Apple Eyecare PC was struggling with net profit and felt some of the growth could be improved if they got help with some job positions where they felt bottlenecked. Their management team included the owners and the office manager who envisioned changes in job responsibilities and procedural changes, but they seemed slow and hard to facilitate at times. They needed outside prospective and encouragement to make the changes they knew they needed.

The owners sat down in December to review the past year and plan for the new year. They agreed that they had a good year but not a great year and knew they could do better. While they could continue their current path, they envisioned a lot more for their practice. 

The senior doctor, having used consultants twice before, felt confident that this was a great time to bring in more consultation to help make the changes necessary for greater growth in the new year. While there was some concern for payback on the consultation fees, they agreed to go forward with Williams Group as they were instrumental in the buy-in agreement of their second doctor a few years earlier. 

Apple Eyecare PC had benefited from the services of consultants twice before, but they agreed, “No other consulting group taught them what Williams Group did. Providing us management tools and guidance to improve patient flow, profit, employee training, and role definition was invaluable.” 

The doctors of Apple Eyecare PC noted, “By far, the best part of our consulting was the suggestions by Williams Group for the doctors’ delivery of professional skills in the lane and the evaluation of time management by the doctors in the patient delivery process. Also, our ability to track performance closer to real time has improved greatly; monthly production is consistently up and quite predictable; patient flow is smoother; patient experience is much better/more streamlined and they leave here better educated to make good decisions for their vision and eye health.”

 Another positive Apple Eyecare is experiencing is that they are not slogging through minutiae. “The details are more and more running themselves or being run well by staff, and we [the doctors] are directing the bigger picture. This means personal time is more enjoyable, and there’s less concern about what’s happening back at the office.”

Overall, Apple Eyecare PC’s annual gross increased, and they have been able to raise wages and increase vacation time while still growing the practice. “We would not have been able to do this as easily if we had not made the changes suggested by Williams Group. While there was some resistance by the staff with some of the changes suggested, we were able to demonstrate the benefits of the changes and have adapted to the changes well over time. It was very helpful to have a consultant to encourage, redirect, and revisit the items under change as we slowed, sidetracked, or just needed encouragement to keep on the path. We feel we are headed for a brighter future!”


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Bill Nolan

Executive Vice President of Williams Group, President of Practice Transitions
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Most doctors go through a long process of deciding what to look for when buying a practice. Unfortunately, during their four years of professional education, there isn’t much covered on the business aspects of purchasing a practice or the realities of ownership. The answers to these concerns will ultimately be premised on one thing: the determination of what a practice is worth.


Over the last several years, the value of optometric practices has declined. Twenty-five years ago, a standard rule of thumb for evaluating practices would be some multiple of gross revenue. It was quite common to expect one year’s gross revenue—meaning that if I had a $600,000 practice, I would expect to sell it for nearly $600,000.

Over the last two decades, traditional valuation formulas no longer apply, and the real intrinsic value is closer to 50% or 60% of a year’s collected revenue. An optometric practice is like any business—it is worth a combination of only two things: assets and earnings. It might be helpful to have a common understanding of what optometric assets and earnings really represent. In the following few paragraphs, we’ll look at the commonly accepted formulas used to appraise an optometric practice.


First, assets are either tangible or intangible. Tangible assets would include items such as ophthalmic equipment, computers, frame inventory, contact lens inventory, furnishings, and supplies. Some examples of intangible assets would be goodwill or a covenant not to compete. In my experience, the ophthalmic equipment—a large part of any optometric practice asset base—is the most difficult for which to determine value.

Hard tangible assets can be valued using one of three methodologies: book value, replacement value, or fair market value. An understanding of what these terms mean will help you get a better grasp of what these assets are worth.

  • BOOK VALUE is simply the value of an asset carried on the books of the business. This value generally is acquisition costs net of accumulated depreciation. For example, if in 1990 you bought a slit lamp for $18,000 and its current accumulated depreciation is $12,000 on the company books, this asset would have a value of $6,000.
  • REPLACEMENT VALUE is the cost of replacing that piece of equipment in today’s market. Using the slit lamp example, if the slit lamp (which was purchased in 1990 for $18,000) was destroyed in a fire and needed to be replaced, its replacement value may be closer to $22,000 or $23,000—the cost of replacing it brand new in today’s market.


Because it is not traded regularly in a public marketplace, assessing equipment’s value is difficult. It is often advisable to bring in a third party to appraise ophthalmic equipment. There are many companies that specialize and deal in previously owned equipment, and they can provide this service for your practice.

If buyer and seller cannot mutually agree on the value of assets, it is advisable to hire an independent appraiser.

  • FAIR MARKET VALUE is the most subjective of the three accounting concepts, especially as it applies to ophthalmic equipment. It is nonetheless the concept that is most often applied to determining the value of hard tangible assets like equipment.


Once all tangible, physical assets—equipment, frames, contact lenses, etc.—are accounted for, some value needs to be put on the goodwill or “blue sky” of the practice.

Though often misunderstood, goodwill is the expectation of future earnings based on the management skill, know-how, and favorable reputation a business has with its customers or patient base. After an optometric practice is purchased, goodwill is generally transferred to the new doctor, and thus has a rightful place as an intangible asset.

There are many ways to look at the overall value of a practice. Typically, they are the net value of assets, capitalization of earnings, and percentage of revenue stream (though the last is useful mainly for checks and balances for the other two methods).

  • NET VALUE OF ASSETS is a methodology that determines the net fair market value of the assets previously discussed, including goodwill. Net value of assets, of course, deducts any outstanding debt on the practice at the time of sale.

For example, if a $600,000 practice appraised for $275,000 and is still encumbered by $200,000 of debt, the value of the assets would be $75,000.

In many cases, when an associate doctor buys into an existing practice, he or she may do so through a combination of cash and acquired debt. For example, if I agree to a purchase price of $275,000 to buy a 50% interest, and the practice had $100,000 of outstanding debt, the terms of my buy-in would be $225,000 in cash and $50,000 in acquired debt.

  • CAPITALIZATION OF EARNINGS values the net earnings of a business as an investment. A cap rate is determined, which is an assumed return on investment for the buyer. Using this methodology, no specific value is determined for the assets, but rather the assets’ ability to produce income.

The trick in this methodology is to determine the true net income of the business. Generally, the net income of the business is all dollars paid to or on behalf of the equity owners, including doctor salaries, allocation of income for things like automobiles, country club memberships, certain insurance policies, and funded retirement accounts. From this total earnings pool, an amount is subtracted that represents the optometric compensation. The balance is the true net earnings of the business. This dollar figure is divided by the capitalization rate to arrive at the overall value of the practice as an investment.

  • PERCENTAGE REVENUE STREAM is used to determine some sense of value. Currently, good practices are appraising for between 50% to 65% of a year’s collected receipts. This means a $500,000 practice will appraise for between $250,000 and $300,000.

This multiple of revenue is helpful because many banks will not lend money for a practice purchase if the appraised value exceeds 70% to 75% of collected revenue. If a buyer pays more than these multiples as the appraised value, the practice will have a hard time with cash flow to provide an adequate salary for the optometrist and the debt service needed to buy out the practice.


As important as determining the intrinsic value is to this process, it is by no means the only issue to consider. When buying a dream practice, remember that an optometric practice is unlike anything else you will do in your financial life. There is a small market for potential buyers and sellers wishing to transfer ownership of a practice. Most are other optometrists, which by definition limits the liquidity of the marketplace. Occasionally, some other entity may buy a practice, but these are few and far between.

Location, demographics, and economic vitality of a community are important issues to address when buying your first practice. One additional factor often overlooked is where optometry has a strong presence and is supported by the state’s legislative practice act. There is no doubt that in certain regions of the country our profession has thrived and been a key player in the healthcare debate due to hard-fought battles and victories in state legislatures.


Frame and contact lens inventory is the easiest of the assets to appraise. Generally, these items will go into the appraisal at wholesale acquisition costs and be discounted for any obsolete or damaged merchandise. If the practice has a 600-frame inventory, it would typically be appraised at between $28,000 and $33,000, net of any adjustments for obsolete material. This process continues until all assets in the practice have an established value.

Another key component is the saturation levels of optometrists to populations. The American Optometric Association (AOA) reports a desirable level should be one O.D. for every 7,500 residents in a community. That means that if your target market has a level of saturation of one optometrist to a population of 4,000, you will be in a very competitive and difficult market for short-term growth. Due to the competition in this market, you should be sure to look for a strong and vibrant practice to purchase.

Intrinsic value, as well as location, optometrist/population ratios, demographics, etc., should all be analyzed and weighed. Applying the best of these important factors will increase the odds of successful practice ownership.

Need A Practice Evaluation? Contact us today to request a Free Consultation.

Bill Nolan

Executive Vice President of Williams Group
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John P. Brandt Jr., O.D. and his wife Karen, Practice Administrator, of Brandt Eyecare were embarking on an emotional journey to continue their 68-year-old practice in Lock Haven, Pennsylvania. John’s father, had opened the practice in this rural area when he first began his ophthalmology career and the last thing that the couple wanted to have to do was close this legacy practice. Neither of them were interested in having an ownership role overseeing staff and administration anymore so, they set their sights on a consulting group to help with transitioning the practice over to new folks, as then the two of them could solely do what they love…practice optometry.

In the mid 1990’s, the Williams Group had helped integrate Dr. Brandt Sr.’s ophthalmology practice with Dr. Brandt Jr.’s optometric practice and the changing trends in both specialties. When the time came to begin the natural transition toward retirement the Brandts turned to the Williams Group again for guidance after such a successful consulting experience. They were confident in this partnership once again. After a very emotional roller coaster with the expected ups and downs of selling a company that had been in their family for so long. The Brandts were able to sell their rural practice with the help of the Williams Group Transitions team.

“Transitioning our practice has been a daunting endeavor; however, the outcome is far better than our expectations. Williams Group provided us with excellent advice and tools to move this process forward. We are grateful not only for the professional guidance but also for the friendship that has developed throughout this process”, they noted.

Thomas Breen, Vice President of Practice Transitions, says it perfectly, “Negotiating the practice is the hardest part of any selling. It is both an art and a science. There is a lot of math involved; wrangling of numbers. Then the art of what both the buyer and the seller want comes into play. It takes time and patience.”

Karen states, “They helped us attain the goal of keeping our doors open and we are very grateful that the entity to do so is someone whom we respect and admire.”

The Brandt Eyecare practice was purchased by Nittany Eye Associates and will now be run under Dr. Michael Talone, Dr. Michael Cymbor and Tim Grattan. Nittany already has four other practices across the nation.

Learn more about our Transition programs.

Tom Breen

Vice President of Practice Transitions
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A couple of years ago a good friend introduced me to Professor Jordan Peterson. Peterson was well renowned for his insight into human psychology. He distills down a life improvement truth into a simple statement that everyone has heard from a parent, or has said as a parent...clean up your room.

 The idea being that whatever it is that we are doing, we do it better if our room is properly organized.  In other words, we should organize the world around us so that we can operate efficiently within it.  

 Practice Management is properly cleaning up and organizing a room.  There is nothing more important for the success of a practice than to have it properly organized.  Everyone then benefits.    

 One of the often-neglected rooms that need to be cleaned and organized in your practice is the financial room.   A clean financial room represents an efficient cost-effective system that will give you, the business owner, the information you need to assess business performance and make the best decisions for your clinic and patients.   

 Your financial room consists of three distinct systems that ought to be aggregated into your financial management report. The systems are: Billing & Collections, Purchasing & Payments, and Payroll. Your practice management software provides reports for only one of these three – Billing and Collections.  

 I suggest that you think in this three-system framework to consider if any one of the three is blocking you from getting the information aggregated into a timely set of monthly financial management reports. An organized financial room ought to culminate in the three systems coming together into a financial management report that you can review within the first two weeks after month end. The following ought to be included in the financial management report: Balance Sheet, Profit & Loss and Cash flow statements.    

 A business owner needs their balance sheet to assess their cash and asset position relative to their current liability and long-term debt position.  The assessment can be as generic as, 'does what I'm looking at make me feel good?'  Do I have more assets than liabilities available to work with?  Life can be very challenging if our assets only equal our liabilities. We perform better if our assets exceed our liabilities by a reasonable margin.  This holds true with companies.   

 A business owner needs their profit and loss (P&L) statement to assess their operating net relative to other clinics in the profession.  The P&L measures how well you’re using the assets you have, allowing you to compare how you're performing relative to your peers.   To do so your P&L ought to be organized into six main categories to determine your operating income: Collected Receipts, Cost of Goods Sold, Staff HR, Occupancy, Overhead and Marketing. Each of these categories can be compared to national benchmarks to assess your clinic's performance relative to national averages. 

A business owner needs their cash flow statement to assess what amount of cash is: #1 is generated from clinic operations, #2 consumed from financing activities (debt service), #3 used in investing activities (equipment purchases, distributions).  Your cash flow statement will tell you if your clinic operations are generating sufficient cash to service debt and pay yourself and your taxes. The cash flow statement will give you a very clear understanding of where your cash is going. 

 From our client base, we have found that the most successful practices are those which have their financial room properly organized. 

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Brad Rourke

Chief Financial Officer
Williams Group
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Every small business owner knows that at some point they will want to divest their business interests and enjoy the fruits of their labor. Determining when to start the process of transitioning your practice is key.  If you are considering a fractional buy-in with a valued associate doctor, several factors are vital to a successful transition.

Motivation:  Most practice owners begin to think about an associate with ownership interest when either they, personally, or the business is at a crossroads. There may be a desire to add new services, to realize practice growth within their primary office, or there may be the opportunity to expand with a neighboring satellite practice. Some practitioners consider a fractional buy-in when faced with a full schedule that can’t be managed alone or when increasing demands of ownership responsibilities become too great. Other doctors simply have a desire to cut back on production and realize a return on capital.

Evaluation:  When evaluating an associate for a fractional buy-in, consider what your associate has brought to the practice that would warrant a long-term ownership relationship.  Perhaps, they have added a valued specialty service, created/updated standard of care protocols and trained staff, or added production to off-set patient demand, resulting in a more efficient schedule. Your associate may have brought a higher level of lens expertise, dispensary management or improved coding and billing to the practice. It may have been their understanding of business finances and key performance business metrics, or desire to build the practice through community involvement.  Whatever the value-added process, policy or procedure, your choice in joint practice ownership is an important and far-reaching decision that will impact your business success and service to your community for years to come.

Preparation: So, how do I get started with the plans of joint ownership? There are so many aspects to consider.  The unique structure of your strategic transition plan can be found in the answers to your questions. What percent of ownership do I offer my associate? What can my associate afford and still have enough cash flow to support a family? How do we determine a purchase price? How do we structure the purchase and the purchase agreements? Where do we go for financing? What are the steps to transition and how long does it take? How do we structure our compensation after the sale? What operating agreements do we need once we are joint owners? These and other questions must be addressed throughout the transition process and when properly addressed provide a road map that is clear, insightful and effective.

You’ve spent your professional career growing and managing a successful practice. Your fractional buy-in strategy is unique and must be carefully considered and strategically planned. For over three decades, Williams Group has been committed to offering professional services in a knowledgeable, ethical, and timely fashion to help you reduce the stress of ownership transfer.  Our transitions team has extensive industry experience in all facets of the buying and selling process. From valuations to strategic buy/sell consulting to estate planning, Williams Group is the optometrist-recommended choice to navigate the next phase of practice ownership. Learn more about the programs we offer.


Tammi Sufficool

Vice President of Practice Transitions
Williams Group
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(As printed in Eyecare Business, November 2016)

I call it The Tale of Two Practices. One practice is experiencing a decline in patients, while another a few blocks away doesn’t have an empty slot for months. One practice is turning one third of its staff over every year, while another keeps its staff for decades. One practice has a toxic work culture, and another has a staff on fire.

Another example is two doctors in the same practice (as in, inside exactly the same walls, same staff, same products, same managed care plans) have a revenue-per-patient that’s $200 different (I see this one a lot). One $2 million practice is netting 36%, and one’s netting 10%. One practice for sale sits on the market for years and settles for selling the records, while another is sold in a month and brings a premium. So what’s the point? Simple. You control all of these outcomes.

Not Obamacare. Not third parties. Not the economy. Not the competition or the Internet. It is YOU that controls these outcomes. Here’s how.


As we work with practices day in and day out, it’s plain enough to see the vast differences in outcomes from one practice to another. More so today, I think, than ever in my nearly 30 years working with practice owners.

As we kick off this new column about Surviving in a Managed Care World, it is of the utmost importance that we keep this in mind. Having lectured coast-to-coast these past few months, I conclude that many colleagues have been duped.
They are convinced in earnest that they’ve lost control of these and related practice outcomes. This trickery, I’m certain, is becoming a self-fulfilling prophecy for many colleagues, and this, in itself, is the greatest contributor to some private practices making the endangered species list.

That’s not to say our managed care world doesn’t pose challenges. Dwindling revenue-per-patient, increased regulation, compliance concerns, Meaningful use fears (and fear mongering), the see-saw regarding government health programs (are they here to stay, will they be repealed?), etc., etc., etc. Every practice owner is experiencing these challenges; but there are amazing differences in how they are being met, and in the results practices are experiencing.

Controlling Your Own Outcome

Again, the simple fact is we DO control our outcomes. We always have, and we still do (provided we choose to). Here are a few evidences of that from conversations of late:

  • A New Mexico practice is celebrating 25 years, and seeing 20% growth (that’s better growth than many practices only open five years!)
  • A Wisconsin practice did over $2 million again last year and still takes no vision plans (in the heart of managed care country). It’s true.
  • A Montana practice is breaking ground on its third addition of thousands of square feet, after 25 straight record years, despite Costco’s best efforts down the street.
  • A practice in Missouri is seeing its staff ON FIRE after implementing a new profit-sharing plan, experiencing its best doctor day production in a decades-long history.
  • A practice in New York will be selling for a premium shortly, after putting together a string of its best three years of profit in a row.
  • A practice in California had gross billings of nearly $3 million on one doctor before adding its first associate.
  • A practice in Indiana signed up enough companies on its own vision benefits plan that it dumped all of its least-liked third party plans.
  • A practice in Florida has returned to record production after several consecutive years of practice recession.
  • A practice in Oregon has tripled its medical optometry revenues in the last few years.
  • A practice owner in Colorado recently proclaimed, “Owning my practice is fun again,” after tackling a number of employee issues and reducing her work week.

There is, of course, the doom-and-gloom crowd that believes private practice is on borrowed time. But this is not my experience at all—I’m talking to our colleagues, every day, and yes, there are plenty of challenges. But we can choose to control the outcomes.

And, as far as third-party plans, the more things look the same (managed care), the greater the opportunities for the creative to be different. Even in this managed care world, we can and will implement initiatives to control growth, revenue-per-patient, patient retention, new patients, staff productivity, inventory turnover, no shows, profitability and yes, life balance in practice ownership.

Tom Bowen


Executive Vice President
Williams Group
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It happens to everyone—you work hard running your practice, seeing patients, delegating to staff, and managing the additional responsibilities that come with being a business owner. Inevitably, at some point you will begin to feel burnt out from the day-to-day chaos.

Independent optometric practice can be an extremely rewarding profession, but as a health care practitioner, the additional pressures of small business ownership may feel like more than you signed on for. When you’re dealing with insurance companies and no-shows and continuing education, remembering what drew you to the field of optometry in the first place can get lost in the daily grind.

That’s why taking a vacation or time off is essential to your personal and professional health. It’s natural to be concerned about how your business will run when you’re MIA. If you’re a partner or part of a larger practice, things will probably continue, business as usual. But even if you’re operating on your own, time off could end up being very fruitful for your business.

Why? Because everyone needs a break. People need time to press pause and decompress. Being a business owner and health care provider doesn’t allow for a lot of downtime—you’re basically working two full-time jobs. Stress and exhaustion can affect your interactions with your patients, your employees, and your family. That affects your practice’s bottom line negatively. A frustrated employee may not be as motivated to work hard for you. A patient who feels like you were impatient with them may move on to a different practice. The list goes on.

Give yourself permission to take time off from work. The world will continue turning whether you’re in the office one week or not. Or give yourself a day off occasionally. If you’re working with Williams Group, we’re providing you with the processes and procedures to allow you to enjoy a little more time off.  Spend time doing other hobbies, enjoy moments with your family, and experience life in general. Your work is only part of what makes you a great optometrist—your life experiences will add vibrancy and color to your personality and the way you practice. That’s what will continue to bring patients in the door.

How many hours a week do you work? When was the last time you took a vacation?

Tom Bowen

Executive Vice President
Williams Group
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Many ODs are starting to recognize the value in having a social media presence. The question is no longer whether you should use social media for practice, but how should you use social media for your practice. There are a vast amount of social media channels available and various ways to use them. You may not have the resources of or Pepsi, but you can still find ways to leverage social media to benefit your practice. So without further ado, here is the first thing you can do to enhance your practice’s social media presence.

Get started. 
At the risk of being obvious, you can’t leverage your social media presence if you’re not even in the game. It can be overwhelming when you’re not sure where to begin, but something is better than nothing 100% of the time.

  • Get on Facebook. With 67% of internet users active on Facebook, having a presence on this social network is essential for your practice. Odds are, the majority of your patients have Facebook accounts (not to mention your competitors). 

Facebook also offers a significant opportunity to provide a higher level of customer service to your patients. So if you don’t know where to start, start by creating a Facebook account for your practice and commit to updating it regularly (whether that’s once a day or once a week). Again, anything is better than nothing.
  • Start a Twitter feed. Like Facebook, Twitter is a great place to service your clients. With the #hashtag search function and the short and sweet 140-character limit, this micro-blogging network is appealing and user-friendly. It’s also easily linked to your Facebook account, so you don’t necessarily need to spend extra time posting to two separate social media channels.
  • Try LinkedIn. While LinkedIn isn’t primarily designed for business-to-consumer relationships, it’s a great place for you to network with other professionals and stay on top of current news and trends in the optometry industry. Join discussion groups focused on optometry and keep an eye out for potential rock star hires in your area.

Tom Bowen

Executive Vice President
Williams Group
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One thing that will help immensely in making your optometric practice more turnkey is having a strong patient base, a solid brand, and a clear marketing plan. Read on for my tips on developing these areas of your practice.