The four criteria needed to put a plan into place

MICHAEL GORMAN, O.D., BRIDGEPORT, CONN.

I recently retired from my 50-year-old practice at age 77. In realizing how much the community valued it — patients have been coming for 30 to 45 years — I wanted to ensure it continued to offer the same high level of care after I retired. Therefore, I began preparing for a succession plan.

Here, I explain the criteria needed to accomplish this.

Older age

Optometrists younger than age 50 usually don’t have the foresight to think about retirement. Their minds are, understandably, on other areas of the practice, such as patient service, diagnostic technology and managed care.

By age 50, however, many are comfortable enough with their practices to start thinking about retirement. That said, most optometrists don’t consider succession as an option until they are age 60 to 65. At this point they think, “I’m not too many years away from retiring, so I should start considering this.”

DR. GORMAN WITH DAUGHTERS KRISTINE HESLIN AND KATHY RAUCCI.

A large practice

The larger the practice, in terms of revenue, doctors and employees, the earlier you, the practice owner, should start thinking about your succession plan, with regard to “who” is going to run your practice once you retire.

This requires you to examine the roles each of your employees play in the current success of your practice to ensure they remain in those places after your departure. In addition, you must identify your practice’s “leaders,” and ask these individuals where they’d like to be in your practice in the future. Never assume optometrists want to own a practice. The truth is some are happy being employees. For this reason, vet all your employees.

In the case of my two-location practice, I turned over its operation to my daughters, who have been the practice’s managing partners. Further, I retained a small percentage of ownership, so that if another person expresses an interest in becoming part owner, and I believe that person would make an excellent contribution to the practice, I can sell my small share to that person at an appraisal rate.

Leadership skills

Once you’ve identified the person who is going to run your practice, you must begin developing his or her leadership skills.

For example, you could show him or her how you determine whether the purchase of a new technology is a good one, so that person will use this thought process after you retire.

Personal protection

Another criterion to preparing for succession is protecting yourself from practice litigation. Given our litigious society, you should create an LLC, PC or C corporation for the practice. This way, your personal wealth won’t be affected by a possible lawsuit brought against the practice. In addition, doing so makes your practice’s assets much easier to value.

Top priority

Optometrists who prepare for a succession plan are laser-focused on having their practice continue to render high-quality primary eye care. To do this, it’s essential the practice owner has the “right” people to carry the practice on. Once you meet the aforementioned criteria, turning over the reins of your practice is easy. OM