Investing and Taxes for Optometry Business Owners

Feb 18, 2019
3 min read
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Investing and Taxes for Optometry Business Owners

Dr. Matthew Geller, OD, Adam Cmejla, CFP, and Gary Topple, CPA discuss what investing and taxes mean for seasoned and new practice owners alike, as well as some tips to get the most out of your practice.

Operating your own practice rather than practicing independently elsewhere is a big step.

“The number one mistake I see older ODs fall into is thinking that their practice is worth way more than it actually is,” Cmejla says. As the saying goes, don’t put all your eggs in one basket. “They think they’re going to sell their practice and take this huge chunk of money and retire down to Costa Rica.”

Unfortunately, this trend is not isolated to optometry. Business owners from all walks of life treat their business as their ultimate financial fallback. As business owners themselves, all three share the sentiment but recognize that you have to look at the business through a different lens to properly plan. You’ve put everything into your business, you want to see it succeed, and it can, but it can only do so with proper proactive planning and the help of your advisors.

Preparing to sell your practice and retire is well and good, but you cannot overestimate how much “ammunition," how much of your net worth will be available to you in retirement because of a liquidity event when you sell your practice.

For young healthcare professionals who are operating their own practice, keep in mind that your business can be a tremendous resource to build up worth over your career and function as a liquidity event down the road. Ultimately, knowing your practice’s value and understanding its role in your finances is essential.

As the practice grows, you still have to diversify your portfolio

Reinvesting in the business can help to grow that nest egg, but you also must invest in the future. Working with an advisor can offer you the opportunity to plan for both your business today and your retirement down the road.

As a young healthcare professional, working as an associate with the intention of ownership, you can offer tremendous value to the current owner by having a proactive conversation about succession planning. Consulting a CPA for proactive planning can lead to a much cleaner transition from one owner to another rather than the senior doctor saying “...I’m hanging it up this year, I’m going to sell my practice, and I’m going to give you all of my shares, and we’re good to go.”

Proper planning for a transition of ownership, either in the process of signing an employment agreement or in the early stages of that transition can make a dramatic difference. Working with a CPA can help you to navigate the complex tax code and deduct all reasonable expenses, so keep that in mind as you begin the process!

About Dyllan Thweatt

Dyllan is a UC San Diego graduate and the Associate Editor for NewGradOptometry and CovalentCareers. In his time out of the office he is also a full-time Dungeon Master, pet dad, and an avid tea drinker.