I have read so much negativity in the posts recently, especially from some that claim to be in private practice. Just remember, when they use a screen name that allows them to be anonymous, there is no way to know if they are really doctors. Let's assume they are, and they are either not happy with being an OD or just feel there are better professions out there. That's fine and that's their opinion. I am not going to tell them they are wrong, nor am I going to tell prospective students to think positively and the perfect practice opportunity will appear. What I would like to do is give you my story. This is how I went from a brand new OD without a job, to the 100% owner of a million dollar practice in the span of 4 years.
I graduated in 1997 from UC Berkeley. I was a pretty good student (3.6 gpa) and managed to get accepted into the ocular disease residency at Bascom Palmer Eye Institute in Miami. Living in Miami on $22,500 a year is very difficult. In fact, it was so difficult that my wife and I had to share our condo with one of the other residents. I can't complain too much, as we were walking distance from a private beach that we had access to through our condo association. To really make ends meet, however, I had to work some weekends at a Pearle Vision Express. The $800 Saturdays allowed my wife and I to actually enjoy Miami and pay down some debt that we incurred during optometry school. That experience taught me a lot about corporate optometry. First of all, it made me realize that I had no interest in that type of practice. Secondly, I learned that there are patients out there that just want a pair of glasses and/or contacts, and no amount of education will make them want a comprehensive eye exam with photos, corneal topography, screening visual fields, etc from a private practice doctor even if they have the most professional looking office in the world.
After residency, I looked for, and found a job at an ophthalmology clinic because that's what I thought I was supposed to do with my extra education. My starting salary was $65K per year with a bonus plan that would guarantee me an extra $5K with the possibility of up to $15K based on production. Unfortunately, my bonus was based on optical sales which is illegal in Washington State, and so after consulting with my lawyer I agreed to a flat salary of $70K that first year. That was 1998. My first raise came 12 months later and it put me up to $83K. 12 months after that I was up to $90K. By the middle of my third year, I became a little disillusioned working for an MD and when partnership was not going to be financially feasible, I decided to look elsewhere (3 MD's have since left that practice for the same reason).
In November of 2000, I was made aware of an opportunity in my area by accident. I happened to be the local society president and was asked a question about a situation within the largest OD office in our county. Basically, the partners could not agree on a final buy-out price, so the majority owner excercised his option to buy back all of the minority partner's shares and fired him. Within 2 months of hearing about this, I had negotiated out of my non-compete and was hammering out the details of buying out that majority (now sole) owner.
The deal closed on August 1st, 2001. The previous owner stayed on as a full time employee for 3 years. Back then, full time was 3 days a week. We are open 6 days a week, and each of us worked 3 days. During his last year, I worked 4 days a week and he worked 2. After he retired, I hired a part time doctor to work Fridays and Saturdays so that I could continue to work only 4 days a week. Since she started, I have opened up a dry eye clinic on Fridays which runs only a half day and I use the other half for admin time. I am now in the process of negotiating the purchase of the other practice my associate works at part time and once that is complete, she will begin the buy in process.
My income has never decreased through all of this. The price I paid for the practice was between $500K and $1MM (I would prefer not to be specific). I had no problem qualifying for an SBA loan because the owner carried 20% of the note and was willing to continue working at the office. Even after taking on all that debt, my salary more than doubled on day 1 of owning the practice, and has increased ever since. Now to be fair, I don't see all of that money as I have to pay off my business loan (only 4 more years!), but I consider that money an investment. When my associate begins her buy in, because my practice is worth more now than it was 6 years ago, I am already going to see some gains from that investment. When I retire, I will see the rest, and if we continue to grow at the rate we have, it will be a substantial amount of money. I am just about to start the process of building a new office which will be another investment, and as part of the land deal I will own the building I am currently in which will be leased out. Yet another investment.
I am not telling you this to brag. I just want to point out that optometry has been very good to me. I enjoy what I do, and I make very good money. I used to say I got very lucky in finding my practice. I realize now that I worked hard to get to a point where I was ready when the opportunity presented itself. One final note, I do not hate corporate optometry. I know why OD's choose that road, and I don't fault them for that. I also know that no amount of complaining about Wal-Mart will make it go away. I choose to focus my energy on making my practice the best it can be by providing quality care that patients see value in. I do hope this post shows you that the financial benefits of private practice may take years to realize, but they are far greater than corporate when you factor in the ability to sell your practice, as well as owning your building. You can go for the quick buck available in corporate, but in the long run you will do much better in private practice.
I graduated in 1997 from UC Berkeley. I was a pretty good student (3.6 gpa) and managed to get accepted into the ocular disease residency at Bascom Palmer Eye Institute in Miami. Living in Miami on $22,500 a year is very difficult. In fact, it was so difficult that my wife and I had to share our condo with one of the other residents. I can't complain too much, as we were walking distance from a private beach that we had access to through our condo association. To really make ends meet, however, I had to work some weekends at a Pearle Vision Express. The $800 Saturdays allowed my wife and I to actually enjoy Miami and pay down some debt that we incurred during optometry school. That experience taught me a lot about corporate optometry. First of all, it made me realize that I had no interest in that type of practice. Secondly, I learned that there are patients out there that just want a pair of glasses and/or contacts, and no amount of education will make them want a comprehensive eye exam with photos, corneal topography, screening visual fields, etc from a private practice doctor even if they have the most professional looking office in the world.
After residency, I looked for, and found a job at an ophthalmology clinic because that's what I thought I was supposed to do with my extra education. My starting salary was $65K per year with a bonus plan that would guarantee me an extra $5K with the possibility of up to $15K based on production. Unfortunately, my bonus was based on optical sales which is illegal in Washington State, and so after consulting with my lawyer I agreed to a flat salary of $70K that first year. That was 1998. My first raise came 12 months later and it put me up to $83K. 12 months after that I was up to $90K. By the middle of my third year, I became a little disillusioned working for an MD and when partnership was not going to be financially feasible, I decided to look elsewhere (3 MD's have since left that practice for the same reason).
In November of 2000, I was made aware of an opportunity in my area by accident. I happened to be the local society president and was asked a question about a situation within the largest OD office in our county. Basically, the partners could not agree on a final buy-out price, so the majority owner excercised his option to buy back all of the minority partner's shares and fired him. Within 2 months of hearing about this, I had negotiated out of my non-compete and was hammering out the details of buying out that majority (now sole) owner.
The deal closed on August 1st, 2001. The previous owner stayed on as a full time employee for 3 years. Back then, full time was 3 days a week. We are open 6 days a week, and each of us worked 3 days. During his last year, I worked 4 days a week and he worked 2. After he retired, I hired a part time doctor to work Fridays and Saturdays so that I could continue to work only 4 days a week. Since she started, I have opened up a dry eye clinic on Fridays which runs only a half day and I use the other half for admin time. I am now in the process of negotiating the purchase of the other practice my associate works at part time and once that is complete, she will begin the buy in process.
My income has never decreased through all of this. The price I paid for the practice was between $500K and $1MM (I would prefer not to be specific). I had no problem qualifying for an SBA loan because the owner carried 20% of the note and was willing to continue working at the office. Even after taking on all that debt, my salary more than doubled on day 1 of owning the practice, and has increased ever since. Now to be fair, I don't see all of that money as I have to pay off my business loan (only 4 more years!), but I consider that money an investment. When my associate begins her buy in, because my practice is worth more now than it was 6 years ago, I am already going to see some gains from that investment. When I retire, I will see the rest, and if we continue to grow at the rate we have, it will be a substantial amount of money. I am just about to start the process of building a new office which will be another investment, and as part of the land deal I will own the building I am currently in which will be leased out. Yet another investment.
I am not telling you this to brag. I just want to point out that optometry has been very good to me. I enjoy what I do, and I make very good money. I used to say I got very lucky in finding my practice. I realize now that I worked hard to get to a point where I was ready when the opportunity presented itself. One final note, I do not hate corporate optometry. I know why OD's choose that road, and I don't fault them for that. I also know that no amount of complaining about Wal-Mart will make it go away. I choose to focus my energy on making my practice the best it can be by providing quality care that patients see value in. I do hope this post shows you that the financial benefits of private practice may take years to realize, but they are far greater than corporate when you factor in the ability to sell your practice, as well as owning your building. You can go for the quick buck available in corporate, but in the long run you will do much better in private practice.
