To PE Or Not to PE

To PE Or Not to PE

Many people weigh options for their future. I am all about researching and exploring all options to be certain you make the best decision for your “whole family.” Your whole family is made up of your immediate family, team members, patients, and your community. As you continue to read this article, I suggest you have a pen and paper near you to write down your thoughts. Use this as an exercise to recall and remind yourself of what you envisioned in the past to what you seek for yourself today and in the coming years.

As you weigh and consider the option of selling your practice to Private Equity verses keeping your practice private, reflecting on yourself and how your decision will impact the others who made your practice what it is today is important. There are pros and cons to both options. Again, take notes of what you think throughout this paper. When you are done, reread it and review your notes. Take time to make a decision for yourself and the others within your whole family.

What was your focus, your passion when you:

• Opened your own practice?
• Acquired the office and made it your own?
• Expanded your practice to make your optical larger?
  • Added exam lanes to bring the new associate to your office, enabling you to care for more patients in your community and enhance the culture of your practice?
• Added another location to carry your vision to a new area with confidence knowing the level of care you deliver to your patients is superior to others and the patients will get the best care they need?
  • By adding the second, third, fourth or more locations, was your goal to allow for more team members for you to offer a career path to grow with you?
    • Did they help take care of you and your family as you took care of theirs?
      • How excited were you to promote people to various leadership positions and help them succeed?
• Was your goal focused on money first? Or was it items listed above or was it others I didn’t ask about?

How have you enhanced your:

• Patient care
  • Did you add an OCT years back?
  • What about your retinal imaging instrument?
  • Added pre-appointing to the practice to retain and improve your ability to execute care year in and year out to your patients?
    • How many generations of the same family have you cared for?
      • Their loyalty and commitment to you, was it humbling and rewarding to and for you?
• Impacted your patient lives?
• Impacted your work family?
• Impacted your own life?
• Impacted your family?

What was your long-term vision? Did you have the vision of passing your legacy on to other optometrists to enable and empower them to see the balance the optometric profession delivers for a professional and personal/family life you have had the benefit and experience? Your practice culture for yourself, your team, your community has been invaluable to the market you are within. All you strived to has become a cornerstone of your practice and the people around you, including but not limited to the families, schools, religious organizations, philanthropies, and you yourself. Being able to give back to and enhance all of the people who are a part of the organizations mentioned, and many not mentioned, that you support, appreciate what you have brought to them and all the people who use those resources are the recipients of your investment in your community.

Your team has supported you as you made changes to your practice and business. Ok, some have caused headaches and issues but the majority of the people on your team today and those in the past who may have left for various reasons are better people because of what you offered them. You gave them an opportunity to learn about a great industry, one where you make amazing diagnoses and treatment plans for your patients. Your team members delivered and executed for and with you. Is there anything more rewarding than placing those eyeglasses on a child for the first time? Their eyes open wide and the smile on their faces as they see their parents clearly for the first time is unmatched. Those moments, those experiences will stay with each and every person who ever works in this industry and it was because of you and the work family culture you developed and live with your team every day.

What do you strive to see for your vision in the coming years? This question will vary based on you, you reading this right now. How many years have you owned and operated your practice? Is it to have the office fund your retirement? How will that play out for you? Contrary to what some people are told, banks do loan money to individuals who want to purchase multi-million dollar practices. Acquisitions by private Optometrists do happen
and the legacy can be carried forward. Private Equity is an option, but how do you see yourself practicing until the final day you work in your clinic? Do you want to be in control or be controlled? That is an important question for you to answer.

How close to retirement are you? If you are over the age of 50, you may say 20 years from now, I want to be retired but still plan to return to my legacy practice for my eye health care and eyewear. I want to see some of the same people here today still here to care for me tomorrow. If you are younger, you may have a vision to do the same as above, but have you started to write out your goals, your mission statement so you can plan accordingly to make your vision a reality?

If you are very early on in your ownership, begin a journal. Write out what you love to see in your day. Record the littlest of actions you have seen in your clinic, your staff, yourself, and the patients you care for. Create this journal so you can look back and remember when you brought in a new technology of your choosing and how the staff was excited and you experienced the value the investment brought to your patients! You made a difference because you could and did. Be proud!

“A hundred years from now it will not matter what my bank account was, the sort of house I lived in, or the kind of car I drove… but the world may be different because I made a difference in the life of a child.”

The decisions any of us make minute to minute, hour to hour, day to day, and week to week, are impactful to many. Whether it is the simplest of whether to order lunch in for the team, to allow a person an additional day off to be with their child, to send flowers to the family of a staff member who lost a loved one, or to say thank you for being in the office today, will stick with a person for years to come. Memories and moments shape who we are and what we all become. Many of the decisions business owners make carry forward to others to do the same to others. Leaders should strive to be emulated by the people within to carry their legacy, their actions, and their passion forward to the future. Can one put a dollar amount on the items mentioned? I don’t think you can.

Do you want to see another OD to have the quality practice you

• Created?
• Impacted your community?
• Benefited yourself to carry forward for others to experience and carry your legacy forward?

You can make it happen! It will require you to have a vision, skills, motivation, utilize resources, create an action plan to execute the change successfully. Why do people not work through this every time? It is fear. It is fear of the unknown. This is completely understandable, creating an exit strategy is not something most professionals will do multiple times in their career. It is new. There are many resources, including Acquios Advisors, to assist and guide one to make the best decisions for oneself. Never be afraid to ask questions, instead be afraid of making decisions without asking questions. An uninformed decision is never a good decision.

You graduated from optometry school or another professional school and entered the profession for the first time. Did you start in a private practice, a commercial setting, an ophthalmology office, or in a private equity owned and operated business?

If you started your career or within a time went to work in private practice, were you respected, appreciated, valued, and given support by the doctor who owned and operated the business you were or are currently a part of? Did that experience help you to be a better professional, doctor, and team member of the business? Would you be where you are today if you didn’t have the support and guidance given to you by another professional who helped nurture and guide you?

Were you given the opportunity to become a partner in this practice? Did you become the owner of the practice? What if the owner before you sold to private equity and you were now an employee as opposed to being a decision maker for the practice you call yours.

If one sells to private equity, does this reduce/eliminate this avenue for the new graduate coming into the profession tomorrow, next year, and the years to come? Does your vision include the support of independent optometry, or optometric care for the whole health of the patients who made you all you are today?

Many professionals will come out of school and work in a commercial setting. Money can be and is a motivator for many. Student loan debt is significant, and one wants to pay it down and off as efficiently as possible. This is an avenue many of the most successful private practice owners have chosen. As was mentioned the money was good, but the level of patient care may have been limited to the business willingness to make investments in
various clinical instruments. Decisions for change is in most cases, out of the professional’s hands. It was left to the operations team of the organization. Staff development and enhancement is limited to the area managers responsible for the office’s performance. It is safe to say there are areas with outstanding managers and others with challenges. But ultimately one can say, the staff is a reflection of the Optometrist and vice versa.

Reporting to an area or district manager can be a challenge in some instances. So many professionals make the decision to leave this type of setting to go out on their own to be in control and enable themselves to be all they want to be. And to have the flexibility and balance for their work life and family becomes more important as one’s life changes. In commercial settings, your hours are dictated, not chosen, your vacations must be approved before you can plan, a great team member may need more money to be retained but it must go through channels which takes time. Time the individual may find a new path to go on before the communication is completed through the organization one works.

The products you prescribe for your patients are good, but they are more than likely limited to what agreements are made from a home office as opposed to your clinic.

Were you happy with this? Did you leave it years ago in your professional career? Do you want to go back to this to end your career? If you answered yes, most private equity options may be right for you. Explore them and learn. Ask questions and make sure you reflect on your past experiences.

If you say no, I don’t want to repeat this in my career after all the years I have given to my team, my community, and my patient base. Now is the time to begin to create your vision for yourself and your business.

More questions:

• Do you have a financial planner?
• Do you work with an advisor who has helped professionals navigate successful exit strategies for others?
• Do you have an estate planner, or other counsel?
• Do you know what your retirement will look like?
  • Do you have an age you want to retire?
    • Do you have the facility to add an associate?

Are you five to seven years to your goal retirement age? If the answer to this question is yes, I am, the time is now to begin to execute your plan. Is your office operating at peak efficiency? Is it growing? What do your Key Performance Indicators look like? How are the aesthetics of the office? Is it time to paint, refresh the floors and displays?
Did you answer yes to the questions asked before about the people you want and need to help you with a smooth transition? If not, add that to your plan for change, get the right resources on your team. Planning is what it is all about.

If you are less than 5 years to your planned retirement age and you answered, no to the questions above, act now. Remember, your practice will be valued based on the past three years’ performance. You don’t want to coast in the end; you want to make certain the business is growing. It needs to be increasing, both on the top line as well as the bottom line, the EBITDA needs to be healthy.

Act now, do not put this off until tomorrow, remember that saying, “Yesterday never happened: today will never end: and tomorrow will never come.”

What to look for in an advisor to work with you? Someone who listens, one who will answer questions and support you, one who will review your data and identify the positives and strengths seen in the information you have about your business, and one who will collaboratively develop a plan with and for you to make certain you are doing, acting on tasks with their guidance to improve the performance of your practice to earn top marks for your practice to be valued at the highest possible points. It may also include the assistance to discuss with your current associate the plan for the buy in, or helping you to find a motivated professional to come join your team and become the next person to help you to continue your legacy, your culture, to support your community, and carry forward the patient care your community has come to expect. Not to mention the valued inventory of products you deliver to your patients as well.

Many people who do not plan or ask questions on how to exit their practice, work with a financial planner, or discuss with industry experts/professionals who do this for a living find themselves in a difficult place. Planning will enable you to do what is best for all, most importantly yourself.

There are options for all. You may be a partner with another optometrist already. Be careful of assumptions. Have you and your partner discussed one another’s retirement plans? Don’t assume the younger partner plans to work to the same age as you. There are some who have retired in their forties and early fifties. You don’t want to learn in the last years you
are both planning to retire in the same calendar year or close to one another. Partnership is like marriage, you two, or three or more, partners need to know when to plan for one another’s buy out or to bring on another professional to be the one to buy into or buy out a partner. Again, partnership is like marriage, you want the associate who might invest in your business to work with you for a time to know the personalities, vision, and all align properly. If your partnership agreement does not have a section dedicated to the exit strategy, now is the time to add one. It is imperative for the partnership, the practice, and most importantly, for you and your family. Yes, your family. They too must be protected.

Do you have an associate OD? What is their plan today? Many of the younger ODs are hesitant to come to the table and say I want to be a partner now. They are coming out of school in significant debt. They may not understand the ROI of the buy in to your practice. Even if they said one, two, or three years ago, they are not interested in ownership, ask again. Goals and thoughts change. Talk today, learn of their vision for their future. Larger offices may need to execute a phased buy-in process. One might only buy 10-15% of the shares and then additional shares every couple of years. This is why time is of the essence and action needs to take place. Again, know your vision for your exit strategy and create a plan to make it happen.

Can an associate or other optometrist or entity buy you out in full? The simple answer is yes. It will start with communicating with your current associate so they can plan as well. They will need to learn from you and begin to review the numbers to understand the processes they will need to execute to buy the office. If you do not have an associate at the current time, is it time to begin to network and market your practice to add an associate?

Depending on your time frame to exit the practice and how the performance is impacting the valuation as well as your needs for retirement, is it time to market your practice to attract a buyer? Again, your practice is valued based on the past three years’ performance. Is the office stagnate or declining? What needs to be done to improve your business? Do you need to reenergize yourself, your team, or otherwise breathe life into the practice?

Reflect on your career, your work life balance- “A life not reflected is one with little worth.” -Socrates

Reflection:

• Did you enjoy your experience in a commercial setting?
• What are your annual compensation needs?
• What is your goal dollars for retirement?
• Is private equity an option?
• Sell to an individual?
• What do you want to leave behind?
• What do you want for your team?
• What do you want for the community who has supported you?
• What do you want to pass on to another optometrist?
• What do you want for yourself?
• What was your motivation?
• What is your vision?

Your gratification?

• Was it to be great for your patients?
• Access to all options for vision treatment plans prescribed to your patients?
• Money?
• Quality patient care?
• Independence?
• Family business?
• Family time?
• Culture?
• Decision making for yourself, your team?
• Flexibility?
• Other?

What are your passions and needs for yourself?

• Know your needs.
  • Take your time on your decision.
    • Do not be bullied to make a decision within a limited number of days.
  • Be in control of your direction!
    • Share offers with those who want what is best for you. Don’t be held back by contracts that may limit who can review the offer.
  • Remove emotion from the decision.
    • If the offer has a deadline attached:
      • Options
        • Ask for an extension.
        • The buyer should respect your wishes and concerns.
        • Be selfish, this is about you and your future.
          • It impacts your family.
          • It impacts your employees.
        • As was said early in this paper, most only execute an exit strategy one time in their career, make this right for you.
• Emotional decisions are dangerous. Emotional decisions bring instant gratification. Long-term concerns may not have been thought of in the moment or even considered. Take your time. Write out concerns, questions, and goals today so when offers come you won’t forget. Remember paper doesn’t forget! Stay true to yourself and your vision.

Invision yourself weeks, months, and possibly years from now, you should not be asking these questions.

• Am I happy?
• Why did I do this?
• Am I regretting my decision?
• What can I do now?
• This is not what I envisioned for my final days as a professional.
• How many more days do I have until I am done with this?
• Was the person who told me this was roses paid?
• I did not stay true to my core values, why?
• Did I take the easy path?
• I hope my staff are okay.
• Did they become a number?
• I wish I could practice the way I did before.
• Was this worth it?
• Can we support the local groups as we did before?
• Was the money worth it?
• Does money make up for it?
• Was I in such a bad place that made this worth it?
• I should have hired an associate?
• I should have planned ahead.
• I should have……?

Don’t have regrets

• Succession planning is important.
• Make time to plan.
• Schedule time to review your plan.
• Make time to take time so you are not rushed.
  • Do not be pressured.
• Discuss your plan with those you trust and have confidence in.
  • Spouse
  • Advisor
  • Accountant
  • Financial planner
  • Attorney
  • Other
• This is a life-changing plan.
  • Take your time.
    • Thirty days is not enough time.
    • Share the contracts with people you trust.
      • Allow them to review.
    • Set a deadline for your plan.
  • Your practice is your investment.
    • You put many long hours, blood, sweat, and possibly tears into your business.
    • Do not erase all the value, culture, and care you have developed and nurtured of the past 20, 30, 40, or 50 years.
  • Stay true to who you are and what your vision was for your:
    • Business
    • Yourself
    • Future
    • Livelihood
    • Patients
    • Community

Be cautious, be deliberate, be selfish, create your plan today. Discuss it with people who know how it works. Revise the plan if needed, but create and develop your plan now, today! Your exit plan is your final chapter in your professional career. Make it matter. Make your final chapter so amazing today you will have the opportunity to live your vision tomorrow. You earned to close out your career how you want it to be. You deserve the best for all you did to improve your patient’s quality of their lives. This is all about and for you!

All the best to you!

Sincerely,
Rick Guinotte
CEO Acquios Advisors INC