Establishing and building a successful practice is a dream for many optometrists, but it’s not for the faint of heart.
Whether purchasing an existing practice or starting one from the ground up, dedication, passion, creativity, hard work and business savvy all matter. The most successful practitioners are those that think like entrepreneurs. And yet, learning how to run a business and manage money isn’t something that most optometry schools spend much time on, if any.
But running an optometry practice is a business, one that requires the expertise of a trusted team: a banker, tax accountant, lawyer, and financial planner.
Getting expert advice
David Shilton, Senior Manager Business Segment Development, Business Banking, TD Bank, suggests starting early in your career and establish a financial advisory team to provide financial, legal and other advice as you grow. Ideally, you look for experts with experience working with optometry practices and other healthcare professionals, such as doctors and dentists.
“The key is to find people who can anticipate your needs, who will take the time to explain things and who answer your questions so that you really understand what they are telling you,” says Mr. Shilton. “Nodding and smiling will only get you so far.”
Your financial advisors should also show you a path towards your goals, especially when paying off student loans early in your career.
“Pay down as much student debt as possible while working as an associate so that you are not carrying the burden of debt,” Shilton continues. “You should also know your long term objectives and the type of financial risk you’re willing to carry. For some, owning their own practice is the goal while others look to becoming an associate or corporate employee.”
The importance of getting professional financial advice cannot be stressed enough. The most successful healthcare professionals recognize early in their careers the importance of working with experts.
Four Rules for financial planning
Smart financial planning – from obtaining credit to managing cash flow and debt – is integral to the successful foundation and management of a private practice. Once your financial advisory team is in place, your first four priorities should be the following if your goal is to purchase or start an optometry practice:
- Pay off your student debt first – It’s not uncommon for optometry students to graduate with a significant debt. Some graduates have to budget for significant monthly student loan payments each month. Banks look for people that demonstrate a good history of repayment of existing debt when considering whether to provide additional financing for practice start-up. The good news is that when looking for financing to purchase an Optometry practice, banks are realizing the high potential Optometrists represent.
- Get good, professional advice – The most successful Optometrists are those who surround themselves from the start with an Accountant, Lawyer and Banker. These industry experts are essential when making key decisions, including buying an existing practice or financing a new one, practice valuation, loan structure and industry trends that might affect future decisions.
- Solid planning is very important – Opening a new Optometry practice is a risky yet rewarding venture. Any business owner must complete the appropriate due diligence regarding an opportunity. A business plan must be prepared. Not only is a solid business plan integral to the success of your practice, it can play a huge role when applying for financing from a financial institution.
- Decide what credit product is right for you – Whether you need start-up capital, funds to purchase equipment or to manage your cash flow, access to sufficient credit is essential to running a successful small business. Typically, optometrists require an operating line of credit to cover day-to-day expenses, a term loan to cover the costs of starting up or purchasing a practice, a business credit card to pay for and to track regular office expenses and Merchant services to process debit and credit card payments.
Entrepreneurs sometimes have trouble asking for help, but the most successful small business owners surround themselves with experts to navigate through the challenges of owning a business.
A dedicated Small Business Advisor at your bank, who understands your unique needs as an optometrist, can help you to map out the financial plan and business decisions needed to take your business to the next level. If this is your dream, make it a reality today.
Our experience has shown that most Health Care Professionals achieve success once they start practicing. However, the Health Care Professionals that achieve the greatest success are those that acknowledge the need for professional advice. This allows them to focus on what they do best – helping others to focus on their health.
Bottom Line: This article provides a plan of action for optometrist entrepreneurs to follow when running and growing their practices.
Dave Shilton has over 20 years of Business Banking experience with TD Bank. Currently, Dave manages the Professional Banking program @416 308 5636 or 905 928 9958 or @ email@example.com