Do You Have To Go Big, Or Go Home?
With all the talk of private equity roll-ups and regional alliances, many practice owners are concerned that if they aren’t a large, multi-office, multi-doctor practice, they don’t have a future in independent optometry.
Is that right? It’s certainly true that larger practices are at an advantage compared to their smaller peers.
More revenues typically mean the practice has better cash flow
A larger staff means one or more people dedicated to things like recall or insurance receivables.
Multiple doctors make it easier for any one OD to go on vacation
Larger office spaces with more lanes can make for more efficient patient flow.
And I do think there will be an ongoing trend of consolidation among independent practices, mostly because the pool of new graduates who actually want to own their practices is getting smaller. Going forward, owners who want to grow will have ample opportunity to buy up their competitors as those doctors retire.
But just because you have the opportunity to make your practice larger and larger doesn’t mean you have to. After all, the whole point of owning your practice is so that you can make it what you want.
My rule of thumb? Unless you really value control of your schedule, at a minimum a practice owner needs to be earning more in income than you would earn working for someone else. That doesn’t it’s wise to ‘hit’ a revenue and income number and then stop making any effort to grow, but it does mean that smaller practices can work very well for their owners, especially in markets where costs are lower.
So no, you don’t have to build an empire to have staying power as a private practice owner. I do think there are important targets to strive for like getting an appropriate income for the extra time and headaches ownership brings and continuing to grow at a reasonable – not necessarily explosive – rate.
But always remember ‘why’ you bought a practice or bought into a practice in the first place. For most owners, control – the ability to do things and care for patients the way they want – is the key to ownership. And for most owners, control is enough to make owning worth their while, even if they don't choose to build a mega-practice.
Nathan graduated from Vanderbilt University in three years, with a degree in Spanish and a minor in mathematics. After graduating, he spent a year working abroad. During that time, he worked for two firms in San Jose, Costa Rica. He interned with Grupo Juridico de San Jose, working in environmental policy to protect a threatened parcel of land, then he worked as a project manager for a US-owned precision machining shop, Olympic Precision Machining. Nathan then spent 6 months working with street children and orphans in Mexico. Before getting into the healthcare industry, he was an Assistant Store Manager and completed the Corporate Training Program with Haverty's Furniture Company in Atlanta, GA.
Nathan serves on the advisory board for the Hayes Center for Practice Excellence at the Southern College of Optometry.