Why Now Is a Good Time to Buy a Private Practice

Acquiring a private optometry practice is a significant career move that can provide stability, growth opportunities, a financial cushion, and a rewarding professional path. Of course, purchasing a practice is a major decision that should be made after carefully considering your specific circumstances. There are several compelling reasons why now might be the right time to take the leap. Today’s market conditions, characterized by the retirement of baby boomer optometrists, availability of hidden gem practices, and access to affordable financing make this an ideal time to invest in your own optometry business. This article explores each of these elements in greater depth.

RETIREMENT OF BABY BOOMER ODs

The optometry industry, like many other sectors, is experiencing a demographic shift as baby boomers reach their golden years. This generation of optometrists, who have built successful practices over the past few decades, is now looking to transition out of these businesses and into retirement. This wave of retirements has created a unique opportunity for younger optometrists and recent graduates to purchase these well-established practices.

Several factors make this a favorable option for a first-time buyer. Older optometrists who have been in practice for decades often have loyal patient bases, strong community ties, and established reputations. These attributes can be difficult to build from scratch, making acquiring an existing practice far more advantageous than starting a new one, in many cases. By purchasing a practice from a retiring optometrist, buyers can leverage the existing patient relationships and brand recognition, facilitating a smoother transition and ensuring the continued success of the business.

Moreover, the retiring baby boomer optometrists are often highly motivated to sell, especially if they lack a successor within their family or staff. This motivation can create favorable negotiation conditions, where sellers are more open to offering competitive prices or flexible terms to ensure the continuity of their practice’s legacy.

AVAILABILITY OF HIDDEN GEM PRACTICES

Although large optometry practices with multimillion-dollar revenues tend to dominate the headlines, numerous smaller practices with gross revenues under $1 million nonetheless present exceptional investment opportunities. Such “hidden gems” can provide a solid foundation for growth and profitability with a lower initial investment than larger practices, as they may have been underutilized or under-marketed by their previous owners, especially if the owners have not kept up with the latest advances in digital marketing, patient engagement, and practice management technology. For a new owner with fresh ideas and a willingness to embrace modernization, such practices represent a chance to unlock untapped potential.

For example, a practice grossing $700,000 a year might not attract private equity or corporate buyers, but with improvements such as enhancing online presence, optimizing the patient experience, and/or expanding service offerings (ie, specialty contact lenses or dry eye therapies), a motivated OD can quickly grow this somewhat underperforming practice into a highly profitable business. It’s also worth noting that, in many cases, these smaller practices are situated in well-established neighborhoods with a steady patient flow, although they may lack the aggressive growth tactics that new buyers can bring. These advantages of location and patient base make them a great starting point for optometrists looking to invest in their first practice without taking on the financial burden of a multimillion-dollar acquisition.

ACCESS TO AFFORDABLE FINANCING

One of the biggest barriers to buying an optometry practice in the past has been securing financing, but today’s lending environment is far more favorable for prospective buyers. Banks and lending institutions recognize the stability and profitability of optometry practices, leading them to offer attractive financing options. Optometrists are considered low-risk borrowers due to their potential for consistent income and the high demand for eye care services, making it easier to secure loans with favorable terms. Many banks now offer specialized practice acquisition loans tailored specifically for health care professionals. These loans often come with competitive interest rates, longer repayment terms, and flexible structures designed to make the transition smoother for new practice owners. In addition, the recent trend of lowering interest rates has made it relatively more affordable to borrow money for acquiring a practice.

Beyond traditional banks, other financing options, such as the Small Business Administration loans, can also be valuable resources for first-time buyers. Small Business Administration loans are known for their lower down payment requirements and longer repayment terms, making them a perfect choice for optometrists who are ready to buy but need more manageable monthly payments than would be offered by a typical loan structure.

With the right financing in place, buyers can focus on building up their new practice rather than worrying about immediate cash flow constraints. The availability of multiple favorable financing options reduces the barrier to entry, making practice ownership more accessible to a broader range of optometrists, including those at early points in their careers.

SEIZE THE OPPORTUNITY

There has never been a better time for optometrists to explore the possibility of practice ownership. The combination of retiring practice owners, hidden gem practices, and accessible financing options has created a perfect storm of opportunity. By taking advantage of these favorable market conditions, optometrists can position themselves for long-term success, professional fulfillment, and financial security in a dynamic and growing field.