Bill Nolan Speaker

Bill Nolan of Williams group spoke to an audience of mainly first, second, and third year optometry students regarding the “do’s and don’ts” of joining a practice in the future. He began with the broad question of, “what is a practice worth?” And while most students have a very specific dollar amount, Bill wanted us to stretch our minds and really consider the different aspects of joining a practice that could potentially be yours one day in the future. The mathematical components were given in an example of a practice that makes $1 million in revenue/year is likely only worth 65% of that once the costs to run the entire operation are taken into consideration. This seemed like a shocking number for many first and second year students who have not been exposed to any formal finance courses yet. Mr. Nolan further revealed that on average, it takes about 12-18 months for a cold, start-up practice to even begin to break even (known as “average cash flow”) and this is with an optimistic economy in mind. So while many of us have had the dream of sitting on a glamorously furnished clinic with the latest technology installed that belongs solely to us, Bill kindly reminded us of the many realities that must be taken into account before we may sit on our optometric throne.

Another great point Mr. Nolan brought up was regarding finding an actual location for our future practice. Many of us have emotional investments to various geographical locations and we don’t realize how strong of an influence these ties can truly be. He gave 3 main categories for location scouting: emotional investment, family, and competition. While many of us are aware how close (or far!) we would like to be from our loved ones, we sometimes neglect the important factor of outside competition from already established optometry and ophthalmology offices in our ideal location. These competitors could have a huge sway in how our own practices survives financially, regardless of how great of a doctor we are. A poignant story from Bill was of a man who moved to Nebraska, a slightly middle-of-nowhere land that was in dire need of optometric care. It was not the man’s ideal location, but because the need was there, so was the money. And if you follow where the need is, your practice has a higher chance of success, which in turn can allow a lot of personal and financial freedom for yourself in the future for leisure.

A take home point of Mr. Nolan’s was that it is far easier to buy-in than to start up cold and it was recommended to try for a buy-out rather than a buy-in. What’s a “buy-out?” It means someone out there is retiring and instead of buying-into the practice to own a piece of the pie (known as a “buy-in”) you work long enough at the establishment to realize the practice is worth buying it completely from the retiring doctor—ergo, you become top dog! For this method to success, however, one must truly understand the risks of completely taking over a practice. It is not recommended to take a fixer-upper and it is advisable to take into consideration the costs of any technological and equipment update when negotiating pricing.

At the end of the talk, we all realized there were a million little things we had never considered when thinking about starting a practice cold. However, the goal is that by being exposed to these problems now, we are better prepared in the coming years to tackle these intricate problems.