Vision One Supports Private Optometric Practice Transitions One of

JULY 2007 EDITION
Vision One
Supports Private
Optometric Practice
Transitions
One of the most important aspects of our work at Vision One Credit Union
is to help transition optometrists in or out of private practice.
For new doctors, we strive to reduce risk and simplify ways
to enter private practice as an owner or as an associate. For
retiring doctors, we offer multiple options for a graceful,
lucrative exit strategy.
Our goal is to help individual O.D.s realize the full financial
benefits of private practice optometry. We began by obtaining
industry information regarding the barriers to entry and
exit. Information was obtained from our friends at the UCB
School of Optometry, SCCO, the COA, Vision One’s Board
of Directors (all private practice O.D.s) and key optometrists
in the community.
Our research indicated the top barriers to entry are: a need
for immediate income to pay student debt, the inability to
find a practice to work in or buy and the mystery of how to
complete an acquisition (the “process”). The cost of not
overcoming these obstacles is more O.D.s entering corporate
optometry.
The barriers to a timely exit include unfamiliarity with the
sale process, lack of knowledge of what buyers want from
a practice, concerns about adequate retirement income
coupled with a desire / need to slow down but not totally
quit. Our experience indicates an unplanned exit often
results in a deteriorated practice with diminished value.
To address these problems, we employed a staff of
seasoned commercial bankers who understand the needs
of the independent optometrist. We then setup the white
board, listed problems and brainstormed solutions. The
solutions took the form of a) loans with special features to
maximize seller’s practice value yet minimize buyer’s risk,
b) financial education to bridge the expectations gap between
buyers and sellers, c) establishment of a team of experts to
support each step of a sale/purchase, and d) hands-on live
support from our staff for all banking services. Some of
the needed loan features were outside the scope of banking,
so our friends at VSP were glad to provide them.
Testimonials received from O.D.s benefited by these programs
were very favorable. We have offered the programs to the
general optometric community since 2004. A summary is
presented below.
Entry to Private Practice
Transaction Facilitators – To help alleviate the “process
problem”, Vision One (in California) has assembled a team
to help doctors locate, value, negotiate and document an
acquisition transaction. This referral network consists of
transaction facilitators (brokers, appraisers, accountants
and attorneys). We also provide practice buyers the tools
to help understand and determine expected cash flow. To
alleviate buyer stress, our staff will help you setup your
Vision One business checking account.
(continued on pg 2)
(AQUISITIONS...continued from pg 1)
Acquisition Financing – Vision One acquisition loans are designed to increase the probability of success for new
practice owners. This is accomplished through reduced loan payments to maximize cash flow in the initial years when
the risk is highest for new owners. The results are many new buyers enjoying net income equal to or higher than
corporate practitioners. We also build in a few safety nets to help reduce the fear factor of a new acquisition.
We developed partnership loans for doctors to buy into a practice (partial ownership). The business risk is substantially
reduced for the new owner as the senior doctor(s) remain in the practice and provide mentorship.
Associates – Through our Vision Loans program with VSP, loans that can help senior doctors pay for the cost to bring
in an associate are available. This provides more opportunities for new doctors to enter and eventually buy a practice.
Vision One Credit Union is there every step of the way to help practice buyers. As part of our loan application
process, we take the time to educate doctors about the key points of a practice acquisition, including the results of our
financial analysis.
Exit Private Practice (Retirement)
Partnership Loan (partial ownership) – We pioneered this loan product with
VSP to allow senior O.D.’s to start the transition process before the practice
declines. The loan allows the senior doctor to take cash out now and phase
into retirement over time. For example, you can sell 25% of your practice to
your associate or new doctor in order to lock them in for eventual succession.
This allows you flexibility in your work schedule yet you retain control of the
practice. You can sell the remainder of the practice to your new partner at a
later date (i.e. 3 years or more).
Acquisition Loans – For retiring doctors who want to sell 100% of the
practice. We can facilitate your tax planning needs by accommodating partial
seller notes.
Transaction Facilitators – The facilitators (described above) can help you
prepare your practice for sale as well as locate and negotiate a buyer.
Associates – This Vision Loans product provides loans to help senior doctors
pay for the cost to bring in an associate. This can lead to the start of an exit
plan and eventual sale of the practice.
Vision One Education
We provide written materials (such as this newsletter) in addition to presentations
at industry events and optometric colleges about many practice transition
topics. Some of our more popular presentations include practice valuation,
determining practice net cash flow and what buyers look for when purchasing
a practice. All of our educational services are complimentary.
In conjunction with one of our key O.D. friends, we are currently developing
models to compare the economic differences between private and commercial
optometric practices. We anticipate using the data to present to the optometric
college students around the country.
As a non-profit financial institution and an industry resource, we at Vision
One are proud to do our part to advance private practice optometry. Vision
One always re-invests your deposits back into the independent optometric
community. On behalf of Vision One, I want to thank you for your continued
support. Your business keeps us strong and able to focus our time and
resources to solve industry problems.
Bob Schultz
President & CEO
Vision One Credit Union
Advancing Independent Optometry
Board of Directors
A. Nick Gutierrez, O.D., Chairman
Beryl Bechtold, O.D., Vice Chairman
Thomas Wing, O.D., Secretary/Treasurer
Richard Cantor, O.D.
Steven Omoto, O.D.
Supervisory Committee
Edward Andersen, O.D.
Larance Larson, O.D.
Stephen Wright
Bob Schultz, President/CEO
Office Address
3279 Ramos Circle
Sacramento, CA 95827
Phone/Fax Numbers
800.327.2628 Toll Free
916.363.4293 Phone
916.363.4298 Fax
888.777.7505 24 Hour Account Manager
Business Hours
Monday-Friday, 8am-5:30 pm P.S.T.
Website/Online Banking
www.visionone.org
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may apply. For more details contact Vision One Credit Union.
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