Three Key Factors to Include in an Optometry Business Plan
When reviewing a financing application for an optometry business loan, a financial advisor considers several factors to assess the project’s viability and the borrower’s ability to repay the line of credit. What follows are three key factors that must be covered in an optometric business plan so that you and your advisor can make an informed decision.
1. Market Analysis
Sector demographics are the first important item in a market analysis. You’ll want to include factors such as growth trends and population age group, household income and unemployment rate estimates.
Market size is also crucial. If you’re starting a new project, the target market must be able to support another optometry practice. Ideally, there should be one practice for every 10,000 people. However, we commonly see one practice for every 3,000 residents in densely populated urban areas.
2. Competition
The market analysis should also cover the sector’s competitive environment. Are you expecting a high concentration of optometry practices in the area? An analysis of current and future competitors in the surrounding area is necessary, as heavy competition could affect your business’s viability. Selecting a strategic location is therefore essential to the project’s success.
Be sure to add a section that mentions what differentiates you, such as specializations, ease of access, and convenient business hours. They will show the advisor that the submitted projections are achievable.
If you’re buying a business rather than starting one up, a non-compete clause covering a defined radius will be needed to maintain the practice’s clientele.
3. Projections
One best practice is to have your accountant prepares three projection scenarios.
These are a realistic scenario, an optimistic scenario and a pessimistic scenario. The pessimistic scenario has taken on particular importance with the pandemic, for both the bank and you: What will happen if you achieve only 80% of your expected revenue? Are you still as enthusiastic about the project? Do the numbers work out?
Your bank may also require it to ensure that the project remains viable should any unforeseen event occur. An unforeseen event may look like this: The building owner gives you three months’ free rent, but the opening is postponed due to delays, and you must start repaying your loan and paying rent before you’ve made any sales. Delays in renovation work or equipment and inventory deliveries are also common and may impact your operations.
Preparing an optometry business plan is therefore a crucial exercise for both you and the professionals who will support you through your endeavours. It will help facilitate your decision-making and give all stakeholders confidence in your project. Vision Entrepreneur Experts can guide and give you helpful tips when writing down your business plan for your optometric practice. Contact Vision Entrepreneur Team to know more about their services.
Guillaume Dulude is a professional working in the financial field who cares about the success of tomorrow's entrepreneurs.
