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Valuing an Optometry Business

Valuing an Optometry Business

The eye care industry is growing. The population is aging, incomes are increasing, and there is rising awareness of the importance of eye health. Despite economic changes, this industry remains steady. According to IBIS World, about 75 percent of the adult population needs corrective eyewear. The steadiness of the industry is appealing if you are looking to buy an optometry business. Whether you are buying, growing, or selling an optometry business the first step is to understand the value of an optometry business. Below we discuss factors a business appraiser considers when valuing an optometry business. 

Peak Business Valuation, business appraiser, works with dozens of individuals who are buying or selling an optometry business. The best way to understand the value of an optometry business is through a business valuation. In a valuation engagement, we discuss key factors a business appraiser uses in valuing an optometry business. Schedule a free consultation today with Peak Business Valuation, business appraiser to learn more. We are happy to answer any questions you have about valuing an optometry business!

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Market Multiples for an Optometry Business

The following are average valuation multiples for an optometry business. A valuation expert uses multiples when determining the value of an optometry business.

  • SDE Multiple Average Range: 1.96x – 2.67x
  • EBITDA Multiple Average Range: 2.97x – 4.06x
  • Revenue Multiple Average Range: 0.43x – 0.75x
**Disclaimer: These multiples are for educational purposes only. As such, the information provided does not constitute valuation advice. These multiples do not represent the valuation opinion of Peak Business Valuation or its valuation professionals. Instead, seek the guidance and advice of a qualified business valuation professional about any matter in this article.

How is an optometry business most often valued?

A business appraiser uses a variety of business valuation approaches to determine the value of an optometry business. The most frequently used cash flow multiples for optometry clinics are SDE and EBITDA multiples. A valuation expert, such as Peak Business Valuation, uses their expertise to determine which multiples and methods are best for valuing your optometry business.

The more you understand what impacts the worth of your optometry business, the easier it will be to increase its value. The following are a few suggestions to increase the value of an optometry clinic. These are helpful whether you are expanding, purchasing, or selling an optometry business. If you would like more specific information on your optometry business, schedule a free consultation. Peak Business Valuation, business appraiser, is happy to speak with you!

Key Success Factors

Peak Business Valuation, business appraiser, values optometry businesses across the United States. Below are several success factors to increase the value of an optometry business. In addition, these factors will distinguish your optometry clinic from others. A business appraiser at Peak Business Valuation, will analyze these key value drivers when valuing an optometry clinic. To learn more, schedule your free consultation. For additional ideas see Value Drivers for an Optometrist, Valuation Multiples for an Optometry Clinic, and How to Value an Optometry Clinic

Location

The first key value driver for an optometry business is the location. When picking a location it is important to consider the surrounding population and businesses. For example, an optometry office located in a densely populated area has a greater customer base to serve. 

Analyzing which businesses are near your optometry clinic helps you to know who to market to. Is there a nursing home nearby? Or maybe you are near a college or school district. Your marketing efforts may change based on the potential clients in the area. 

When valuing an optometry business, Peak Business Valuation, business appraiser, considers the location. For additional information, schedule a free consultation today.

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Reputation

Next, do your clients have good things to say about your optometry clinic? Reputation has an impact on the value of any business, but especially for an eye clinic. The need for yearly eye exams means you have the opportunity to have multiple recurring customers. In addition, loyal customers refer new customers to your clinic. 

Reputation shows in google reviews, repeat clients, and the number of new clients your office attracts. Peak Business Valuation, business appraiser, analyzes each of these when valuing an optometry business.

Payment Options

The last success factor for an optometry business is the payment options. There is a variety of methods clients use to pay for eye care. This can include various insurance including Medicare and Medicaid. In addition, clients payout-of-pocket and use health shares. Analysis of the most common payment methods for customers in your area is vital for an optometry business. 

More people are choosing to opt out of insurance and pay out-of-pocket or via a health share. It is important to provide payment options for them. The more inclusive payment options you have, suited to the surrounding population, the more clients you will attract.

A business appraiser, such as Peak Business Valuation, always considers payment options when valuing an optometry business. They then compare these to similar eye clinics and industry averages. 

Summary

The key success factors mentioned above will help you to enhance the value of an optometry business. Understanding how to increase the value of an optometry clinic is important. Whether you are looking to buy, sell, or grow an optometry business you can understand the fair market value by obtaining a business valuation. This will assist in identifying the strengths and weaknesses of your optometry business.

Peak Business Valuation, business appraiser, values optometry businesses across the country. We love answering questions about valuing an optometry business. We are also happy to help you better understand the value of an optometry business through a business appraisal. Reach out by scheduling a free consultation!

 

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