Every optometric practice evolves through distinct financial seasons, each with its own priorities, challenges and opportunities.
Start Up: Planting the Seeds
Location, location, location! Always start with good fertile soil. Focus your launch phase on building infrastructure, attracting patients and establishing your brand.
Because your revenue will likely be low and unpredictable, you need to be mindful of your cash flow and debt management. Ensure that you have a sufficient line of credit and payment terms for equipment, inventory and leaseholds. Don’t forget about insurance – especially business office expense disability coverage – you’ve committed a lot to this endeavour.
Take this time to build out your ideal operational systems. Focus on developing deep client relationships, a referral network and training of ideal staff.
Tip: Negotiate favorable vendor terms. Review the cash flow impact of leasing vs borrowing. Ensure you have adequate insurance coverage.
Growth: Plant Development
As you gain traction and patient volumes increase be sure to continue to fertilize your growth.
Reinvest into technology, staff and continual marketing. Consider adding specialty services that align with your patient base. Review your operational systems for efficiency and ensure you have sufficient support staff.
Great staff are worth keeping, consider adding benefit and retirement savings programs.
You always have to be thinking ahead to ensure the office is ready for additional patient needs.
Tip: Strategic reinvestment leads to continued growth.
Mature: Harvesting
The true beauty of a mature practice is that it creates a regular and growing income stream. Don’t take patient loyalty for granted. All relationships need continual care and appreciation.
Your size may permit better vendor pricing and terms. Consider purchasing your own clinic property with excess revenue. Look to other investment options, like corporate owned life insurance, to create a tax free savings opportunity.
Ensure that you understand your financial statements and keep an eye on your performance.
Tip: Keep an eye on your profit margin. If you aren’t continually profitable, you can’t continue to service your patients at the level you desire.
Succession: The Next Harvest
Transitioning ownership can be challenging. Planning ahead can ease the emotional strain and ensure that you are maximizing your financial success. This is your opportunity to preserve legacy and ensure continuity for all the people you have cared for these many years.
If you’re looking to step into your transition through partnership, a comprehensive joint venture agreement that addresses various triggering events and considers the use of insurance for emergency buy/sell is critical. Every good business marriage needs a signed contract. Be sure to download our Buy-Sell Agreement Checklist [https://c3wealthadvisors.ca/buy-sell-agreement-checklist/].
Understand your practice value, update your clinic appearance and equipment, ensure that you have reviewed tax planning opportunities.
Tip: You don’t know what you don’t know. Now is the time to reap the benefits of your years of sacrifice and success – let other’s help you to ensure that you have considered the impact of your various options.
Conclusion
Throughout your business ownership journey you will have many questions and opportunities to harness knowledge from those who have gone before you. Engage advisors and mentors to help guide you along the way. Perform financial audits and review your overall costs to ensure practice profitability – only through your success can you provide a level a care that your patients deserve.
Have questions? Don’t know what questions you should have? Roxanne has lived through all the seasons in her optometric and financial planning careers. Reach out via email at roxanne@c3wealthadvisors.ca or call 780-261-3098 to book a conversation.
Roxanne Arnal is a Certified Financial Planner®, Chartered Life Underwriter®, 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. Errors and Omissions exempt.
ROXANNE ARNAL,
Optometrist and Certified Financial Planner
Roxanne Arnal graduated from UW School of Optometry in 1995 and is a past-president of the Alberta Association of Optometrists (AAO) and the Canadian Association of Optometry Students (CAOS). She subsequently built a thriving optometric practice in rural Alberta.
Roxanne took the decision in 2012 to leave optometry and become a financial planning professional. She now focuses on providing services to Optometrists with a plan to parlay her unique expertise to help optometric practices and their families across the country meet their goals through astute financial planning and decision making.
