Although there are many similar aspects between buying an optometry practice and buying most other kinds of big-ticket businesses, one thing that sets them apart is the vision. It is imperative that you have a clear vision of what you want in a practice. The kind of lifestyle and workload are two big things to consider. Map it all out before you begin your search. You might be tempted to overlook some undesirable aspects of the business that seem minor but be careful not to bend too much.
Lenders' Perspective on Optometrists: Experience, Debt, and Financial Factors
Lenders favor optometrists who have been working for at least two years after graduating. It’s never too early to start looking for your ideal practice in your ideal location. Plus, most lenders do not consider a two-year work history the end all-be-all.
If you are working with an experienced team, you are likely to make the purchase. It is no secret that optometrists acquire a hefty amount of student loan debt and buying an optometry practice will only add to your debt. The good thing is lenders are aware that it costs quite a bit to become an optometrist and student loan debt alone will not stand in your way.
The best way to look good to lenders is to have at least a 680-credit score, minimum credit card debt, and personal tax returns that show acceptable levels of income.
Building the Right Team and Making Informed Decisions for Optometry Practice Purchase
The buying of a business is an intricate process and you should have a team of people to help. Attempting to do this alone without the right team of advisors can be fatal and impractical. Your team should consist of a lawyer and an accountant, both of whom are experienced in optometry practice purchases.
Purchasing a practice from a seller who isn’t represented by a professional optometry sales practice broker, you may end up wasting time, energy, and money. A broker will already have a comprehensive appraisal of the practice detailing everything you as the buyer would want to know.
Most people might tell you to aim low, to not bite off more than you can chew, and to keep the debt low. However, that may not be the best advice. The truth is the more expensive practice is to purchase, the more profitable it may be. It is easy to be misled by fancy metrics and misleading numbers.
It is imperative that you do your due diligence both legally and financially. Understand the practice’s profit as well as its outgoing expenses and overhead costs. The practice should have an adequate inventory of frames, lenses, and contacts for your patients. An accurate eyewear inventory should be included in the valuation of the practice. It’s always a good idea to get a second opinion on the appraisal of the practice. Do not solely rely on the appraisal provided by the seller’s broker.
Conclusion
The best way to avoid these potential pitfalls when signing a commercial lease is to have an experienced attorney help you. Trying to navigate the intricate process of negotiating a commercial lease on your own can be very risky and may jeopardize your practice. Consulting an experienced attorney can protect your practice and save you thousands of dollars in profit.
Frequently Asked Questions
Q: When should I start looking for an optometry practice to buy?
A: It's never too early to start searching for your ideal practice in your desired location. Begin exploring options as early as possible to allow ample time for research and decision-making.
Q: How important is work experience to lenders when purchasing an optometry practice?
A: Lenders generally favor optometrists who have been working for at least two years after graduating. However, a two-year work history is not always the sole determining factor. Working with an experienced team can increase your chances of securing financing.
Q: Will my existing student loan debt hinder my ability to purchase an optometry practice?
A: While optometrists often accumulate significant student loan debt, lenders understand the costs associated with the profession. Your student loan debt alone should not impede your ability to obtain financing. However, maintaining a good credit score, minimal credit card debt, and acceptable income levels will enhance your appeal to lenders.
Q: What kind of team should I assemble when buying an optometry practice?
A: It is crucial to have a knowledgeable team of advisors to guide you through the purchase process. Seek the assistance of an experienced lawyer and accountant, specifically familiar with optometry practice acquisitions. Additionally, consider working with a professional optometry sales practice broker to ensure comprehensive evaluations and avoid potential pitfalls.
Q: Is it advisable to purchase a more expensive optometry practice?
A: While conventional advice may suggest aiming low and keeping debt minimal, the profitability of a practice can often align with its purchase price. It is vital to perform thorough due diligence, evaluating the practice's profit, outgoing expenses, and overhead costs. A comprehensive inventory of frames, lenses, and contacts is essential, and obtaining a second opinion on the appraisal is wise.
Q: How can an experienced attorney assist in negotiating a commercial lease?
A: Navigating the complexities of negotiating a commercial lease alone can be risky and detrimental to your practice. Seeking guidance from an experienced attorney can safeguard your interests, protect your practice, and potentially save you a substantial amount of profit in the long run.
Note: When making important decisions regarding the purchase of an optometry practice, always consult with professionals and consider individual circumstances for personalized advice.
At Dental & Medical Counsel, PC, we understand navigating the legal process can be tricky. We believe every doctor deserves the best advice and service so doctors can do what they do best, treat their patients. We make their lives easier by providing expert guidance, so they can focus on their personal and professional aspirations.
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About Ali Oromchian, Esq.
In addition to practicing law for almost 20 years, Ali is also a renowned speaker, throughout North America, on topics such as practice transitions, employment law, negotiation strategies, estate planning, and more! Ali has helped hundreds of optometrists realize their professional goals and looks forward to aiding you in navigating the legal landscape.
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