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Optometry practice buyers: Take a closer look at these parts of the profit and loss statements before purchasing
By Maria Sampalis, OD
Jan. 29, 2026
I recently talked to an optometrist about her interest in buying a practice. The numbers just didn’t make sense. Over the last three years, the practice hadn’t been performing well. The owner explained that the loss in revenue was due to seeing fewer patients and working fewer hours.
However, when buying a practice, three consecutive years of declining revenue is a red flag. Here are some key things to evaluate when reviewing a practice’s profit and loss statement:
1. Gross Income
Gross income is important to review in order to see how much fluctuation there has been and to assess growth potential. Interestingly, the lower the current growth, the more opportunity there may be to expand the business.
For example, if a practice grosses $500,000 a year and sees around 1,500 patients annually, there’s a great opportunity to increase revenue by adopting a medical model, cutting unnecessary costs, or adding new equipment.
In contrast, a practice that already grosses $1.7 million may not have as much room for growth. On average, most practices grow by 5-7% per year, but imagine purchasing a $500,000 practice and growing it by $200,000 just by implementing a stronger medical model.
2. Net Income
Net income is equally important. I’ve seen practices that gross $2 million, yet the doctor only takes home $100,000. Compare that to another practice grossing $500,000 where the doctor takes home $250,000—a huge difference.
When evaluating a practice, look at:
- Its location and building size
- The level of competition in the area
- The quality and size of the staff
- What new value or services you can bring that the current doctor hasn’t implemented
Sometimes, purchasing a smaller practice may actually be the better opportunity. Larger practices often come with additional headaches—such as staffing challenges and the need for more associate doctors.
3. Cost of Goods (COGS)
Cost of goods is another critical area to evaluate. Ideally, COGS should be around 30-35% of gross revenue, but in some practices, it can climb as high as 50%.
To decrease your COGS and increase your bottom line:
- Look for rebates on contact lenses through buying groups
- Consider discontinued frames that still offer excellent quality at a lower price
These strategies can help you reduce expenses while maintaining value for your patients
4. Staffing Levels
Too many staff members can be a red flag when purchasing a practice. Staffing costs should make up about 25-30% of gross revenue. In many practices, this number is closer to 50%, which indicates the office may be overstaffed or employees are overpaid for their roles.
Cross-training staff is essential to ensure efficiency and flexibility within the team.
5. Technology and EHR Systems
Many older practices still operate without an EHR (electronic health record) system. While this can lower the purchase price, it also means more work for you in the long term.
If you purchase such a practice, implement an EHR system from day one. Collect patient emails and phone numbers for recalls, and start scanning old charts.
If the previous doctor primarily performed refractions—which is common in older practices—this presents a great opportunity to modernize and build from scratch.
Remember, you’re required to keep records for at least seven years, though I recommend retaining them for ten years to ensure access if needed.
Read another article by Dr. Sampalis here.
Read more on buying a practice here.
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Maria Sampalis, OD, is the owner of Sampalis Eye Care in Cranston, Rhode Island. She is also the founder of Corporate Optometry on Facebook. Dr. Sampalis is also founder of the job site, corporateoptometrycareers.com. She is available for practice management consulting. To contact her: msampalis@hotmail.com |
