Future Proofing your Business Legacy

Ultimately, business and exit planning, isn’t just about money, particularly for owner/operated businesses that are common for Optometry Practices.  A well-thought out exit strategy will also allow owners to ensure that their legacy can survive, in terms of their businesses on going success and also their values. 

When you think about exit or succession planning in the SME sector you will often see reference to planning for a family owned business and the intergenerational transition that is a common occurrence.  However the business landscape for independently owned optometry practices is marginally different.  The Optometry sector is seeing a change occurring in the age, gender and ethnicity statistics for the sector as a whole and these change trends are also represented in ownership statistics too.  There is a decrease in the average age of those taking on ownership opportunities and also a diversification in the roles that these owners hold within the practice and the fresh opportunities that these changes can bring to the business structure.  These trends are particularly interesting in terms of exit planning as it opens up a raft of new options in regards to what our exit plans may look like, who they may involve and when these opportunities may come to fruition. 


Different Exit Plan Strategies

There are many different strategies available and which one you choose will depend on your specific Practice circumstances. 

Before considering the below options, first ask yourself some of the following:

  • Am I retiring?  Or am I wanting to take a step back and free up some assets?
  • Am I wanting to relinquish all control over my Practice?  Including access to my client base?
  • Do I need a business partner?
  • Am I interested in a consultant or mentor role?
  • What is the ownership structure of my Practice?  Do I own outright or are there other stakeholders involved?
  • Have I considered what this may mean for the way I run my practice?
  • Is the employment security of my staff a key factor?

The answers to the above will influence what options you may see as viable for your exit plan.  It is also important to review/be mindful of your opinions on the above as they may change over time due to a range of factors.

The most common exit plan options are:

Succession – while often discussed in regards to family businesses, this can also include key staff or stakeholders involved with your Practice.  This is a great opportunity if you are wanting to maintain some level of involvement in the business or are invested in passing on any specialist skills and/or relationships to your successor.

Sale – to a third party, with whom you are not normally affiliated.  This works best if you don’t want or are unable to continue involvement in the business.  In many cases this involves work out clauses for a specified time period.

Mergers and Acquisitions – bringing two businesses together.  This works well if you want your business to grow and are the sole Practice owner.


When Should I Start the Planning Process?

The earlier you start planning, the better.  While one wouldn’t expect you to start a business thinking about how you are going to exit it, it is important that you have some thoughts on this and have communicated this to your trusted adviser.  By beginning the planning process early, you are allowing yourself, your practice and your succession plan to grow organically.  This is particularly useful in situations where a loyal staff member who has proven their worth to the practice becomes interested in future opportunities, or alternatively, you may have a young, dynamic individual join your team who is also interested in future ownership opportunities within your Practice.  Including an employee as part of your succession plan often provides you with a sense of reassurance as you know how they operate, that their values are likely to align with yours and you already know you can work together! 

Following this trend we are seeing an increasing number of Dispensing Opticians entering into Practice ownership agreements.  While this trend is still quite fresh and is likely to challenge a lot of preconceived notions that only Optometrists can be practice owners… There are a lot of benefits that have already proven the trend as a positive for the industry and this reflects the vital role an empowered DO can play within a Practice. 


What Makes a Good Exit Plan?

Communication and clarity are the two key elements of a successful exit plan.  You must communicate with all parties involved frequently, and help them to understand why you’ve chosen a particular course of action.  If you have clear processes as to how you’ve made your decision, people will generally more readily accept the outcomes.  The most common problem comes from the fact that, normally, you can’t please everyone.  Therefore it is important to identify what your key objectives are, what other invested individuals expect and to discuss these openly to try and manage these expectations to avoid disappointment and complications further down the track.

A clear, fair exit or succession plan will eliminate any conflict among key stakeholders and minimise the potential for any staff issues that may arise.  It is important that you provide all parties with the necessary time to seek further independent advice or guidance particularly if they are directly involved with the transition, while also providing everyone else in the business ample time to understand the proposed changes and the role that they may play in this process.

Businesses change and so should your plan.  Periodic reviews are the best way to ensure that your plan is fit-for-purpose and up-to-date.  Identify your favoured exit strategy and the people involved and keep checking/in regular communication whether that be with your potential buyer, successor or adviser to ensure you have the most up to date market information.


It is important for the resilience of your Practice to regularly assess your exit plan opportunities, generate strategies surrounding these as well as reassess and align as required.  Likewise, you want your employees and other people (like your loyal patients) who rely on your organisation to remain looked after – something a good exit plan should enable.  A successful business transition will result in an ongoing relationship with the new owner which will be positive and beneficial for all concerned, including the patient base.