You Can Afford the Practice of Your Dreams

Optometric Management, Sep 2005 by Milburn, Timothy

In both cases, we made it to the closing table for no more than $750. For the first practice we owed a 5% down payment. We borrowed the money from a family member and refunded it days later when the bank funded our credit line. The bank would not fund the credit line until we closed on the sale. For the second practice, we owed a $1,250 closing fee to the bank for the SBA loan-processing fee. Wc signed over a check to pay those fees at the closing table and we took over the second practice the same day. Within 24 hours, we had recovered 100% of the closing costs with revenue generated from seeing patients in the new practice. But if either of these deals had collapsed at the last minute, our exposure would have been no more than $750.

Plan for the worst, expect the best

Before you borrow an enormous sum of money, it's smart to plan for a doomsday scenario. This eases anxiety. It's better to know whether you can handle loan payments if there is a big drop in business. What if the local economy plunges? What if patients leave the practice? What if ownership transition fails? Could you sustain a 35% downturn in the gross revenue? If your business plan could not withstand this type of stress, then I would pass on the deal.

Now that you've found your dream practice, negotiated the best price, found your financing, and planned for the worst start expecting the best. Design a practical business plan that will set your new practice apart. Why would anyone come to you and trust you with their eye care? What will make your practice better or different than your competition? In our case it was technology. We offered digital photography as part of a routine exam and we quickly installed a state-of-the-art edger to offer fast, more convenient service. We also opened the office for Saturday and evening hours.

Use your past business experience to your advantage. What worked or did not work in your last job? Apply those experiences, and chances are, you'll find a wealth of business knowledge that you may be taking for granted.

As clinicians, we have demanding jobs. It's not easy to manage caring for patients and making sound clinical decisions, all while managing student loan debt and other personal obligations. Buying a practice might seem like a very intimidating prospect when added to your current responsibilities. But for me the experience has been liberating. Owning my own business has given me the freedom and ability to manage my professional life more easily.

If you are dreaming of private practice, it is possible to find the practice of your dreams. And yes, you can afford it. And yes, you can do it.

BY TIMOTHY MILBURN, O.D.

Medina, Ohio

Dr. Timothy Milburn is a graduate of The Ohio State University College of Optometry. He is in group practice in Medina, Ohio and Wooster, Ohio with his wife, Dr. Annamarie Milburn. Visit his website at www.drsmilburn.com