Whether you’re entering a partnership, signing a shareholders’ agreement, or setting up a joint venture, shared ownership is becoming more common in optometry. It can give you access to capital, support your succession plans, and spread out the responsibilities of running the practice. But the real test of these arrangements is not how they begin, it’s how well they adapt when circumstances change.
Most ownership arrangements are put in place when everyone is aligned and optimistic about the future. The real value of a formal agreement shows up later, when circumstances change in ways no one expected.
Ownership vs. Control
One of the first questions to clarify is whether your ownership percentage actually gives you the decision-making authority you expect.
Your agreement may set different voting requirements for major decisions. Expanding the practice, bringing in a new owner, taking on significant debt, or selling the business may require more than a simple majority and, in some cases, everyone may need to agree.
Getting clear on these issues early can prevent disagreements later, especially when the real problem is simply that each owner has different expectations.
Planning for Life Events
Careers rarely unfold exactly as planned. Someone may want to reduce their clinical hours, retire earlier than expected, or step back because of a health challenge.
Before you sign, or at your next agreement review, make sure you can answer questions such as:
- What happens if you or another owner wants to leave?
- How will a prolonged disability be handled?
- Can someone keep their ownership interest if their clinical involvement changes?
- What happens when an owner retires or dies?
These conversations may feel uncomfortable, but they are much easier to have before a situation happens.
Valuation Matters
If an owner wants, or needs to sell, agreeing on a fair price can become surprisingly contentious. Your practice may have significant goodwill, growth potential, and future earning capacity that each owner may value differently.
For this reason, your agreement should set out a valuation process in advance. Whether you update the value regularly, use a formula or bring in an independent third party when needed, a defined process can reduce uncertainty when an owner leaves.
Contributions Change Over Time
Over time, the way each owner contributes will likely change. One person may take on more management responsibility while another elects to focus primarily on patient care.
As those responsibilities shift, a compensation structure that once felt fair may no longer feel that way.
Review expectations, workload, and compensation regularly. This helps keep the arrangement aligned with how the practice operates today and not just how it operated when the agreement was first signed.
A Business Relationship Deserves Business Planning
Most shared-ownership arrangements begin with trust, mutual respect, and a common vision. A formal agreement does not replace these qualities but rather provides a framework for working through the uncertainty that comes with owning a practice together.
As an optometrist, your practice is often both your career and one of your most significant financial assets. Whether you own it through a partnership, corporation, or joint venture, a clear agreement can help protect your business, your investment, and the relationships behind it.
The best time to work through these difficult questions is before you are facing a difficult situation.
You cannot eliminate every uncertainty. But with the right framework in place, you can face change with greater clarity, confidence, and control all while treating each owner fairly.
Have more questions? We’re here to help.
Roxanne Arnal is a Certified Financial Planner®, Chartered Life Underwriter®, Certified Health Insurance Specialist, former optometrist, Professional Corporation President, and practice owner. She is dedicated to empowering individuals and their wealth by helping them make smart financial decisions that bring more joy to their lives.
This article is for information purposes only and is not a replacement for personalized financial planning or legal advice. Errors and omissions excepted.
