Finances

How to Reverse Engineer Profitability in a Multi-Doctor Practice

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A practical guide for aligning your business structure with the income you want to earn

By Adam Cmejla, CFP^®

Oct. 15, 2025

In a recent article of mine, I outlined how solo practice owners can build their practice backward—starting with their personal income goal and reverse-engineering the business to support it. The key metric in that article was Earnings Before Owner’s Compensation (EBOC).

But as your practice grows and you bring on more optometrists, the structure becomes more complex, and your income is no longer solely based on your clinical production. Instead, your ownership income depends on the profitability of the business as a whole.

That’s where Optometric Net becomes your most important metric as you work your way towards Net Operating Income (NOI).

WHAT IS OPTOMETRIC NET?

Optometric Net is the total profit of your practice before any OD salaries are paid—including yours as the owner. It’s the amount of profit left after covering all other expenses but before paying any optometrists.

This is the bucket from which all OD compensation is paid, whether they’re owners or associates. Whatever is left after those OD wages becomes your NOI.

In a healthy, one-location, multi-doctor practice, Optometric Net should be at least 27% to 30% of collected revenue. After you pay your ODs—standard range is starting around 15% of their collected revenue—you’re left with 12% to 15% NOI, which becomes your true ownership income.

MEET DR. JONES

Dr. Jones owns a large, single-location practice with six full-time equivalent ODs, including herself. She sees patients part-time and is compensated fairly for that work, but she wants to ensure the business generates an additional $600,000 per year in ownership income (NOI).

She isn’t chasing growth for the sake of growth. She’s building a business that can support her goals, compensate her team well and still reward her for the risk and responsibility of ownership.

Step 1: Define the Target NOI

Dr. Jones wants to earn $600,000 per year in NOI. Assuming a healthy 30% Optometric Net split:

15% of revenue to pay all OD salaries
15% retained as NOI

$600,000 (NOI) ÷ 15% = $4,000,000 in total revenue

To hit $600,000 in NOI with this model, Dr. Jones’ practice needs to collect $4 million per year.

Step 2: Capacity Check—Can Six ODs Produce $4M?

Now that we know what the total topline revenue of the practice needs to be, we must reconcile that against the limiting commodity in each practice: available clinical hours.

If we look at the clinical schedule and conclude that each OD works 32 clinical hours per week for 48 weeks per year equals 1,536 OD hours annually, then we know that the total capacity of the practice is: 6 ODs × 1,536 OD hours per year = 9,216 total OD hours per year.

Looking at big goals like this is both intimidating and unactionable. Our brains—from a business POV—don’t know how to measure our progress.

But what happens if we break it down into something easier to measure? What if we looked at the revenue that the practice needs to generate hourly to make the annual goal possible?

Doing the math, we realize that $4,000,000 ÷ 9,216 = $434 per OD hour (required).

Professional standards suggest that $500 per hour is an acceptable target and less than or equal to $700 per hour is very good in private practice. With this in mind, the goal of $434 is very achievable.

If ODs average $500 per hour:

$500 × 9,216 = $4,608,000 in revenue
30% Optometric Net = $1,382,400
OD compensation (15%) = $691,200
NOI = $691,200

If ODs average $700 per hour:

$700 × 9,216 = $6,451,200 in revenue
30% Optometric Net = $1,935,360
OD compensation (15%) = $967,680
NOI = $967,680

Either way, Dr. Jones meets or exceeds her $600,000 NOI target.

Step 3: Understand the Profit Flows

Here’s the structure and how it looks in a practice, starting with topline revenue:

$4M to $6.5M in total revenue
70% to overhead
30% Optometric Net (approximately $1.2M to $1.9M)
15% to pay OD compensation
15% retained as NOI

This structure ensures:

Fair OD pay with upside potential for both ODs and owner profit
Scalable margins
Consistent ownership income

Step 4: What If Your Practice Falls Short?

Owners must realize that it’s up to them to mind their numbers. What gets measured gets managed, and what gets managed improves. In other words, what you focus on expands. If Optometric Net is 25%, and OD compensation is still 15%, NOI drops to 10%. The practice owner pays for the inefficiencies in the practice and their personal income goals take the hit.

To hit $600,000 NOI at only 10% margin, the gross revenue of the practice must increase to $6 million in revenue ($600,000 ÷ 10%).

YOUR PROFIT PLAN STARTS AT THE BOTTOM (AND WORKS ITS WAY TO THE TOP)

As an “intentional owner,” Dr. Jones didn’t build her business by asking, “What can we collect this year?” She asked, “How much do I want to take home—and what must the business produce to make that happen?”

While it’s easy to think about and focus on revenue growth, we have to break those numbers down. Don’t just focus on revenue growth. Focus on margins and flow:

How much of every dollar stays in the business after expenses?
How much goes to your doctors?
How much is left over for you?

When you understand those numbers, you stop guessing what your business is worth—and start managing it like the investment it truly is.

NEXT BEST STEPS

Set your NOI target as a dollar number. What do you want the practice to be paying you as the owner?
Assuming 30% Optometric Net and 15% associate compensation, divide by 15% to calculate your required total revenue.
Calculate your team’s clinical capacity. Total gross revenue ÷ Total OD hours = target hourly production (expressed in dollars).
Track relentlessly.
Make strategic changes. Improve fee structures, reduce inefficiencies, adjust staffing or schedules, etc.

When your practice is designed backward from your ownership goals, you move beyond simply owning a job—you own a business that rewards you for leading it and generates real returns on the investments you put into it.

Read part one of Adam Cmejla’s two-part series here.

Adam Cmejla, CFP^® is a CERTIFIED FINANCIAL PLANNER^TM and Practitioner and Founder of Integrated Planning & Wealth Management, LLC, an independent financial planning and investment management firm helping optometric practice owners nationwide “plan life, on purpose” by providing personal and professional CFO services. Check out the “20/20 Money Podcast” to get more tips on making educated and informed financial and business decisions and the “20/20 Money Membership” masterclass to help ODs become brilliant at the financial basics.