Thinking of Starting a Practice From Scratch
Starting your own business is one of the most rewarding and challenging things you can do particularly in independent optics where you are likely to be the clinician as well as the business owner. Sometimes it’s fun, and other times it is emotionally and financially draining. Making the right decision as to whether starting an independent optical business from scratch or purchasing an already established practice is something that requires much consideration and research.
To make sure you know what you’re getting into and prior to developing a full business plan consider the list below:
Starting from Scratch
• You will be able to open on your terms with your choice of shop fit, equipment and offering your choice of services and specialities.
• Where will your patients come from? You will have to commit to a significant amount of marketing spend in the first 2-3 years from setup.
• You do not know with any degree of certainty what your takings will be and could have difficulty arranging funding from a bank.
• You will have to carry the overheads for a period of time until the turnover grows to a level where profits cover the overheads.
• You may have difficulty obtaining credit from suppliers due to the lack of a self-employed business track record.
• You may make mistakes in your buying as you will be learning what your customers want as you go along.
• You will be vulnerable to conflict from a well-established local competitor who will want to keep their customers.
• You must accept local competitors will have sourced the most competitive suppliers over the years and may have reduced their borrowings, and could therefore survive a price cutting war better than a vulnerable new business.
• You will need to decide on your own unique selling position and work hard to establish and build your brand which can be costly.
• Can you afford to pay staff whilst gaining patients and if not how will the practice run whilst you are in the testing room?
Buying an existing practice as a going concern
• You will be buying the “goodwill” of the business.
• You are taking over an already established brand.
• You will have a business with a known past performance and you can arrange suitable bank funding.
• You have a known cash flow from an existing customer/ patient base from day 1.
• You may be able to negotiate/ transfer established terms with suppliers.
• You will have a good idea of customers needs from past buying records of the business.
• You will not be required to separately purchase fixtures, fittings and equipment nor will you need to recruit staff prior to opening.
• You will have an insight to turnover, than desperately hoping your business plan was accurate.
• In buying an existing practice you are taking the guesswork out of the financial equation and immediately acquiring a larger piece of the action than you would setting up from scratch. With this “goodwill” can be seen as the value of the reduced risks which buying an existing business can provide and as payment for the market share that business has achieved.
To find out more why not contact Myers La Roche who are the only Business Transfer Agent in Britain and Ireland who specialise in the Independent Optical Market and have over 20 years of expertise in helping purchasers obtain their business goals.
Joanne Coffey, Practice Sales Negotiator, 0161 929 8389.