Starting an optometry practice can be an incredible and rewarding journey, but it’s one that requires substantial planning and preparation. Perhaps you are in your final years of optometry school or just hoping to break away from a current practice; for many reasons, opening a new practice is a common goal among optometrists. In the field of optometry, there are many ways to kickstart your career. In this article we will examine the processes and preparations that go into both buying into a current practice and starting a new practice from the ground up!
Becoming a Business Owner
In most cases, optometrists don’t have an additional degree in business. Many people’s initial concern when contemplating
starting or buying their own practice is the fact they have not specialized in business, accounting, HR, etc. A lack of business knowledge is important to be aware of, but in this modern age, there are incredible resources and optometry support networks to help make this big move possible. For instance, local community colleges offer a wide variety of classes, many in the evenings, that can provide more specific business knowledge and instructions. If like most, you do not anticipate having enough time to enroll in classes, there are thousands of online courses teaching everything from Business 101 to masters level courses. These online courses have a wide range of prices, involvement, time commitments, etc., but finding one that addresses your business concerns while complimenting your schedule is certainly possible. Alternatively, if you are not looking for additional formal education, consulting with experts in the field is another great option. For example, the PECAA Cold Start Practice Program, offers incredible mentorship and support to doctors who are in the process of opening a brand-new optometry practice.
The most important thing to remember if you are second-guessing your business knowledge is that the greatest strength comes from communities and teams. Do not underestimate the power of asking for assistance, delegating when necessary and TEAMWORK. The strength of your practice is not solely on your shoulders; assemble a team of skilled staff and/or auxiliary contractors with specific backgrounds and knowledge including accounting, HR, legal, etc.
Starting Your Own Optometry Practice
Whether you couldn’t find a good-fitting practice for sale or prefer starting fresh, starting your own optometry practice from the ground up is an exciting option with immense potential. As with any important investment, the first step to starting your own optometry practice is completing thorough research.
Develop a Clear Vision
Before taking any action, take time to visualize your dream optometry practice and write down your goals. What is your reason for starting your own practice? What are your core values? What do you want your practice to be known for? What kind of team members and patients do you want to attract? Having a clear vision and goals will help you in developing your optometry practice brand, or personality, as well. Your brand and your goals will be your guiding light as you work through all the steps to open your practice, ensuring you don’t stray from what really matters to you.
Write Your Business Plan
Just like every other type of business, your optometry practice needs a detailed business plan. A business plan is a formal document that allows businesses to set specific goals and later, evaluate your business goals based on your practice’s performance, targets, goals and benchmarks. Essentially, it lays the foundation for everything else you need to do to get the practice off the ground. As a business owner, it’s extremely important to have a clear vision and monitor each step of the process – without regularly checking on your business’ functions you could miss important variables, like missing a sales quotas or underestimating the amount of marketing you should be doing. By following a detailed business plan, all stakeholders will know their responsibilities and can monitor each process to ensure nothing is glaringly missing.
Not only are business plans essential for your internal business, they are also required in order to qualify for a loan from a bank. A business plan is universal throughout nearly all sectors and must not be overlooked or taken lightly.
Location and Market Analysis
Before committing to a specific location or even region, it’s important to thoroughly research the market you are hoping to enter. You must consider the affordability of real estate, population statistics, market saturation with competing optometrists, and cost of living, just name a few factors. It’s important to remember that each market is unique and always changing, so additional research on current and future trends in the area of focus are extremely important as well. One professional suggestion is to partner with a local marketing or research firm to best understand the local market and minimize the risks.
Once a general location is established, start visiting areas of town and look for potential office buildings or professional plazas. During this step of the research, it’s important to liaise with local officials and be prepared for any required inspections, filings or permits.
Another crucial aspect of starting a business that is required across all sectors is your business registration. No matter the size or type of business, one must register with local and national agencies to ensure compliance. When registering your business, there are many different types of businesses to consider pursuing, such as a Limited Liability Company, Sole Proprietorship, Partnership or Sub S Corporation. Each type of business has it’s advantages and disadvantages depending on the ownership structure and goals of the company. In addition to filing as a new company, you must also register and comply with the following:
- Internal Revenue Service
- Secretary of State
- Social Security Administration
- Department of Revenue
- Department of Labour
- And others may apply
With this long list of agencies, we highly suggest consulting with a lawyer to ensure compliance and minimize the risks.
Name Your Practice
At this stage, you will also need to select a name for your optometry practice. Just as a person’s name is a defining aspect of their personality and identity, a business’ name is a defining aspect of it’s brand.
It is important to note that optometry practices are typically permitted to use a “fictitious” or “doing-business-as” (DBA) name for marketing purposes — one that differs from their legal entity name. The optometry boards of different states set specific regulations, so before you start the selection process, you should get a list of DBA name requirements from your local board. For example, in California, optometry practices must include the word “optometry,” or “optometric,” in their DBA name. Depending on your location, you may be required to use your DBA name exactly how it is registered, so don’t make a rash decision.
For naming tips and inspiration, check out this guide to optometry practice names.
Assemble Your Team
Once you’ve completed thorough market research, secured a location and become fully compliant with state and national agencies, you’re ready to start the exciting process of assembling your team!
This is an extremely important aspect of starting your business and will take a considerable amount of time, as it should. Start by organizing and complying detailed job descriptions with specific requirements for each position. This will ensure the most qualified applicants apply and will save you time from sorting through too many applications. There are countless job posting sites online – use resources like alumni networks or ophthalmology-specific resources like our comprehensive employee assessment to help determine whether potential candidates are a good fit for your practice, or to evaluate current team members.
Additional questions to consider when planning this human resource component include:
- How many staff members do you need?
- How do you plan to interview them? With whom?
- What is fair compensation?
- Will you only hire full-time employees or part-time as well?
- What benefits can and should you offer?
If you need help answering any of these questions or others that arise during the staffing process, consider investing in optometry HR support.
Opening Your Practice Doors
As expected, a blog post cannot provide every detail or process you should consider before opening the doors to your new practice. Without bogging you down with too many activities, the following list (though certainly not complete) can help gauge the work and time needed before making this leap:
- Research and purchase required equipment and supplies
- Invest in malpractice insurance
- Design and decorate your optometry office in line with your overall brand
- Select the inventory and brands you want to carry at your practice
- Establish vendor accounts
- Formalize and execute an optometry marketing plan
- Organize and prepare systems for maintaining accurate medical records
- Create and maintain a professional optometry website and social media platforms
- Establish and prepare payroll, bookkeeping, computer and phone networks
- Confirm your practice’s pricing services and materials
- Put systems in place for patient scheduling and patient flow plans
- Train your team
Buying into a Practice
If starting your own practice from the ground up sounds overwhelming, there are other options to consider. Buying into an existing optometry practice can be a faster, simpler and less expensive route.
Below are a few of the key reasons people choose to buy into an optometry practice rather than start one from scratch:
- Less up-front, start-up costs (real estate, equipment and inventory, licensing and insurance, etc.)
- Trained and knowledgeable staff.
- An established patient base = immediate cash flow and profit. Oftentimes, less than 5% of patients will be lost with the transition.
Here are two of the most common paths to buying into an optometry practice:
- Complete Purchase: A complete purchase is possible when a doctor has an entire practice for sale. Practices for sale can be found online through various listing websites, with options throughout the country. A sale price is presented to the potential buyer, negotiations take place, and if the selling price is agreed upon, the buyer finds the necessary financing and if successful, becomes the proud new owner of an optometry practice.
- Partial Purchase: If buying an entire practice is not financially viable or not your goal, you can purchase a partial practice. Depending on the agreement or offer, owners can purchase any percentage of the business and be responsible for their share. Partial purchases are often much easier to complete as it’s much easier to qualify for smaller loans. This may be an especially attractive option for those freshly out of optometry school.
An important reminder when considering purchasing an existing practice, in full or in part, is to always have a professional appraisal done on the practice before making any big decisions.
Importance of Community and Networking when Starting an Optometry Practice
Just like any other facet of life, harnessing a sense of community and support will always be beneficial to you and your practice. Meeting and networking with other optometrists is absolutely essential to ensure your sustainability in the field by learning and sharing best practices and experiences. Not only will this provide you with invaluable professional experience, it will have countless personal and professional benefits for you and your business. At PECAA, we provide optometrists with countless resources to better their business, help their practices run more smoothly and more effectively, as well as host many great networking events both online and throughout the country! The holistic support offered to PECAA members will help ensure any optometry practice, whether just starting out or transitioning to new management, is set up with all the tools, resources and training needed for success.