Optometry practice due diligence

By the time an optometry practice reaches due diligence, the seller’s numbers have already sold you on the opportunity. Diligence exists to check whether those numbers actually hold up once tested — and in this sub-sector, several of the most important checks are specific to how the practice is structured, not generic small-business items.

Testing the recall list against actual bookings

Do not accept a total patient-of-record count as evidence of a healthy recall base. Ask for the practice management system’s own reporting on how many active patients actually returned for their most recent scheduled exam, and cross-check the recall percentage the seller quotes against that underlying data rather than a summary they’ve prepared. A recall list that looks strong on paper but tests weak against real booking history should change how you price the exam side of the practice, not just how you feel about it. Ask for at least two full years of appointment data, not one, so a single unusually strong or weak year cannot pass itself off as the normal pattern.

Confirming dispensary supplier and lab agreements are assignable

Request every material dispensary supplier, frame-brand and lab agreement, and get written confirmation — not a verbal assurance — that each one is assignable to a new owner on the same or comparable terms. An agreement that turns out not to be assignable can materially change the dispensary’s economics under new ownership, and finding that out after closing, when you have no leverage left to renegotiate the purchase price, is a genuinely expensive place to discover it.

Auditing diagnostic equipment age and remaining life

Request maintenance and service records for OCT, visual field and retinal imaging equipment, along with any information on manufacturer support and expected remaining useful life. Diagnostic equipment sits on its own capital-intensive replacement cycle, and a piece of equipment nearing the end of that cycle is a near-term cost you should be pricing into the deal now, not discovering as a surprise capital expense in year two.

Confirming patient records will actually transfer

Review the practice’s consent and privacy documentation to confirm it genuinely supports transferring patient records and exam history to you as the new owner, under applicable federal and provincial privacy rules. This is a documentation check, not an assumption — ask to see the actual consent language rather than taking the seller’s word that patient records automatically transfer with a practice sale.

Confirming the ownership structure actually works before you close

If you are not a licensed optometrist, have your lawyer confirm — concurrently with the rest of diligence, not after — that the management services organization structure you are relying on is genuinely available in the province where the practice operates and that a licensed optometrist is lined up to hold the clinical entity. A buyer whose registration or ownership structure isn’t actually finalized by closing is one of the more common reasons an otherwise sound optometry practice deal fails to close on schedule, and it is entirely avoidable with earlier verification.

Reviewing employment terms for opticians and associate optometrists

The exam schedule and dispensary floor both depend on staff who are not the selling optometrist, so request employment or contractor agreements for any associate optometrists and opticians, including whatever non-solicitation or non-competition terms apply, and confirm with your lawyer whether those terms would actually hold up if challenged. Find out how long each associate and optician has been with the practice and whether they are aware a sale is happening — staff who learn about a pending transaction informally are more likely to start exploring other opportunities before you close, which can quietly erode both exam capacity and dispensary sales before the deal even completes. Where the seller allows it, speak with key associates directly rather than relying solely on the seller’s characterization of how committed everyone is; a signed agreement to stay through the transition is meaningfully stronger evidence than a verbal assurance, and getting that confirmation before closing is far easier than trying to negotiate it afterward.

Checking the payer-mix trend, not just the current snapshot

Request several years of billing and remittance records broken down between provincially covered exams, private insurance and private pay, rather than accepting a single current-year payer-mix figure. Provincial coverage rules for eye examinations differ and change over time, so a practice’s payer mix today is not necessarily where it will sit in two years — comparing the trend against the practice’s own historical filings tells you whether the current mix is stable or already shifting, and whether the practice has weathered a coverage change before without a major revenue disruption. This is a documentation exercise, not something to take on the seller’s summary alone: ask for the underlying remittance data and reconcile it yourself, or have your accountant do so, before you rely on the payer mix as part of your pricing or financing assumptions.