To understand when a good business isn’t a good investment, you need to understand what makes a business good and how they are priced.

A Good Business
When we talk about investing, whether it be buying an optometric practice or a stock, a good business can be easily defined as one that shows revenue growth, easily pay its debts and generates sufficient income to pay its owners a dividend. A good optometric business should have full calendar bookings and illustrate a strong patient base. A good investable business should have the ability raise revenues to keep pace with inflation and the need to pay its people well. A good business should have a board of directors that have a clear vision for the future.

A Good Investment
The reason a good business isn’t necessarily a good investment is based on the price you pay. This is typically referred to as the Price per Earnings ratio for most investable business shares. When purchasing an optometric practice, we often refer to the “multiple”.

EBITA Multiples
Private businesses are typically sold in large portions rather than a share at a time. Regardless, the value of the business is often determined as a multiple of the earnings of that business, specifically the Earnings Before Interest expense, Taxes & Amortization.

However, what is included in expenses will vary. Currently, when selling from one doctor to another, a 3X multiple of EBITA is often used. However, when aggregator corporations are looking to buy, you will likely hear 5X, or higher, as a multiple being used.

I Like 5X Better than 3X
On the surface, a 5X multiple sounds better but it rarely represents a significant difference from the 3X multiple. I know, confusing. The biggest reason is that the calculation of EBITA will vary.

Typically, in a private sale, expenses deducted prior to calculating EBITA does not include any of the owner optometrist direct payments, whereas with a larger corporate buyer, EBITA will be adjusted such that the expenses do include the normal and customary costs of having to hire all optometrists for the clinic.

16.9X P/E on Investments
Let’s shift a bit now to investment businesses. As of September 30, 2022, the S&P/TSX Composite markets had an average price to earnings of 16.9X.

Essentially this means that if you were to buy into the aforementioned market that day, you would have paid 16.9X the average earnings per share of all the companies listed. Think of it this way: It would take you nearly 17 years to recoup your costs if earnings for the business don’t increase.

Is that a good price?
Well, it depends. Let’s look at the stock price and earnings for CISCO, an American-based multinational digital communications technology conglomerate headquartered in California.  This has been a very profitable business, growing it’s net income by 315% from March 27, 2000 to September 28, 2021.  It’s a really good business.

However, if you bought the business on March 27, 2000, when there was a lot of upward speculation for the growth of the company and trading was at a peak, you would have paid 226X P/E. That’s really expensive.

And even with the growth CISCO saw through to September 28, 2021, your investment would still be down 33% on market stock price. That’s a bad Investment.

The Price You Pay
The price you pay for an investment is one of the key determinants on whether or not you have a good investment. It might not be everything, but price really does matter a LOT. If you are buying a new practice, you want to be able to pay it off in a reasonable time period. If you are looking for a good investment, you want a good business at a good price, and when markets are down, there are definitely some good bargains to be had.

Advisory
As your Chief Financial Officer, I am here to help you make smart investments, whether it’s buying a practice or upgrading your portfolio. Helping you understand your money and assisting you in making smart decisions about your debt repayment, insurance protection, tax management and wealth creation, are just some of ways that I work as your fiduciary.

Have more questions than answers? Educating you is just one piece of being your personal CFO that we do. Call (780-261-3098) or email (Roxanne@C3wealthadvisors.ca) today to set up your next conversation with us.

Roxanne Arnal is a former Optometrist, Professional Corporation President, and practice owner. Today she is on a mission of Empowering You & Your Wealth with Clarity, Confidence & Control.

These articles are for information purposes only and are not a replacement for personal financial planning. Everyone’s circumstances and needs are different. 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.

Roxanne splits EWO podcast hosting duties with Dr. Glen Chiasson.


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Your practice is your baby. Even if you purchased it from another optometrist, you have put your own hard work in to make it your own.

You’ve toiled, fretted, and challenged yourself to reach new heights and now it’s nearing the time to move on.

When the time comes for selling, it is critical that realistic expectations are set. If not, the goal may never be achieved.

Healthcare is Pandemic Resilient
Thankfully, the market has not cooled since the beginning of the pandemic which is proof that healthcare is pandemic resilient. Vendors need not be afraid to sell if they believe the time is right for them.

People choose to sell for a variety of reasons. Those who have owned 30+ years simply feel it is time to hand over the reins. Some feel that owning a practice is stressful with HR issues, attracting new patients, retaining existing ones, dealing with landlords, etc.

For others, it is the desperate search for work life balance. After all, managing a practice and a young family is no easy feat.

There are also those external and internal events: divorce, health issues, death, partner disputes, death of a partner or a family member, having to relocate or issues with children. All of which can cause a practice owner to want to sell.

Emotions are Natural – Put Them Aside
Regardless of the reason, vendors do need to enter the sale process with the right mindset. The practice itself represents so much more than patient charts, equipment, and the physical location.

Regardless of how long the individual has been an owner, the practice represents them, their efforts, successes, and failures. It is a symbol of fierce pride and accomplishment.

All these reasons are valid which is why the sale of a practice has an emotional component whether an owner wishes to admit this or not.

The harsh truth is that once the decision has been made, the vendor must be realistic in how the process will unfold and more importantly how a buyer will view their practice.

It is not uncommon for a vendor to believe that the buyer should be grateful to acquire such an amazing practice. However, a buyer, while happy to have the ability and opportunity to purchase the office, also believes they are paying the vendor a fair price.

This is where things get a bit tricky.

Consider the Buyer’s Burdens
During the negotiations, the vendor feels the buyer should agree to all their terms because they are presenting them with an office they can simply walk in to and take over, unlike the vendor who had to work exceptionally hard to establish and build this practice.

The buyer on the other hand, feels that their requests should be accepted because once again, they are paying a healthy price. Whenever money changes hands the potential for ugliness to rear its head most certainly can be expected.

Many vendors believe any purchaser of their practice will be successful if they simply treat their patients well.

This is partially true, but a buyer likely must make some improvements, engage in a marketing plan, and most importantly have the staff rally around them to ensure their success.

Buyers, unlike the current owner are also carrying a significant loan, therefore the room for error is quite slim. If a vendor wants to stay on as an Associate for a period, many will demand 45% to 50% as associate compensation.

While this certainly makes sense given the level of experience and maturity the vendor has, the reality is that if this vendor worked with a large corporation, the compensation would be 40%.

In addition, more times than not, the numbers simply do not work for the purchaser by the time the bank loan is repaid along with the overhead and some type of draw to cover personal expenses.

Post Sale Emotions – Be Prepared
Another expectation that must be addressed by the seller is the relinquishing of control.

They may be your patients and staff today, but on day one of new ownership, these fine people are now the buyer’s patients and staff.

This can be a very tough thing to accept particularly if the vendor wishes to remain working post-sale. Vendors are very protective of patients and staff. They are always worried that the new owner will not be accepted easily.

They worry how staff will be treated. Buyers worry about this too; they worry that they will not be seen as the owner and that staff will constantly run back to the prior owner.

When the vendor wants to stay post-sale, they must accept the changes made by the purchaser regardless of whether they agree or not. It is difficult to change behavours after 20 or 30+ years of being in charge. The vendor must be prepared that their opinion is not required regarding new technology, schedule changes, treatment planning and staff motivation (or lack thereof).

The vendor must also be willing to accept additional growth generated by the new owner. One cannot have regrets when the buyer increases revenue by 20 or 30%.

There will almost always be opportunities for improved efficiencies, expanded hours, etc. It is not a sign that the vendor did not maximize potential or failed to reach a certain level of success.

A vendor needs to understand that it is normal for a level of comfort to set in, particularly when the practice and perhaps even personal debt is paid off or at least nominal.

Selling a practice can be quite emotional for some vendors. It is so critical to be prepared because an owner does not want to suddenly be faced with a good offer and back out of a sale midway through the transaction because they did not prepare themselves psychologically for what happens next.

Get the Right Advisors
Fear of the unknown can be paralyzing, and no one can make the best financial decisions if the proper time was not spent planning for the next phase. Transition planning looks different for every practice owner.

The common thread is the need to proactively prepare for both the financial and emotional aspect.

With the right advisors, vendors can successfully go through the sale of their practice with few battle scars. Change is always scary, but it is also important to remember that none of us are defined by our professional occupation.

There are so many other facets of our lives that we should be aware of and be grateful for. Life post-sale can be exciting if one chooses to make it so.

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie Joachim is Chief Operating Officer of ROI Corporation. Please contact her at jackie.joachim@roicorp.com or 1-844-764-2020.


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Buying & Selling a Practice

The second event of the “Changing Landscapes: Opportunities & Options for Canadian ECPs” will focus on Selling & Buying a Practice and will be held Monday November 1st (7:30 PM Eastern).

The Canadian market has experienced transformational change in the past year.

Major players have had substantial capital injection and new Canadian market entrants are making their play for market share, creating more opportunities and options for Canadian ECPs.

Join leaders and spokespersons from the world of independent optometry supported by B+L and major eye care groups/organizations including IRIS, FYidoctors, Vision Alliance Corporation, OSI/SOI, Eye Recommend and, new to Canada, Specsavers. ROI Corporation, Canada’s leading health practice brokerage will also share their experience.

This event is a must-attend for any practitioner looking to exit their business, start a new practice or formulate a strategic partnership.

Speaker List Includes:

  • Jackie Joachim, Chief Operating Officer, ROI Corporation
  • Dr. Daryan Angle, VP Business Development, IRIS Group
  • Dr. Wes McCann, Central Optometry, ON, Eye Recommend
  • Dr. Michael Naugle, VP Optometric Partnerships, FYidoctors
  • Gord McFarlane, Managing Director of Corporate Development, FYidoctors
  • Dr. Skylar Feltis, YXE Vision Group, SK, OSI Group
  • Dr. Warren Toews, YXE Vision Group, SK, OSI Group
  • Dr. Trevor Miranda, Cowichan Eyecare, BC, Independent Practice
  • Dr. Robert Allaway, Chief Optometry Officer, Vision Alliance Corporation
  • Mike Protopsaltis, Partnerships Director, Specsavers 

The event series will be moderated by Roxanne Arnal, OD and Certified Financial Planner (TM), bringing an informed and unique perspective to the events.

Event registration is now open. Click Here for Details. 

PREMIER SPONSORS

 
SpecSavers  

 

PARTNER & FRIEND SPONSORS FOR THIS EVENT  

 
Digital ECP  

Follow up Events: 

The final event in the series will be held Monday November 8th  7:30 PM (Eastern). 

Career Pathfinders| Making Informed Choices (November 8th)  
Career options and opportunities for both young and experienced ODs have never been greater as new organizations offering unique business models enter the market and established entities respond to the changing environment.
Click Here for Detailed Information.

Registration for the first event Monday October 25th,  “Technology Drivers of Change” is open. 
Click here for detailed information on this event.  

Click here to register for any of the Changing Landscape Events 


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Eye Care Business Canada and NewOptometrist.ca have announced the meeting dates for a three-part series, “Changing Landscapes: Opportunities & Options for Canadian ECPs”.

The three-event series will start on Monday October 25th (7:30 PM Eastern) and will run on three consecutive weeks  i.e. Monday, November 1st  and Monday, November 8th.

The series will debut Eye Care Business Canada’s platform for digital events and feature  industry thought leaders from Canada’s leading eye care organizations, each contributing their perspectives to important topics of relevance to optometrists and optical professionals in the current, always changing, environment.

The event series will be moderated by Roxanne Arnal, OD and Certified Financial Planner, bringing an informed and unique perspective to the events.

Technology Drives Change

The first event (October 25th)  will  delve into the key technology factors expected to impact the future of professional practice in the near term. Tele-optometry, impact of omni-channel selling and remote face trace technology enabling touchless ophthalmic lens dispensing are among the factors to be discussed.

Whether or not professions embrace emerging technologies or avoid them, there is no denying technology’s potential game changing role in both the clinical and commercial side of practice.

Follow up Events: Buying & Selling and Career Paths

Has COVID changed the valuations of eye care practices?

Industry experts will provide perspectives on the current state of play in the Canadian practice acquisition market.

Current owners and astute prospective owners seeking opportunity will hear from and meet first-hand through the virtual platform in the second event Monday, November 1.

Career options and opportunities or both young and experienced ODs have never been greater as new organizations offering unique business models enter the market and established entities respond to the changing environment.

Career Pathfinders: Making Smart Career Choices is the topic of the third event on Monday, November 8th.

Event registration is now open. Click Here for Details. 

PREMIER SPONSORS

PARTNER & FRIEND SPONSORS

 

Limited Premium, Partner and Friend sponsorships are still available.

For organizations wishing to sponsor a virtual table at any of the events, please contact

Admin@vuepoint.ca for further information.

Event Details:

Changing Landscapes Webinar: Technology Drivers of Change

Changing Landscapes Webinar: Selling & Buying a Practice

Changing Landscapes Webinar: Career Pathfinders: Making Choices


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Caveat-Emptor-Buyer Beware

Recently, I had the privilege of delivering a webinar for buyers. I invited 3 owners to join me so that they could share their wisdom with the audience. It was a jam-packed hour of information and conversation about the market, the value of practices, buying during COVID and of course, the reality of ownership.

Many buyers that I speak to are concerned about a myriad of things – practice values, finding the perfect office, understanding goodwill and the great fear of potentially paying too much. That was the impetus for doing such a webinar.

The key takeaways from the session were:

  1.  Have a business plan – as a young banker, I will admit, that I did ask these of buyers because it was a financing requirement. Deep down, I believed that one doctor was buying from another doctor so what else could possibly be required?Fast forward to today. Boy, was I wrong! Age and experience have certainly opened my eyes. The choice a buyer has is to either stay as an employee/associate or become an owner. However simply buying and entering ownership is not a plan. A buyer needs to look at a potential office to purchase and see how many of the boxes are ticked.If a practice meets 70% of what someone is looking for, then this is something worth considering.A business plan will address how the new owner plans to increase revenue, what marketing/social media plans can be implemented, what services and procedures can be added etc. After all, the goal should be to purchase with the intention of improving not maintaining the status quo. However, keeping things as is, is also okay.
  2.  Practice values are not going down. If a buyer is waiting for the market to cool off, unfortunately that is going to be a long wait. In the last 13 years alone, practice values have never gone down. If you are able to purchase a practice below the appraised value, then likely there was a good reason for this.Certainly however, the norm is that buyers are paying the appraised value or higher. Therefore, if one truly wants to own a practice, this thought must be put aside. Now, I am not saying to rush into any purchase, however, if a buyer is waiting for prices to decrease, it will be a very long wait.
  3. Age of equipment or the facility. An older practice will not have the polish or sparkle that a brand new one will. However, when one is buying an old, more established clinic, the true value is in the patient base/goodwill.While the equipment and facilities may be older, this is still what is being used to generate the revenue reported in the appraisal. And more importantly, those coming for treatment are perfectly happy.For example, 2 clinics can both be appraised at $1,500,000. Clinic #1 is 4 years old with state-of-the-art equipment and generating approximately $500,000. Clinic #2 is 20 years old billing $1,000,000 with existing equipment. Which one should a purchaser buy? I know I would go for #2 because equipment can be replaced as well as a new coat of paint to freshen the place up. While it might not be the perfect clinic for the buyer, it is perfectly fine for those who visit the office for treatment. Office #2 has one huge advantage – established patients which produce strong cash flow.After all, cash flow is king (or queen) and definitely pays the expenses, the loan, and the owner.

The best advice we can offer, which was echoed by our panel of experts, is to find something that meets most of your requirements (level of revenue, location, well-trained staff). Then you can take over, expand/improve so it can be perfect for you.

If you wish to listen/watch our webinar, feel free to visit our website, www.roicorp.com or use the following link, https://vimeo.com/582924776/dd272694b8

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie Joachim is Chief Operating Officer of ROI Corporation. Please contact her at jackie.joachim@roicorp.com or 1-844-764-2020.


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Transition

The time has come to sell and hand over the reigns to a new owner. Truly an exciting time but also one fraught with apprehension, nervousness and perhaps a bit of regret.

When an owner makes the decision to sell and continues to work for any period post close, one knows life must be different. But can the vendor accept the changes?

The Emotional Challenge of Selling
Regardless of the reason for the sale, every vendor believes he or she has poured their heart and soul into establishing, building, and maintaining the practice. After all, by the time the clinic sells, years of developing relationships, assembling a good team, creating a brand, and achieving success, are the reasons someone is willing to buy the practice.

But this is where the challenge starts. Handing control over to a new owner after holding this position for many years, often 25 plus years, is no easy feat.

The vendor must be prepared to accept change. New owners will have a new management style, will want to make changes, and will most definitely make their own share of mistakes. Vendors must be prepared to stand by and watch without interfering.

Good Intentions Notwithstanding… Reality Sets In
In the simplest terms, a practice transition is an event or transaction that results in a change in the effective ownership of the clinic.

Transition is all about the existing owner taking a back seat in the clinic while allowing a new owner to shine. And expectation, transition means the vendor will focus on putting the new owner in the best position possible by supporting the team that was once the vendor’s as well as the plans of the new owner.

Transitions are not easy, and they often come with a myriad of finite details. Most vendors hope for synergies between themselves and the buyer. They initially welcome the new energy to the practice. Everyone starts off with the greatest of intentions.

The vendor says they will support the new owner in any possible way and reassures the buyer that the office is now theirs. They are welcome to do as they see fit. The buyer has tremendous respect for the previous owner.

They want to ensure the vendor is happy and assures them their presence is welcome for as long as they wish to be there. But then reality sets in very quickly. Previous owners feel that the new owner is making many mistakes and of course, the new owner is not happy that the prior owner is “stuck” in his/her ways. And so, the dance begins!

Prepare for Change
The best piece of advice we give to vendors is to expect and prepare for change. When they sign the listing agreement, we warn them that the time post close is not going to be easy. Eventually, it can be quite harmonious but like any relationship, finding the synergy and sweet spot of co-existence takes time.

If both parties are truly patient and willing to work at it (just like a marriage), then a mutually beneficial relationship can certainly be the result. A vendor needs to remember that a purchaser now has a significant loan that requires repayment. The new owner may make choices or decisions that are not what the previous owner would make, but that is to be expected. A purchaser also needs to remember that change is never easy.

If you want a vendor to stay, the most important thing is open communication. Deliver messages directly to the vendor, not through staff.

The most successful relationships in life are based on both parties taking the time to share their thoughts, and concerns while also doing their utmost to truly listen to the other person. Strong communication does not take place by accident; planning, idea sharing, and discussions must be scheduled and practiced.

Bottom line
A successful transition does not simply happen. It takes work, patience, and mutual understanding. If both the vendor and the purchaser are willing to have open dialogue and accept that change is inevitable then the success rate increases.

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie Joachim is Chief Operating Officer of ROI Corporation. Please contact her at jackie.joachim@roicorp.com or 1-844-764-2020.


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Every buyer that I have ever met, has the same goal, to buy the perfect practice. Is this reasonable? Emotionally yes, practically no. A buyer can visit 20 different practices and find something wrong with everyone. This does not mean that the practices are not good options. It just means that the buyer will never find the perfect one. News flash: THERE IS NO SUCH THING AS A PERFECT PRACTICE. The best anyone can do is to find one that they like with a good location and potential for improvement. This practice has bones. The buyer can make it perfect for themselves.

The best place to start in your quest for the perfect practice is to be realistic about your strengths and weaknesses. In other words, what are the ways you can bring value to a practice? Before you start looking at the possibilities available, its essential that you think through key personal and market factors.

Many buyers, when looking at purchasing an existing practice should have an appraisal in hand. The appraisal should present the facts that are critical in evaluating whether this is the right opportunity for you. However, many get fixated on multiples of EBITDA. If you are not planning on working in the office and are purchasing for investment purposes, a multiple of EBITDA is more relevant. Because this is an investment, the new owner needs to pay an associate to perform the services. However, it is truly not uncommon for a purchaser to buy a clinic at 10- or 12-times EBITDA because they will be the new owner and operator. Personal payment can be more flexible for the owner versus paying an associate an industry standard. Many may ask as to why they should pay such a high multiple. The answer is quite simple, as an associate, one could make more money. However, the associate never builds equity. For example, if the practice being considered has $100K left after all expenses and the loan payment is made, if the new owner can live on $100K, then why not pay the higher multiple? Afterall, ten years from now, hopefully revenue has increased due to improvements made but more importantly, the new owner has equity in a practice that has been completely financed.

So many times as an appraiser, we do hear from a buyer that the practice is over valued. If a multiple of EBITDA is the way one determines value, this may be a fair statement to someone who will never work in the practice. However, practice values have never declined in the last 15 years. In fact, quite the opposite. Organically a practice will increase at a minimum 5-8%. Depending on location and other critical factors, the increase can be greater. What is most important for a buyer to ask themselves is the following:

• Can I qualify for financing?
• Do I like the actual location? (highly visible, new housing developments)
• What are the patients like? (age, cultural background, socio-economic background)
• Are the staff well trained?
• Can I increase services?
• Has revenue been consistent year over year?

There truly are so many factors to consider. However, if a buyer looks for the perfect practice,
one will likely not be found. Buy a good practice that has a solid foundation that you can build
into your perfect practice. And remember, the ultimate value of a practice is the final price
that is decided between the buyer and the seller.

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie Joachim is Chief Operating Officer of ROI Corporation. Please contact her at jackie.joachim@roicorp.com or 1-844-764-2020.


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When the time comes to take the plunge and finally purchase a practice, there are so many thoughts that race through a buyer’s mind. Everyone is looking for the perfect practice. Unfortunately, it simply does not exist. A buyer can look at 10 different offices and find something wrong with every single one. It is understandable to want the best as this is a major purchase. However, buying a practice requires a delicate balance between logic and emotion.

While some would believe that emotion has no place in a decision this important, in reality, it does. Like it or not, emotion does in fact play a very important role when buying a business. It is critical that a purchaser cannot allow emotion to dictate the decisions that have to be based upon logic. And sometimes, the purchaser should not let logic overtake the decision-making process when emotion is required. The key to this delicate balancing act is knowing how to separate the two, and to recognize when either state may be impacting your decision-making process altogether.

Becoming a well-prepared and knowledgeable buyer is the key to your success. The initial choice to purchase is largely motivated by the desire to better your circumstances. A purchaser is likely tired of working for another doctor. Why build equity for someone else? Why have one’s schedule controlled by another? Why not invest in oneself? Most purchasers have likely reached the point where enough is enough – its time to be the boss. It is important to consider the potential rewards gained from owning your own practice. While everyone has their individual reasons, certainly controlling your own destiny, making more money, having the opportunity to improve your quality of life, and helping others, are just a few of the common reasons. These are all things that most people hope to achieve.

Choosing to buy during a pandemic is truly the time to keep the emotional side in check so that you stay motivated, especially in this economy. There are likely many people advising against the purchase of a clinic. But why would this not be the right time? Interest rates are at their lowest and quite frankly because there are some people who are either afraid or simply do not qualify, you may not be in a competitive situation. This means, you would not need to overpay on a practice that you might have pre-pandemic or certainly one year post pandemic. Fear is important as long as it does not cripple you from making a decision. To be successful, you need to cut a new path to gain success. By no means should you take ridiculous risks either. Ownership is not for everyone. But if you are not prepared to be a career associate, ask yourself if the people giving you negative feedback would still say no regardless of the economy. Trust your instincts. If your inner voice tells you that you are meant to be your own boss, then stop seeking the approval of others and look for guidance from those who are well-informed and knowledgeable.

There are going to be times during the clinic-buying process that you will be knocked off track. You will face situations where deals fall through, you will find it hard to locate any decent practices for sale, or you uncover some issues during your due diligence. These scenarios, plus many others, can surface after you have invested a lot of time, effort, and yes money, to analyze the office. A buyer must, however, have the strength to dust off these little setbacks and carry on towards the finish line or make the decision to walk away. This is definitely where emotions can play havoc on a prospective buyer. On the one hand, you want to stay upbeat and committed to the goal. On the other hand, though, you also need a good dose of logic because you must decide if you can live with some negatives or simply not move forward because it is the wrong deal.

Finally, you may be the best clinician. But you still need to educate yourself and surround yourself with experts. A good accountant, lawyer, and banker are so key to the equation. The right team behind you enables you to further grow the practice you acquire.

Last piece of advice. Please do not think you are an appraiser. Even if you have seen lots of practices, you are still not an expert. For every practice a buyer reviews, guaranteed an appraiser has seen twenty. A qualified appraiser has placed a value on an office based on a variety of factors. You might not agree with the value. That is fine but telling the appraiser they have overvalued the office is simply wrong. If you like the office but do not agree with the value, nothing stops you from making an offer at a price you are comfortable with. It really can be that simple. If your offer is accepted, due diligence will give you the true opportunity to see if the practice really is a good investment. Always remember, the stress you experience as a buyer is very similar to what a vendor also experiences. These are significant transactions and should not be taken lightly.

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie Joachim is Chief Operating Officer of ROI Corporation. Please contact her at jackie.joachim@roicorp.com or 1-844-764-2020.


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Dr. Robert Allaway explains the Vision Alliance acquisition model, who’s behind it, and how it fits a need for practice owners that other models do not offer.


About the Guest

Dr. Robert Allaway is the Chief Optometry Officer of Vision Alliance, a new exit strategy option to help practice owners bridge the gap between full ownership and retirement. Robert is in private practice in Salmon Arm, BC where his practice has expanded over the years from a single location to three locations with four partners and two associates. He was on the Board of Directors of Eye Recommend for 12 years.

Dr. Allaway joined the Vision Alliance team founded by Ken Barbet, former Eye Recommend CEO.  Vision Alliance provides a a unique option for practice owners to exit private practice with flexibility, while removing the operational burden of the practice owner.

 


Episode Notes

Robert explains the genesis behind the formation of Vision Alliance, including the roles of key principals and partners,  including Ken Barbet, Deanna Hansuk  and Patrick Cunningham.

He provides a full explanation of how the Vision Alliance model is centred and designed around  independent Optometry and the practice owner. He explains the flexibility the approach offers to practice owners as well as the ownership opportunity provided to new entrants, and contrasts Vision Alliance to corporate models.

Robert drills down into a good level of detail on what a partnership with Vision Alliance looks like, including how it impacts operations, staff management, practice branding and marketing and more.

The financial model is also outlined, including the extent to which practice owners retain interest and how and when they can cash out.

Best Quote: “Vision Alliance is a bottom-up approach driven by the Optometrist.”

Resources

 

 

Dr. Glen Chiasson

Dr. Glen Chiasson

Dr. Glen Chiasson is a 1995 graduate of the University of Waterloo School of Optometry. He owns and manages two practices in Toronto. In 2009, he co-hosted a podcast produced for colleagues in eye care, the “International Optometry Podcast”. He is a moderator of the Canadian Optometry Group, an email forum for Canadian optometrists. As  a host of  “Eyes Wide Open”, Glenn  looks forward to exploring new new technologies and services for eye care professionals.

Dr. Chiasson enjoys tennis, hockey, and reading. He lives in Toronto with his wife and two sons.

Dr. Chiasson splits EWO podcast hosting duties with Roxanne Arnal.


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Just like anything in life, deciding to sell an optometry practice can be made easier with a little knowledge and a little planning. Knowing your options along with the pros and cons of each can help you make the right decision for you and your family’s future.

So why should an optometrist be more like a dentist? Simple, Dentists receive top dollar for the sale of their practice when they decide to sell. In the past, probably 10-15 years ago, like optometrists, dentists would sell to associates or sell privately. While this seems painless, the problem is that after all your hard work, selling under these circumstances limits your ability to obtain the best possible price. Afterall, the sale of your clinic is your retirement income and it is your family’s legacy. Why should you give someone a discount?

Dentistry Shows the Way for Optometry.

Dentists learned years ago that selling privately or to associates resulted in buyers underpaying for their practices. We are able to substantiate by the data in the ROI database. Part of the problem here is that a buyer comes ready with advisors to support them but who is advocating for the retiring or the selling owners. Banks do not set values, they simply finance the transactions. Lawyers do not set values they simply facilitate the transaction as documented. We want to support you so that as sellers you have a chance to set an expectation and an asking price. This call to action may sound simple but it is not. Many people are not confident enough to represent themselves. Like most owners, you are emotionally attached to your businesses, making it near impossible for you to advocate from arm’s length, a commercial goodwill value of your business. When you deal directly with buyers, it is easy to become empathetic to their age, their degree of indebtedness and succumb to their youthful enthusiasm and eventually sell the practice for substantially less.

An optometry practice is definitely undervalued compared to dental practices nationwide. The question you need to ask yourself is “Why should I accept this?” Your practices are just as valuable as those in the other markets.

This is where we prove our value as brokers. Selling your practice is scary. We are not going to try and tell you otherwise. However, selling on the open market is the cleanest and easiest way to exit. Money is readily available from third party lenders so a seller can often “cash out” and walk away from a practice soon after closing.

Knowing your options when it comes to selling your practice is a must. It will allow you to plan. The more you know the better you will plan, the better you plan the better the exit experience will be. We would be happy to have a confidential conversation with you. There will be no commitment on your part other than to spend a little bit of time discussing your thoughts and asking as many questions as you like.

 

Jackie Joachim, COO ROI Corp

JACKIE JOACHIM

Jackie Joachim is Chief Operating Officer of ROI Corporation. Please contact her at jackie.joachim@roicorp.com or 1-844-764-2020.


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