In Part 1 of this series, we discussed all the things you need to know about starting your cold open optometry practice. That is, we discussed all the things you need to know except for financing and marketing. Part 2 is dedicated to those two important parts of opening your own optometry practice.

Financing

Financing is the most important part of opening your practice. Without financing, you might not be able to open your doors to practice your profession.

There are many factors that play a part in whether you can qualify for financing.

Plan Ahead

For at least the year before you plan on opening your practice, cut back on your personal expenses and don’t add any additional debt. You may be concerned about student loans but they will not keep you from pursuing your dream as there’s a difference between “good debt” and “bad debt.”

Student loans are not considered bad debt. They are a type of good debt since the money you borrowed was for the purpose of allowing you to achieve a goal. It is what allows you to now accelerate your income potential.

Bad debt is consumer debt—like credit card debt and monthly payments on luxuries. Bad debt drains your resources and does not provide you with opportunities to increase your income.

If you wait too long after graduation to open your own practice, thinking you will reduce your student debt before you take out a new business loan, you may find yourself increasing your consumer debt.

If you want to own your own private practice, make a plan and stick to it. That plan needs to include financing for your cold start optometry practice. You need your plan together before approaching lenders.

Lender Requirements

Not all lenders will have the same requirements. Nearly all will require you to provide documents that show how much money you need, what you need it for, and your plan for repaying the loan. The lender will need:

• Proof of Licensing. Some lenders require you to be licensed as an optometrist for one year prior to approving funding for a new practice. There are exceptions to this principle, so if you want to obtain funding and open your own practice immediately after graduation, begin preparing your financial documents as soon as possible.
• Tax returns and financial statements. Lenders will need three years of tax returns. They will also need detailed financial information from you to show you are responsible for paying your debts on time.
• Business plan. You must provide a detailed business plan. Include a pro forma statement that shows your projected revenue for the next one to two years. Lenders need to have documentation to show them how you plan on paying back the loan.
• Credit score. You need to have a history of good business credit and an overall good personal credit score.

Optometry-specific Lenders

There are optometry-specific lenders who may be willing to fund 100 percent of the costs of opening your cold start new practice.

The terms of this type of loan typically allow repayment over 10 to 12 years. The payments are graduated, so you have time for your practice to grow and for your cash flow to increase before you are required to start making significant monthly payments.

Small Business Association

The SBA often has low-interest loans for start-up businesses. Find out how you can qualify and compare interest rates and terms with other lenders. The SBA also offers free help with writing your business plan, establishing your business name, purchasing business insurance, and obtaining retail, tax, federal, and state ID numbers.

Small, Local Banks or Credit Unions

Each bank has its own loan requirements. Small banks are often easier to work with and may be more willing to work with someone who wants to become a practice owner. This may be particularly true if you can show there is a need for an optometrist in the community.

You may be required to show proof of income from another source other than what you expect to have from your practice. This may mean you need to work two or three days a week for another optometrist while you are building your own business. This will show the lender you have some guaranteed cash flow.

Credit unions often have lower fees and interest rates than big banks or local ones. Repayment terms may be individualized to meet your needs.

Plan for the Unexpected

Unexpected events will happen. There may be a construction delay. Permits may not be issued in a timely manner. Expect and be prepared for the unexpected.

Marketing

Develop Your Brand

You need to have a logo that identifies you and your brand. Use this on your business cards, letterhead, envelopes, educational brochures, and any other piece of advertising.

Freely Give Out Your Business Cards

Always, always have a supply of business cards with you wherever you go, whether business-related or just for personal reasons. Hand them out at every opportunity.

Introduce Yourself to the Community and Have a Grand Opening

You can kick off your practice with a grand opening. The way you advertise this and the type of party you have depends on your demographics. If you hope to primarily have a pediatric practice, you may want to have a carnival-type environment in the parking lot.

If you are catering to adults, you may want to have quiet music playing in your reception area and serve cheese and crackers and possibly wine.

Vision Source offers its members guides to planning open houses.

Online Presence

Not only is it important to build a website but it is important to be visible on social media like Facebook, Twitter, Instagram, LinkedIn, etc. These are great places for post-holiday information as well as awareness promotions for certain conditions like cataracts, dry eyes, UV protection. Post new updates two to three times a week.

By knowing the demographics of your target audience, you can tailor your Facebook and Google advertising to patients based on their age, gender, and other specific characteristics.

Connect with Primary Care Physicians

Send gift baskets to primary care physicians in your area and follow up with a personal note. The purpose is to get acquainted and inspire referrals for things like diabetic eye exams.

Community Involvement

Host a booth at a health fair. Volunteer to help at schools or retirement communities with eye exams. Sponsor a little league team that will fly a banner with your name or put your name and logo on their uniforms. Join the Rotary Club and Chamber of Commerce. Host an art show. Invite other business owners to your practice after hours for a drink. Support as many local causes as you can. Attend community events.

Use Online Technology

Online tools for patients to access their confidential electronic health records (EHR), make appointments, and send messages to you are marketing tools that will attract millennials. The older populations are learning to also take advantage of these tools.

Dental & Medical Counsel Can Help with Your Cold Start Optometry Practice

Building a cold start optometry practice can be rewarding emotionally and financially. Using professionals to assist you can make the difference in success or disappointment.

At Dental & Medical Counsel, we have helped hundreds of optometrists and other healthcare professionals with their start-up business practice. We offer a complimentary consultation with attorney Ali Oromchian where we can discuss your needs and how we can help. Contact us today!