The choice to sell your optometry practice involves more than just money. The process of selling your optometry practice is lengthy and involves more than just finding a buyer and settling on a price.
Before you start the process of selling your optometry practice, assess its existing status from an outside perspective. Therefore, you must consider the practice’s value. It’s best to start planning 1-3 years before you plan to sell your optometry practice.
Below, we have listed the steps you must take to sell your optometry practice and important factors to consider to get the best possible outcome.
What Are the Factors to Consider Before Selling an Optometry Practice?
Certainly, there are multiple factors to consider besides the worth of your practice. These include:
Set a Realistic Price
Understanding the value of your practice is one of the most important factors in selling an optometry practice. The fair market value calculated through the assessment should be reflected in your asking price. Finding a buyer can be challenging if the price is unreasonable.
Organize Administrative Documents
Maintain well-documented business procedures, review your open and closed files, and update your patient management systems. Buyers are more drawn to a well-organized practice.
Identify Your Perfect Successor
Consider what you would expect from a new owner. Think about their professional ideology, business expertise, and reputation. Choosing your top priorities can help you find the best candidates and is an important step in hiring for your optometry business.
Mention Your Rights Under the Sales Agreement
Collaborate with your lawyer to create a final sales contract that protects your interests. The roles and financial responsibilities of both the buyer and the seller should be stated in the agreement. It should also contain accurate terms for the change.
How To Sell Your Optometry Practice Successfully?
Now, if you are sure about selling your optometry practice, you need to do the following things to sell it successfully:
Understand the Process of Valuation
You must understand that every practice is different and has its own USP, such as locations, physicians, or even profit margins. You could get a rough idea of the average sales price by looking at the most recent sales at your locations.
However, the majority of optometry practices are evaluated using a multiple of EBITDA or seller’s discretionary earnings. A buyer will consider multiple aspects, such as your location, local competition, patient demographics, lease conditions, etc.
Identify What Buyers Are Actually Looking for
Buyers crave more than monetary value. They want a profitable company. This involves an established patient base, a stable team environment, and effective procedures.
Analyze your current systems closely. Is there an order at your front desk? Do you have a written training procedure? Are your patient memory and retention numbers reliable?
A buyer would prefer to enter a predictable environment rather than a chaotic one. The intention is to provide a steady, non-risky business.
Choose the Right Sales Framework
Whether it’s an internal or external transaction, it’s important to tailor your preparation for a sale. There are multiple reasons to do so, which include tax consequences.
The sale price is just one aspect of the agreement. Equally important are the conditions, including when, how, and how the money is paid. Is the deal entirely cash?
Moreover, it is important to incorporate concepts for lawfully lowering taxes into your planning process before the sale is finalized. The tax burden depends on how assets are allocated.
Prepare an Exclusive and Confidential Agreement
It is necessary to sign an exclusive and confidential agreement with the buyer who wants to take up your optometry practice. This agreement will ensure that the parties will protect the privacy of the information shared.
Furthermore, it also ensures the exclusivity of discussions for a certain time to avoid conducting research and incurring expenses while the other party negotiates with a third party.
Resolve Operational Issues Before the Sale
It could be out-of-date technology, excessive employee turnover, or negative online reviews. Fixing these problems now is preferable to defending them afterwards.
Many optometry practice sellers think everything can be handled later, or they assume that the buyer will overlook the gaps. In reality, smart buyers are emotionless and careful.
Update your online presence. Improve your communications with patients. Analyze how you handle recalls. Update your scheduling software, if needed. Resolving the visible negative points can increase your valuation.
Final Thoughts
It’s time to take action if you have been thinking about selling your optometry practice. As previously said, optometry practice owners begin the sales planning process 1-3 years before they really decide to sell. The most important thing you can do to sell your optometry practice today is to raise its value. You can also consult a qualified business intermediary to help you with your optometry practice selling journey.
