Market the practice confidentially to ensure patients and staff don’t know about the sale
Ultimately, allowing a practice broker to handle the sale process will make the process less stressful and lead to a better price.
Do You Have Realistic Expectations?
Most often, your practice’s value projections will be higher than the actual asking price. After all, a business owner is more likely to exaggerate the value of their practice. It’s understandable, though. You’ve dedicated your time and resources to creating your practice, and you would expect the best when selling it.
You must remember this when setting the asking price. Your practice’s value will be between three and five times your gross revenue. Consult financial analysts before deciding your asking to ensure you have realistic expectations.
How Has Your Practice Performed in the Last Three Years?
The last three years play a critical role in determining your practice’s value. The business valuers will look at the financial statement and tax returns during this time to determine whether the practice is growing, declining, or is at the same level.
As expected, a practice with a forward trajectory will attract more buyers and a better price. On the other hand, potential buyers will avoid practices that have shown a decline in the last three years.
What is the State of Your Equipment?
Potential buyers will also be looking at your practice’s equipment. Ensure that you have up-to-date equipment. Just like a renovated business will attract more potential, a practice with modern professional equipment will make even hesitant buyers change their minds.
Planning Your Exit Strategy
As with other business owners, optometrists struggle to cut down on their careers as they get older. That’s why it is common to see optometrists who continue to work even when they cannot see their patients well.
The obvious explanation is that these optometrists love their work - that’s why they continue to serve patients even in their 70s or 80s. It could also be that these optometrists don’t know how to plan an excellent exit strategy. Also, others choose to continue working since they can’t afford to stay idle.
Whichever the case, consulting an attorney or an optometrist consultant will help you plan your exit carefully. If you are a solo optometrist, slowing down your operation as you get older is unlikely.
Since getting the right buyer for your practice will take time, you must start preparing early enough. While many people may be interested in buying an optometrist practice, it’s unlikely that you’ll immediately get a person willing to buy your exact business.
To convince potential buyers that your business is right for them, you need to carefully prepare your practice for sale, which requires strategy, money, and time.