Starting Own Practice as fresh OD graduate

[JennyJet]

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So I've been reading the threads about finding employment after graduation. My goal was to start my own practice or buy an existing practice fresh out of school. I would probably be practicing near the Los Angeles area due to family reasons.

Are there any existing optometrists in this forum that have done this? Would this goal be pretty hard to attain, especially in CA since there are 2 opto schools here? After graduating, I'll be in debt with school loans and have a family to support. Also, my husband would quit his job to be my business partner/manager.

 

[ppa93]

So I've been reading the threads about finding employment after graduation. My goal was to start my own practice or buy an existing practice fresh out of school. I would probably be practicing near the Los Angeles area due to family reasons.

Are there any existing optometrists in this forum that have done this? Would this goal be pretty hard to attain, especially in CA since there are 2 opto schools here? After graduating, I'll be in debt with school loans and have a family to support. Also, my husband would quit his job to be my business partner/manager.

The OD I shadowed bought the practice in Covina like 10 years ago. he is making good money tho. I dont think u should practice in LA since optometry in LA is very competitive. It will be tough tho, but if u have enough money to support urself and ur family, and pay interest for all ur debts for at least 6 months, u should be fine.

 

[J.opt]

Here’s a good article about starting a practice.
http://www.optometric.com/article.aspx?article=&loc=articles\2003\january\0103038.htm

J.opt

 

[JennyJet]

Here’s a good article about starting a practice.
http://www.optometric.com/article.aspx?article=&loc=articles\2003\january\0103038.htm

J.opt

Thanks for the article J.opt. There is hope!

 

[rpames]

At ICO we bring in many advisors and their main message is: YOU CAN BUY/START A PRACTICE RIGHT OUT OF SCHOOL EVEN IF YOU HAVE 175K WORTH OF DEBT. Despite the general attitude of most student and young ODs, there no need to work for a chain for 5 years and then go private. That is not saying you should never work there. Most wise ODs will open a practice and work for someone else (chain or private) part-time to supplement their income. Then after you office has enough patient flow, you can go full time for yourself.

As far as your husband leaving his job to be your partner. I would make him work some where else the first few years. You will not need him full-time at the office at first, plus it would be nice to have an outside income of off to live.

By the way, be proud that you have the drive go private right away...most of our classmates don't.

 

[JennyW]

At ICO we bring in many advisors and their main message is: YOU CAN BUY/START A PRACTICE RIGHT OUT OF SCHOOL EVEN IF YOU HAVE 175K WORTH OF DEBT. Despite the general attitude of most student and young ODs, there no need to work for a chain for 5 years and then go private. That is not day you should never work there. Most wise ODs will open a practice and work for someone else (chain or private) part-time to supplement their income. Then after you office has enough patient flow, you can go full time for yourself.

As far as your husband leaving his job to be your partner. I would make him work some where else the first few years. You will not need him full-time at the office at first, plus it would be nice to have an outside income of off to live.

By the way, be proud that you have the drive go private right away...most of our classmates don't.

That's a little bit optimistic. Unless you are buying or joining an existing practice which has reasonable cash flow, most banks will not loan you money to get started unless you have at least some experience working in the field or at least some background running/managing a small business. There are a few finance companies that do lend specifically to doctors but usually at a higher interest rate.

I would suggest that you try to get an associate position at a private practice so you can learn some of the ins and outs of running one before you buy your own. You don't have to stay there for years. Even 6 months is enough.

Jenny

 

[rpames]

I know of a few OD grads that arranged loans for a practice before they graduated or finished their residency so the office was mostly set up for them once they left the school. Dr. Richard Kattouf, arguable the most successful private OD in the US, has spoken to us several times. He not only has a huge private practice, he has a consulting firm. He arranges the set-up or purchase for fresh grads often. He says you can open a practice the day you graduate, even with debt and no experience. A different consultant said the same thing. If you have the will, there is a way.

 

[JennyW]

I know of a few OD grads that arranged loans for a practice before they graduated or finished their residency so the office was mostly set up for them once they left the school. Dr. Richard Kattouf, arguable the most successful private OD in the US, has spoken to us several times. He not only has a huge private practice, he has a consulting firm. He arranges the set-up or purchase for fresh grads often. He says you can open a practice the day you graduate, even with debt and no experience. A different consultant said the same thing. If you have the will, there is a way.

You can start a bare bones optometric practice for about $40000. Everything will be leased up the wazoo, but you will have something to start with. If you want to do this, you have to start planning long before you graduate.

I have never heard of any new graduates who purchased a practice fresh out of school, but of course that does not mean they don't exist. The few that I know of who started their own opened cold, but these were all people who had wealthy families who financed them. The problem is not in the initial outlay. The problem is having enough cashflow to support the practice and yourself in the very lean early months and years. If you have a working spouse, and student debt load that isn't a burden, you can do this.

I still think new graduates should work for someone else first to learn the intricacies of insurance billing even if only for a short time. This is usually something you can only learn by doing, not from a book. You also need to time to get onto the panels themselves, which can't happen until you have a license. You might as well spend that time learning from someone elses mistakes rather than making your own because (I can attest to this) they can be very expensive.

Jenny

 

[JennyJet]

Thanks for the input everyone. Starting my own practice seems daunting, but it is one of the main reasons why I changed careers. I want to be my own boss and in charge of my own career success. So now that I've got the getting into optometry school out of the way, I now have 4 years to figure out how to make owning my practice happen.

I agree with you that my hubby probably shouldn't quit his job from the get go. He's also a software engineer, and is itchy to get out of the rat race too. Plus both our fathers owned their own business, so we have entrepeneurship running through our veins. 😉 I'll probably work for someone 1st to get my name out there and scope out an area before commiting to purchasing a place. I've been working for an optometrist for the past year and a half so I've already done/learned a lot about insurance billing, optometric management software, how to run a front desk, office design, office location, etc. Plus both my hubby and I are DIYers and plan to put in a lot of sweat equity into building our dream office.

Well, I have a challenging goal ahead of me, but I'm ready and willing to put in the effort and I've got 4 years to plan out my strategery! 😀

 

[rpames]

Having you and your husband being software engineers is a great skill I wish I had. I have not found a office management & EMR program that was really good. You two could have a great side business of developing the software and you being an OD could really put in the touches the programers general don't add. You two could be rich!

 

[HOLLYWOOD]

I opened my first practice 1.5 yrs. after graduation.

 

[JennyW]

I opened my first practice 1.5 yrs. after graduation.

Providing more specifics would be helpful to the students on here....

Graduation year?
Debt level?
Where you purchased this practice?
What exactly you purchased?
From whom and for how much did you get your financing?
What did you do for the first year and a half?
Did you work full or part time at your new office?
How did you hire your staff?
What is the nature of your office? Disease based? routing care? vision therapy?

 

[Tom_Stickel]

Thanks for the input everyone. Starting my own practice seems daunting, but it is one of the main reasons why I changed careers. I want to be my own boss and in charge of my own career success. So now that I've got the getting into optometry school out of the way, I now have 4 years to figure out how to make owning my practice happen.

I agree with you that my hubby probably shouldn't quit his job from the get go. He's also a software engineer, and is itchy to get out of the rat race too. Plus both our fathers owned their own business, so we have entrepeneurship running through our veins. 😉 I'll probably work for someone 1st to get my name out there and scope out an area before commiting to purchasing a place. I've been working for an optometrist for the past year and a half so I've already done/learned a lot about insurance billing, optometric management software, how to run a front desk, office design, office location, etc. Plus both my hubby and I are DIYers and plan to put in a lot of sweat equity into building our dream office.

Well, I have a challenging goal ahead of me, but I'm ready and willing to put in the effort and I've got 4 years to plan out my strategery! 😀

Jenny,

I know this is a long way off still, but be careful when you go to work for someone else to get your name out there. Especially if you're considering practicing in a rural area, no-compete clauses can be brutal.

I personally know an OMD who signed a 50 mile radius/2 year no compete clause in an urban area. After he left the job, he sued his employer to get the no compete reduced, but this ridiculous no-compete actually held up in court. Poor guy had to drive over to the next state for two years before it finally expired.

So if you have a good idea where you want to set up shop, pick your first job out of school very carefully. And JennyW is dead on about working for someone else while getting your license, Medicare UPIN, on insurance panels, etc.

Tom Stickel
Indiana U. 2001

 

[DrGadgetSCO]

I'm an 4th year looking to possibly open cold. I've got 9 family members who are optometrists, one of which is starting cold graduating with me, two have been working for 3-5 years and are thinking of opening cold, 1 who opened cold after working with someone for a year or less, and two or three have been around for 30 years or so. My sis is an SCCO grad, lots of us are SCO grads... By the way... my uncle is an ICO grad who is doing pretty dang good.... Success is very subjective, but I'd put him against your "most successful doc in the US" anyday by his gross and net income and patient base. He started cold 30 years ago, which we all know is much different than now.

I've done some homework and talked to a few people (mostly outside of my family) who have started cold right out of school and some who have waited. They have great business seminars at the major Vision Expo's - be sure to attend! Most docs in both categories still had to finance almost all of the startup costs. As a matter of fact, most doctors who start up after working for other doctors say they wish they had done it when they graduated because of the pay deduction. Going from a 90K lifestyle to a 30K lifestyle in which part of that 30K is from a loan, is really tough, but coming from school, where you are already living on loans and less than 30K, it doesnt hurt so bad.

About your husbands work. The real issue here is whether he is more valuable with his regular work or working for you as a tech/business manager. As a computer engineer, I'm sure he makes more than you could pay a tech ($10/hour in CA?). You're going to have some free time to keep books and numbers for the first 6 months to a year, so don't worry about the managerial aspects, if you have trouble, ask your hubby for help when he gets home from his much higher paying job. He's making more than you'd save by having him at your office.

40K is a pretty cheap startup, but if you had used equip, it might be possible. My estimates were more like 70K, and don't forget to add in operating costs. Most businesses in general don't break even until 6 months to a year. Most households can't live on a negative income. Breaking even means you take a salary, but operating costs should include your salary. (this is where you can save by having hubby keep working, you can have a very small salary to start with.) All of this will have to be detailed out in a business plan that you will have to take to a lender.

Look into SBA (Small Business Administration) Loans. They are usually willing to help doctors start practices right after graduation. Be aware; however that they pay close attention to your business plan and will be calling a few times during the first months and years to see how your plan is going. Always give them your respect, because most of their loan contracts include an immediate collection clause in which they can demand all of their money back if you drastically change your business plan (i.e. move your practice from a medical plaza to a mall). I personally know of a doc who got over 200K in an SBA loan, he has no complaints about the customer service, but did say that they have called a few times to see how he is doing.

Starting a practice in a competitive metropolitan area is only what you make of it. Do your research and find a niche that needs you.. More than likely LA is not going to have much need for low cost, high volume doctors. Focusing on high end frames and modest to high exam fees and a boutique atomosphere might do well, your Chambers of Commerce can help you with demographics. Yellow Pages and other advertisement companies might give you free info if you act like you might buy their services, etc.

Good luck with whatever you decide. Focus on passing all of your classes, and research this stuff as your recreational reading. Don't let anyone discourage you from your dreams... Thats what this country and this profession are all about.

Doc Gadget

 

[scalded]

Good luck with whatever you decide. Focus on passing all of your classes, and research this stuff as your recreational reading. Don't let anyone discourage you from your dreams... Thats what this country and this profession are all about.

Doc Gadget

What types of resources are available for researching starting an office? Are there ones that specifically address optometry or do they cover medical offices in general? I have a couple MBA friends that could help me write out a business plan, but how does one find out what factors make an area attractive of a specific type of practice. (Population per OD, median income etc). Is that something that is covered during optometry school?

 

[ucbsowarrior]

So I've been reading the threads about finding employment after graduation. My goal was to start my own practice or buy an existing practice fresh out of school. I would probably be practicing near the Los Angeles area due to family reasons.

Are there any existing optometrists in this forum that have done this? Would this goal be pretty hard to attain, especially in CA since there are 2 opto schools here? After graduating, I'll be in debt with school loans and have a family to support. Also, my husband would quit his job to be my business partner/manager.

It can be done, but it depends on your business background and how much business acumen you have. If you don't have much experience in running your own business, I would think twice prior to embarking on your own venture or else you need a good mentor....and trust me there aren't that many good mentors out there. Even some of your instructors are not that experienced....some of them have successful practices...others you ask them, ' why did you become an instructor?' they tell you lies and say...'well i used to have my own practice, but i like teaching more.' This could be true, but most likely it is a lie and they are holding back that they failed poorly in their private practice, and that teaching is a retreat to them. it's better if some of these 'loser' stop front'n, so that the students can learn from their mistakes.

back to your questions, it all depends on your level of business experience and how level minded you are.

all the best!

 

[hoosier1]

Starting your own practice cold may be difficult because it will take you a few yrs to establish a good patient base.

 

[DrGadgetSCO]

What types of resources are available for researching starting an office? Are there ones that specifically address optometry or do they cover medical offices in general? I have a couple MBA friends that could help me write out a business plan, but how does one find out what factors make an area attractive of a specific type of practice. (Population per OD, median income etc). Is that something that is covered during optometry school?

Most of what my practice management courses at SCO talked about how to run a practice, some of how to value, purchase, acquire practices, partnerships, employment, benefits options, cost sharing etc. I must say that although there were a few speakers who had started their own practice, few of them had time to get into the details of what they were looking for at their area chambers of commerce, etc. There are a few optometric practice management textbooks (Business Aspects of Optometry - by Classe ISBN 0-7506-9614-1) that can give general standards for the industry, mostly like chair time costs, overhead costs, industry standards for profit margins and markups on each thing, but they don't tell you how to choose a location of mode of practice per se. I guess they decided they'd get paid as consultants to do that part.

From what I have learned by talking to other doctors, reading Optometric Management magazine, web searches, Continuing education (which is usually free for students), etc.... Do your demographics research with the chambers of commerce, get info on population, income levels, and percentages at each income level, be sure also to get all of the optometrists in the area (they have to get a business license so the chamber should have them all on record). Scope out the optometrists/opththalmologists offices to see if they are high end or low or in between, get out a map and put up pushpins for each office, different colors for different levels (high/low end), The yellow pages wants your money bad, if you give them an address, they'll gather information for you about the income levels/percentages of the people within a certain radius. Find out where there is a Market to be tapped and go there. If there is no moderate range practice in an area of moderate income within usually around 3-7 miles depending on how rural or urban the area, then a moderate range practice might do well, etc. Be aware that this advice is coming from someone who has gathered this on my own, and from talking to other doctors who have done this, but I've had to fill in the holes and read between the lines of what they did. By no means do I beleive myself to be an expert, but I'm looking for practices and areas right now, and this is the formula I'm trying to follow. Good luck!