We act for purchasers and vendors in optometry business sales and acquisitions, from independent single-site practices to multi-site franchised stores. From either side of the transaction, the same holds true: the businesses that attract strong offers and continue to thrive after settlement are those built for a future without the vendor - work that is done long before a deal is struck.
A purchaser buys future performance and needs confidence that the business will keep trading at the same level once the vendor steps away. A vendor sells accumulated value and needs it recognised in the price and protected through to completion.
Succession planning is too often put in the ‘too hard basket’ until retirement comes around. But at every stage of ownership, there are practical steps owners can take to prepare their business for life after sale, ensuring value for themselves and purchasers.
What are you actually selling or buying?
Negotiations around buying or selling usually fixate on price. Price is the easy part; what sits behind it is where deals succeed or fail. At any stage of the business lifecycle, every owner should be able to answer one question: what would a purchaser actually be paying for? The answer is rarely revenue alone.
A purchaser needs to know precisely what is included and whether it will keep producing income after settlement (even when the vendor is gone). In an optometry business, that usually means the diagnostic and pre-testing equipment, frame and contact lens stock in the dispensary, the patient database and recall system, private health fund and HICAPS arrangements, supplier and lens laboratory terms, employed optometrists and dispensing staff, the business premises, practice management and clinical software, branding - and most importantly the goodwill in the business built over years of trading.
Goodwill is usually the largest item in the price and the most intangible and fragile. It reflects the practice’s reputation, the patient base, and referral relationships, all of which drive the likelihood that patients keep attending after ownership changes. Although goodwill ‘transfers’ automatically at settlement, realising its value requires confidence that patients are attached to the business rather than to any outgoing optometrist personally.
Legal due diligence is essential for testing that assumed value. Done properly, it surfaces hidden problems while there is still time, and leverage, to fix them: supplier, buying group or franchise agreements that cannot be assigned or aren’t properly recorded; historical patient complaints or AHPRA notifications; or key optometrists and dispensers working without written terms.
Fix the structure before settlement
The most consequential decision in an acquisition is usually made long before a contract is signed: who or what will own the business? Optometry is not subject to the ownership restrictions that apply in some other health professions, so owners have real choice here. The structure chosen drives tax on trading profits and on any eventual sale, the asset protection available, how easily other owners can be introduced, and the options open at future exit.
A structure that suits a single owner today can become an obstacle when other owners join, a second site is acquired, or the owner wants to sell down over time. Restructuring later is usually possible, but slower and more expensive than getting it right at the outset.
Business ownership is usually part of a wider wealth strategy. The right structure depends on the owner's personal position, tax profile, timeframe and what they want the business to look like in the long term - not only the transaction in front of them.
The lease is an asset, not an afterthought
Most optometry businesses, trade from leased premises, which makes the lease one of the most valuable assets in the transaction, and one of the most common causes of delay. A strong business in a good location loses value fast if the remaining term is short or renewal is uncertain: a purchaser is buying the location as much as the business, and shouldn’t pay for something they may not keep.
Purchasers should understand how much time remains on the lease, whether options to renew are available, any rent review provisions, assignment requirements, and whether landlord consent is required before settlement.
Lease issues rarely stay contained. A short or uncertain term affects what a bank will lend, when settlement can occur, and whether the business can be expanded or refitted, all of which can feed back into the price.
Vendors should address this early. Exercising an option or negotiating a longer term before going to market is one of the cheapest ways to protect value and remove an obvious point of leverage from a purchaser.
Preparing for exit is preparing for success
Most owners turn their mind to succession when they are ready to leave, by which point the options have usually narrowed. The businesses that transition well are almost always the ones where the groundwork was laid years earlier.
Purchasers want a business that keeps running through the handover. A business that depends on the owner's personal following is harder to transfer, attracts fewer buyers, and is more likely to be priced with a long transition or deferred component attached.
Every owner should ask themself whether another owner could step into their role and have the business continue to produce value beyond their personal efforts. The answer determines how many buyers look at the business, what they pay, and how much of the price depends on the owner staying on after settlement.
The same logic applies when an owner’s exit is unplanned. In a single-optometrist business, the risk is acute: where the owner is the only registered practitioner, illness, injury, incapacity or death can stop the business trading almost immediately, and years spent building a valuable business can be lost. Without the appropriate guardrails, the family or estate is left trying to sell a business that is no longer operating.
Shareholder or unitholder agreements, buy-sell arrangements backed by insurance, enduring powers of attorney and up-to-date estate planning documents are what keep a business operating and saleable when an owner cannot run it.
These issues are easy to defer during periods of growth, but far easier and less costly to address before a triggering event occurs.
Looking beyond the transaction
Acquisition and succession are intertwined events at the opposite ends of the ownership cycle: a purchaser wants to buy a business that keeps performing without the person who built it, and a vendor is paid for having built exactly that.
Those outcomes are not created by the sale contract alone. Real value is built through a future-proofed ownership structure, secure premises, reliable systems, properly contracted staff, and a business that can operate beyond the efforts of one practitioner.
We act for businesses and professionals in optometry and across the broader medical, health and allied health sectors, advising on matters such as sales and acquisitions, leasing, ownership structures, employment, contracts, compliance, governance, policies, business, succession planning and asset protection.
Whether you are buying a business, planning for growth, or preparing to step back from consulting, the choices you make today will shape the options open to you in the future. Please contact Burke Lawyers to discuss how we can assist you and your business.
