When and how does the process of professional transition begin? It starts with a new “retire-mentality”. Conventional retirement conjures the image of a sendoff with a gold watch at age 65 , but our field has professional role models who remained vital and productive beyond that point: Harold Solan, Don Getz, and Bob Sanet prominently among them. I therefore decided to similarly re-write the conventional script, mentoring others to continue the legacy that we had built. Re-defining one’s role in and relationship to the practice is essential to this process, anchored in the Psychology of Reinvention.
To the extent that others can learn from our experiences, I’ll recapitulate the journey to this point and why I’m not “retiring” in any conventional sense.
In late 2015, I targeted May 2017 as the date by which I wanted to extricate myself from day-to-day practice management. This would mark 40 years in the profession, and at age 65 I’d be handing over the reins of ownership to the right buyers. I figured it would take at least one year to accomplish. I was chatting with our practice consultant, Toni Bristol, about another matter when I mentioned this, and she made the introduction to a potential buyer. Although that didn’t materialize, it was a valuable learning experience because it crystallized what we were looking for, and what we were not.
Three components to the sale were specified:
a) Value of the Practice Assets
After speaking with a number of colleagues, I narrowed down my choices for the practice valuation to three highly recommended consultants. I prepared a Powerpoint of the practice so that the consultants as well as the potential buyers would have a detailed reference: Family Eyecare Associates – Practice Space Photos – Press 2016 I elected to use Scibal Consulting.
b) Value of the Real Estate
A fair market value was derived based on a prior assessment, and comparable commercial real estate value for office building space in our area.
c) Value of Consultation Services
I envisioned maintaining the same patient care schedule that I had over the previous three years, from which the yearly practice assets had been calculated, and determined an equitable value for these services.
After letting my plans be known by word of mouth, we listed the opportunity to purchase the practice with COVD, our state optometric association, and the websites of PCO and SUNY. A day after listing it, on July 15 of last year, Dr. Laura Knapp contacted me to learn more about the opportunity. We had fielded several other inquiries, but it was apparent from the outset that Dr. Knapp and her husband (Justin) were seriously interested. Laura had been a vision therapist with Dr. Mike Gallaway in NJ, and did an externship in our practice as a student in 2010.
Discussions went very smoothly between us on the three components of the sale: the practice calculation, real estate value, and consulting agreement. We anticipated that once third parties got involved, regarding the legal and financing aspects of the transaction, the pace of the deal would slow – as it did. The key was that whenever the process bogged down, we kept the lines of communication open between us.
The ability to pick up the phone, or to meet without the attorneys, accountants, and bank reps being present to impose their point of view, enabled us to focus on what was in our mutual best interests. As well-meaning and experienced as these advisors can be, they do not have the fundamental knowledge of what our practices are all about. While it’s impossible to say that the way we went about the process is a blueprint that would work for everyone, it will hopefully serve as a model for similar agreements.