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Tuesday / May 21.
HomemifeatureI Rule: Optometrists Stepping Out on Their Own

I Rule: Optometrists Stepping Out on Their Own

Lauren Hess, who acquired Chas Sankey Fraser Optometrists in Toowoomba, Queensland, in partnership with Abby Ussher.

It’s a fascinating time in optometry. While the perception is that practices for sale are being swept up by consolidators, there are in fact, several brave optometrists across the country who are choosing to step out on their own, either establishing a greenfield site or buying an established practice.

For ProVision business coach Kelvin Bartholomeusz, there has never been a busier time.

“I’m the busiest I’ve been in 12 years and it’s all because people are establishing greenfield practices or looking to buy existing practices,” he said.

Around the country, ProVision is currently working with more than 100 ‘associates’; optometrists of all ages preparing to buy or establish an independent practice.

And this is despite the current cost of living crisis and peaking interest rates that consumes media attention daily.

As Mr Bartholomeusz explained, optometry is a safe business bet if you do things well – there are few individuals who won’t prioritise their health, or the health of their children, over buying a pair of shoes, a piece of jewellery or a haircut.

For smart independents this is gold.

“Many independents have tended to look after the over 50s. And for an over 50 like myself, we tend to have more money in the bank, and we’re actually very happy with interest rates going up. Regionally based, self-funded retirees in places like Orange for instance, are particularly inclined to spend more. So, while there may not be more people coming into a practice, the average value is higher, which evens things out.”

Mr Bartholomeusz said the younger generation of optometry practice owners are setting themselves up in niche areas of care that attract a loyal following from the get-go.

Myopia control is one of those areas. Other areas are keratoconus and dry eye disease.

For optometrists Abby Ussher and Lauren Hess, who acquired the long-established practice Chas Sankey Fraser Optometrists in Toowoomba, Queensland in February 2024, the opportunity was to “be in charge of our own decisions and not have any kind of clinical decisions dictated” and to offer “the type of services that we really enjoy practising. So paediatric optometry, delving into co-management of ocular pathology and eye health management,” explained Ms Hess.

Mr Bartholomeusz said it’s these niche areas that are driving revenue, despite the current economy.

GREENFIELDS OR EXISTING?

While it is typically easier and safer to buy into a proven, established practice with a loyal clientele, Mr Bartholomeusz said for many that’s simply not possible. Often entrepreneurial optometrists have been searching for a considerable amount of time and when they cannot secure an established practice, decide that starting from scratch is the next best option.

Starting a greenfield optometry practice can be an exciting venture, but it requires careful planning and execution.

Establishing a greenfield site on a shopping strip as opposed to in a shopping centre, for example, doesn’t come with the requisite expensive (and all too frequent) fit outs that shopping centre owners often stipulate.

“That often makes starting up much cheaper, particularly when the young ones use what I call, ‘the fit out services of mum, dad, aunt, and uncle’. That can actually bring the cost down significantly.

Support from “the bank of mum and dad” can also come with huge savings, particularly while interest rates are high. The good news is that banks are willingly lending, however when looking to borrow for a greenfield practice, soon-to-be-owners will need a level of capital behind them, coupled with a robust business plan and financial forecasts.

Ms Ussher and Ms Hess briefly considered establishing a greenfield site before acquiring Chas Sankey Fraser Optometrists.

In the process of negotiating the purchase and contracts, they realised “the huge amount of legal legwork that occurs behind the scenes for this kind of transaction” and briefly wondered whether they’d be better off starting from scratch.

“We looked at it, not particularly seriously… and thought, wow, starting with no patients, no cash flow, doing everything from the beginning, it would be an even bigger undertaking. We were really thankful to have the support of ProVision through their associate program. They gave us a lot of business guidance and mentorship through the whole process, which was awesome because it would’ve been very, very overwhelming doing it on our own,” Ms Hess said.

Mr Bartholomeusz said equipment is probably a bigger capital cost than the fit out, especially for greenfield buyers but also for buyers of existing practices because “optometrists typically want the latest and greatest technology”.

“It’s a natural thing… and we understand that. But we tell them to just wait for six months, see how things are going, then invest in [new technology].”

For those who are ready to buy, ProVision has put together deals with suppliers, that weren’t available two years ago.

“We’ve worked closely with Device Technologies and EssilorLuxottica – in combination, there’s every piece of equipment you could think of.

“But as a coach, I always encourage them to look at second hand. And because of the accelerated depreciation taxation laws, which were around until 12 months ago, established optometrists have been literally swapping out of equipment that is just a few years old.

“For new business owners this means there has been a lot of great quality secondhand equipment on the market – even topographers that enable them to develop their practice in those areas of interest like myopia control and keratoconus.

“This enables these young practitioners to compete against the corporates,” he added.

TRAPS FOR YOUNG PLAYERS

By far the biggest mistake budding practice owners make is to choose a well marketed location without doing the homework to really understand the potential.

“They get impetuous, they get told that it’s got tremendous foot traffic, et cetera, and that may not be the case,” Mr Bartholomeusz explained.

For Ms Hess there was “a whole array of corporates and a number of independents” in her hometown of Toowoomba, and yet the options were very limited. “Some of the bigname independents had succession plans in place, which were common knowledge.”

When she did hear that Chas Sankey Fraser had come up for sale, the timing wasn’t right.

“I was pregnant with my second child, and I didn’t want to go into practice ownership on my own. I just thought, this is way too much to take on. So, I shelved the idea at that stage…”

However, sometime later, everything fell into place.

“I was talking to Abby who had been pursuing a buy-in at the place she was working in.

“It didn’t work out, and we just said, ‘Hey, is it crazy to think about going into business together? And we said, ‘maybe not, maybe it’s not crazy; let’s talk about this’. That’s where the conversation started.”

She said their ProVision business coach, Jim Colley was an “amazing” resource, right from the start.

“He was really great in terms of helping us do the financials, the cashflow, budgeting, forecasting… and really thinking about it in a way that I guess Abby and I hadn’t necessarily had to think about in the past as employees. So, learning to put that business hat on rather than just the optometrist hat. It’s definitely a learning curve,” Ms Hess said.

ProVision’s other business coaches from interstate, leasing specialist Mark Corduff, and Optometry Australia’s affiliate, Industry Legal stepped in throughout the journey to provide advice and assist through the process.

“So, it was really such a team effort, which was awesome,” Ms Hess said.

GETTING STARTED

ProVision guides associates through completion of a comprehensive business plan and cashflow forecast using the group’s templates, benchmarks, and industry expertise. This is where Mr Bartholomeusz said he and his colleagues often have to refine expectations to ensure new owners are set up for success and critically understand what the first few years look like financially.

“I tell every associate the story of the tortoise and the hare, and they laugh because I tell them the tortoise wins eventually, but for the first three years, don’t expect to make a profit.”

To be conservative he said, “We plan out for three years, which is when we think they’ll reach breakeven, and we’re delighted to see greenfield practices reaching that in 18 months.”

To help new business owners get through that first three years he recommends their partner in life works outside the business to bring in independent income, or if two optometrists partner into a business together, that they both bolster their finances by managing a work schedule that allows time for locum work.

“We have a number of these situations… it can work really well. They just block off one day a week or so to work outside the business.”

One of the driving forces in the practice partnership formed by Ms Hess and Ms Ussher, was a desire to juggle work and family with flexibility and support.

When mivision interviewed Ms Hess, she and Ms Ussher had owned Chas Sankey Fraser Optometrists for just one week, and Ms Ussher had just gone on maternity leave, having delivered her baby one month earlier than expected.

Ms Hess, the mother of a three-year-old and an eight-month-old, was settling into running the practice in a part-time capacity with the former owner, who had elected to transition over four months, allowing time for Ms Ussher to return to work.

Ms Hess said the two business partners were excited to take on an independent practice together and were looking forward to growing the practice alongside their growing families.

“Our crazy idea is that we can really lean on each other to support the whole process of buying, setting up, and running a practice. Currently what we’re looking at is just running a one optometrist practice… sharing the hours… and then over time we’d like to grow the practice, hopefully in line with our families growing and our kids growing up so we can take on more days as we’re able to. And I guess that’s the benefit of being the owners – we get to decide what we want our business to look like and it gives us a lot of flexibility and freedom that we were missing and craving in our work life. We want to try and establish that ultimate work-life balance.”

MAKING IT THEIR OWN

As the first female owners of the practice, which has been in operation for over 30 years, Ms Hess said “it’s nice to be part of something that’s got a very long history and exciting to bring something new to it as well”.

Over time, she said the plan is to rebrand. However, for now, the strong brand awareness is helping to drive business and the community has embraced the two new practice owners.

“Abby and I were a little bit worried about how it might go in terms of the transition, but the patients have been really wonderful and the community in general, is super supportive – they’re yelling congratulations from the rooftops…. It’s been a really, really lovely and warm reception, so we’ve been very thankful for that.”

Adopting an existing team has also been a new experience for Ms Hess and Ms Ussher.

“It was very important to sit down with each staff member to find out what they liked and didn’t like about their job, where they wanted to see changes; and to outline what we, as the new business owners, were looking for in the positions as well.

“We wanted to gauge where they were at, so we can meet them where they’re at, but also give them a goal for where we’d love them to get to if they’re interested. And they were all really happy to learn more and to look at taking on more responsibility.

With new ownership, change is inevitable, and for an ageing practice can be dramatic. Ms Hess and Ms Ussher are choosing to smooth the way by being selective about the projects they take on.

“We’re making small efforts to modernise things… we went digital from day one and we’re introducing small things that would naturally change with the change of ownership. Both Abby and I are really positive people; the former practice owner and staff have been super positive… we’re appreciating working in an environment where we can get the job done.