Plants growing on piles of quarters

I received a revealing financial statement the other day. From a doctor who practiced as a phenomenally successful associate for many years. As with most Associates, the ownership motive was a large part of her career plan.

The adventure into practice ownership began about three years ago.

She was fortunate enough to be able to locate a property for sale which eliminated the landlord threat. There are too many providers in the immediate area, yet the practice is generating about $750,000 annually. That is about 20 to 30% more income than the average new startup at this early stage.

Data reveals that annual gross income for a three-year-old cold start is under $500,000. There will always be outliers and exceptions.

Let’s look at her financial journey:

  • The last year’s net income (as an Associate) was ~$301,000.
  • First year as an owner net income was ~$5,000.
  • Second year net income was ~$160,000.
  • Third year net income will be ~$225,000

And this is a success story for a three-year-old start up!

Let’s do the math:

  1. During the first three years of ownership her total net income will be ~$400,000.
  1. Had she remained a successful associate, her net income for the last three years would be over $900,000. More likely over $1 million!

What? That’s 60% MORE net income working as an associate versus an owner!

 Now let’s talk about the time invested to start and operate this new practice. I spoke about this in previous articles titled “Ownership Hours” and it is easy to invest 1,000 ‘sweat equity’ hours in the early years.

For this client, I estimate that she invested almost 2,000 hours of unpaid ownership hours. What could she have done with that time had she remained an associate?

Yes, if she were to sell the practice today there is some goodwill to be sold and that will be the return on investment in exchange for the ownership hours invested.

Pride of ownership has no price, and it cannot be appraised.

 Cash flow can be measured.

The law of diminishing returns suggests that goodwill will peak at some point and then because she is not cashing in and realizing the capital gain of the goodwill, each year she does not sell, the time-adjusted present value of her hours goes down.

Ask your accountant about this. If they do not understand, please ask me.

While she is above average and doing very well in my view, she is frustrated, and the economics of ownership are not working out for her.

The staff burden is enormous and that is why she called me the other day.

“Give it another two or three years” is what I suggested, but I do not think she will wait that long.

She is likely to sell the practice and keep the building to collect the rent and go back to being an associate.

They call it freedom from ownership.

No hassles, no staff problems, no landlords, no stress.

Ask yourself; is it better to be an owner or to be an associate?

Jackie Joachim, COO ROI Corp


Jackie has 30 years of experience in the industry as a former banker and now the Chief Operating Officer of ROI Corporation. Please contact her at or 1-844-764-2020.


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As a new business owner who purchased her first practice, I have discovered the need for a multifaceted strategy. In order to be successful in the eyecare community, you must be able to compete with online retailers, other small businesses and large corporations. You must differentiate yourself from others by delivering patient satisfaction, competitive pricing, technology and practicing the medical model.

Here are four key strategies that are critical for a new practice to succeed:

Nurture good doctor-patient relationships and communication. Patients need to be able to relate to their doctor, whether it’s via small talk in the office about the local football game or through conversation about your family. Patients want to make that connection. Otherwise the patient can go anywhere and get his or her glasses changed a quarter diopter and not return the following year. If a patient feels comfortable with you they are more likely to return and refer friends and family. It gives you a competitive edge to develop a personal relationship with patients that many large corporations are not able to achieve.

Offer competitive pricing of products. Patients want to know they are getting the best products at the best price. There is a lot of competition in the eyecare marketplace. Business owners need to provide affordable pricing of products to keep patients in the office. Consider sales during the year to target the type of patient you want. For example in the late summer or early fall consider offering a back-to-school eyewear discount.

Deliver medical eyecare—and take time to educate patients about it. Patient retention is important for a successful practice. Take an extra minute with patients to fully explain why they are experiencing their symptoms and how you will help alleviate those symptoms and treat the underlying problem. Many of my patients have been to other eyecare practitioners who have not taken the time to do so. When you show you care, patients develop loyalty.

For example, if you have a glaucoma patient in your chair, describe to the patient what glaucoma is and how you are at greater risk of developing the disease if others in your family have been diagnosed with it. Simple illustrations in your office on medical eyecare conditions can provide effective patient education. These educational conversations are essential for patient retention.

Practicing medical eyecare is the key to a successful optometric practice. Patients return upon recommendation and refer others. Medical eyecare is also a revenue booster due to the need for follow-up visits and ancillary testing. Offering these services differentiates you from other eyecare practitioners who just sell eyewear.

The referrals you generate from primary care practitioners also is a win for the independent OD. For every diabetic patient I see in my office, I write a letter describing the eye exam findings, even if there is no diabetic retinopathy. Doing this is the right thing to do, but it also is free advertising to other doctors on the quality care you provide so they will continue to refer patients.

Invest in Advanced Technology. Investing in technology is a no-brainier. It produces revenue and provides quality care to your patients. Patients will be amazed at the new technology and know they are getting state-of-the-art care. By having this technology you are also differentiating yourself from other offices that do not have such instrumentation. To be able to show a patient what a chorodial nevus looks like is a great educational tool that also allows you to monitor the progression of the condition. Patients will return for a follow-up exam because you have a personal record for them–and you can bill for these photos, too!

As a business owner and doctor, you must be able to correlate the business aspects of optometry with eye diagnoses to generate revenue and have a competitive edge in your community. Implementing these four strategies will help put your practice on a path to growth.

What important business lessons did you learn during your first year of practice ownership?



is the founder of Corporate Optometry, a peer-to-peer web resource for ODs interested to learn more about opportunities in corporate optometry. Canadian ODs and optometry students can visit to learn more.


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