[Transitions] The Basics of Planning Your Exit From Optometry

Al Cleinman is the Founder of Cleinman Performance Partners, a leading consulting firm that has served as optometry’s trusted business advisor for over 35 years, specializing in practice transitions, growth strategies, and innovative solutions for eye care professionals. Under Al’s leadership, the firm has helped hundreds of optometry practices navigate complex transactions and succession plans, resulting in significant increases in business value and successful ownership transitions.

Megan McCarthy, Senior Director of Practice Transitions at Cleinman Performance Partners, leads a team that delivers custom consulting, financial analysis, and practice valuation services, guiding clients through every stage of the transitions journey.

Here’s a glimpse of what you’ll learn:

[02:33] Al Cleinman explains how weak legal foundations can jeopardize the sale of your practice
[04:53] Megan McCarthy talks about how practice assessments mirror comprehensive eye exams
[07:00] Pitfalls doctors face when planning practice transitions alone
[10:45] Why early succession planning pays off
[11:54] Why selling a practice is more complex than real estate
[15:05] The differences between succession plans and outright sales
[18:54] How associate buyouts often fail and what to do instead
[19:46] Maximizing tax advantages with long-term transition planning strategies
[24:45] The importance of expert guidance for a stress-free exit

In this episode…

Navigating the end of an optometry career can feel as complex as building it. For many practice owners, years of patient care and business growth come down to one defining moment: how to transition out successfully. What does it really take to plan an exit that preserves value, protects your legacy, and supports the kind of life you want next?

According to Al Cleinman, a strategist and leader in the optometry business space, the key is clarity — knowing what you truly want out of life and your practice long before you’re ready to leave. Megan McCarthy also highlights that early planning, ideally 3-5 years in advance, allows doctors to make smart financial and operational decisions that elevate the practice’s value. Together, they explain how foresight, documentation, and professional guidance turn what could be a stressful process into a rewarding next chapter for both the seller and successor.

In this episode of the Cleinman Connect Podcast, Kim Carson sits down with Al Cleinman and Megan McCarthy of Cleinman Performance Partners to discuss how optometrists can prepare for successful transitions. They share why early exit planning matters, how to differentiate between a succession plan and a sale, and what pitfalls to avoid in the process. They also give advice on building long-term value through intentional goal setting and preparation.

Resources mentioned in this episode:

Quotable Moments:

“Never get into a business you don’t know how to get out of.”
“Life is a banquet of possibilities. Seek and discover them. Feast upon them.”
“You have to have time to make mistakes.”
“Negotiations start at hello. And you have to be very, very careful.”
“Don’t go it alone, right? You just don’t have the experience and the number of deals.”

Action Steps:

Start planning your exit early: Beginning the transition process at least 3-5 years ahead gives you time to strengthen financials, test succession options, and avoid rushed decisions.
Document your goals and vision: Clearly outlining what you want from life and your practice provides direction and ensures your exit aligns with your personal and professional aspirations.
Conduct a comprehensive practice assessment: Evaluating operational, financial, and structural aspects early helps identify weaknesses, increase value, and prepare for a smoother transition.
Explore multiple succession options: Considering different buyers (such as associates, partners, or external investors) ensures flexibility and the best outcome for your long-term goals.
Work with experienced advisors: Partnering with experts in practice transitions prevents costly mistakes, optimizes deal structure, and safeguards the value of your life’s work.

Sponsor for this episode…

This episode is brought to you by Marketing4ECPs!

Working with them is like hiring a full-time marketing professional who knows the industry and understands your goals. Except, instead of one experienced marketer, you get a whole team in your corner.

Whether you’re an optometrist, ophthalmologist, or optician, they can help you grow your business with a plan that’s completely customized for you. Learn more here.

Episode Transcript

Intro: 00:07

Welcome to the Cleinman Connect Podcast, where we discuss marketing, ownership, growth strategies, and everything else surrounding the business of optometry. Cleinman is Optometry’s trusted business partner for over 35 years. Hello, I’m Kim Carson with Meghan McCarthy and Al Cleinman on this episode of the Cleinman Connect Podcast. Past guest of the show are Dennis Evans Jr. from DryEye Rescue and Sarah Vinson of Lunette, USA. This episode is brought to you by Marketing4ECPs.

Working with them is like hiring a full time marketing professional who knows the industry and understands your goals, except instead of one experienced marketer, you get a whole team in your corner. Whether you’re an optometrist or ophthalmologist or optician, they can help you grow your business with a plan that’s completely customized for you. Learn more at marketing than the number for marketing4ecps.com. And today I am joined by Al Cleinman himself. Feels like a man who does not need an introduction.

He is the Founder of Cleinman Performance Partners, an entrepreneur and a leader in the eye care community for more than 50 years and best known as a strategist, innovator and a problem solver. I am also joined by the Senior Director of Practice Transitions here at Cleinman, Megan McCarthy, perhaps a few less than 50 years in the industry, but she works with our optometrists from start to finish in their transitions journey, including financial analysis, valuations, employment contracts and purchase agreements. She and her team deliver custom practice, transitions, consulting and analytical services so our partners can successfully navigate everything from hiring a new associate doctor to large, complex exits. Thank you so much, you two, for joining me today.

Megan McCarthy: 01:55

Thank you. It’s a pleasure.

Kim Carson: 01:57

I always get through that and I’m like, okay, now it’s your turn. You just go. So I do want to start today. You know, I haven’t been with Cleinman for a huge chunk of time yet. Thank you for having me for the small amount of time that I have been here.

But the practice transitions and, you know, succession planning, exit strategies, all these agreements, they still are very, very new to me. So, you know what? What can I expect if I, if I need something from your team, what can I expect.

Al Cleinman: 02:33

Well, you know, I think I’ll, I’ll jump in here. I think the, the question really becomes your on doctor Jones optometrist is on a journey and I don’t care whether they’re 27 or 67. They have a journey ahead of them. And on the transaction side of the House, there’s succession planning side of the house. You know, we have a saying.

Never get into a business you don’t know how to get out of. And what happens is we look at the many, many, many hundreds of practices that we’ve looked at is that some of them are built like that great edifice in Italy, the Leaning Tower of Pisa. They’ve got this beautiful building. The practice is just gorgeous. It’s operating very, very nicely.

But its foundation, things like the legal agreements, you know, leases between owner doctor and himself as landlord, things like that are not in not where they need to be. And so as you look at succession and designing this long term approach, there are really three things that you have to think about. One is what do I want out of life? I’m on my journey. Here’s where I am, whether, as I said, whether I’m 30, 40, 50 or 60.

Here’s where I am. What do I want from my life? What do I want from my business? And how do I get there? And our succession planning work is as fundamental as that.

You know, most most people are on the road of life. Many, many, many people have very little documented goals or really know what they want. And, you know, I always, always say, you know, my journey is my client’s journey. I just happen to be older and at a different stage in life, and therefore, my own exit from my business or business is because I’ve done it a couple times. Now is part of my teachings.

So Megan, you I’m sure have something to add to that.

Megan McCarthy: 04:53

Yeah. You know, foundationally, our work is very similar to what our doctors do, right? You start out with an eye exam. Our eye exam is an assessment. We look at your practice, you know, as it is today, financially, operationally, structurally, looking at all the different components.

And then the result of your eye exam is a prescription. The result of our assessment is our recommendations. All right doc here’s what you want personally. Here’s what you want out of your practice. Here’s where you want to go.

Here are our recommendations to help get you there. So our process is really no different than what they do in the exam lane. It’s just looking at the practice holistically.

Kim Carson: 05:31

Yeah a different set of symptoms or symptoms I guess, and then a different type of prescription.

Al Cleinman: 05:38

You know, Kim, I think that analogy is very appropriate because Doctor Jones, you know, starts out with a license, come out of optometry school, I have a license. And but the reality is, using the words of of now I can’t think of his name, the great author, that until I have 10,000 hours or 10,000 patients, I really don’t know enough. And so, likewise with succession planning, Doctor Jones simply doesn’t have enough experience to even ask the right questions. And it’s how they get into trouble because their viewpoint is very often very, very narrow. What we bring to the party is lots and lots and lots of arrows in the back, a lot of experience doing transactions, you know, some pretty basic, some very, very complex tax strategies and transactions.

So we bring to the party a great deal of experience financially, legally, while on either accountants nor attorneys. We have a lot of experience in those areas Is from a business perspective. So we we know the questions to ask. We know what’s possible.

Megan McCarthy: 07:00

You know what the alternatives are. Sometimes that view is so narrow, the only deal you’ve done is a deal you got into when you started your business, or started your practice, or bought your practice, but never gotten out of it. So we know what are the alternatives, what are the options, and how do we get you there?

Kim Carson: 07:16

Okay. So if I am Doctor Jones for a minute, shout out Aqua. But if I am Doctor Jones, I, you know, have had my my practice for a number of years and I am looking to, to get out of the business I call you and and what is the first step I, I, I open my books. I tell you everything. You know.

Let’s say that all my agreements are in place. All of those are good. What happens next?

Al Cleinman: 07:48

Well, the first question I always ask or is or commented I make is, you know, Doctor Carson, I’m Santa Claus. I can give you anything you want. What is it that you want? And so often, practitioners don’t think. Humans don’t think in those terms.

Don’t think in terms of possibilities. And, you know, every day we’re dealing with that, we’re dealing with, you know, the optometrist that’s, you know, in Texas that really wants to be in Maine or, you know, wants wants to work a three day week when they’re working five or, or, or and so it’s it’s really important to get that out on the table understanding what’s what’s nirvana, what’s what’s perfection and and work from there. And again, I, you know, I hate to be a broken record, but I take so much of what what I do for our clients from my own life and living. You know, I have a fundamental philosophy. Life is a banquet of possibilities.

Seek and discover them. Feast upon them. And so I have lived my life. You know, it’s not perfect by any means. No one’s is.

But I’ve generally been successful getting out of this. This experience called life precisely what I wanted out of it. And I did that by thinking clearly ten and 20 and 30 years ahead and really documenting them, you know, great for writing things down and visualizing what it is that I wanted to do with my career. And, you know, my career is not, you know, maybe a little more entrepreneurial than most, but it’s not all that more, you know, different from Doctor Jones. Optometrist.

Kim Carson: 09:56

And so would you say. Well, sorry. I’ll back myself up here. I think it’s really nice that you say that they set the goals. If someone is calling you, it’s not.

Oh, we we think that you should do this and this and this. It’s. What do you want to do with this? What? What is the best possibility for you.

And then let’s see if we can make that happen. Let’s see if we can get there. I think also hearing you say, you know, you set your goals for ten, 20, 30 years out, is that something? And maybe Megan, I’ll ask you this, is that something people should be considering when they’re looking to exit their practice or just, you know, set set their hope for their practice for the future? Where would you recommend starting that point and how many years back is best?

Megan McCarthy: 10:45

Yeah, I mean, I’ll set it earlier, you know, don’t get into a business you don’t know how to get out of. So it’s never too early to have these conversations. It’s never too early to start planning because plans don’t always get fulfilled. They change. They take a left turn.

They they hit a road bump. You have to relook at what your exit plan is. And, you know, maybe your goals and your priorities in life have changed and what you want out of it has changed. Life happens, right? You know, when you’re when you’re really getting to the point of having serious discussions, we want to be talking to you, you know, 3 to 5 years out minimum, right?

There’s never it’s never too early. But, you know, I don’t like those phone calls that say, hey, it’s October. You know, one, I want to be out by the end of the year.

Al Cleinman: 11:32

That’s we can’t help you, to be honest.

Megan McCarthy: 11:35

We can’t. Yeah.

Kim Carson: 11:36

Yeah, that’s a little short.

Al Cleinman: 11:38

Yeah.

Megan McCarthy: 11:38

We’re here to really help you on that journey. Find the best possible solution to meet your goals and get out of the business. What you want to get out of the business and out of life. So minimum 3 to 5 years. We should really be digging in and having these conversations.

Al Cleinman: 11:54

One of one of the the key ingredients, I think in any practice transition is to first recognize that the sale of your business. First of all, if you bought your business 20 and 30 years ago, the sale of the business today is nothing like what you did 20 or 30 years ago. It’s far more complex. World number one. Number two, your your experiences are likely.

Well, I bought a piece of real estate or I bought my house or, you know, that was the biggest transaction you probably went through. And one of the one of the challenges is selling a practice or buying a practice, which is just the inverse of selling is far more complex than selling or buying a piece of real estate. Okay. The two are often. Well, you know.

Yeah, I bought my house. What’s the big deal? You know, we got a contract, yada yada. Well, it is a big deal because there’s all kinds of both federal and state and now Canadian implications on on how to go about it in, you know, there’s so much in the tax side of the House. You know, one of the things that we’re learning as we dig more into the Canadian world is that it’s in some respects, 180 degrees from what we do in the United States, in Canada, or I should say in the United States.

Generally speaking, an asset purchase as opposed to a stock purchase is the route that most people go. I want to buy hard assets. I don’t want to make. I don’t want to buy somebody stock in their entity. In Canada, the opposite is true, because there’s some Canadian tax laws that make it much more beneficial to do a stock sale or stock purchase.

So understanding all of those nuances, you know, you can’t sell, as an example, sell patient records in the United States without a document that puts the control and the and the responsibility for those records from you to the other party. It’s a whole different document. So there’s just a lot that goes into this that shouldn’t be underestimated. And that’s why time is so critical.

Kim Carson: 14:34

Yeah. Well, I think, I mean, maybe everyone look out for an episode on the differences between Canada and the States as you.

Al Cleinman: 14:42

You’re still learning those?

Kim Carson: 14:44

Yeah. Seriously. So my next question is there are, you know, slight differences in terminology for things. So succession planning versus, you know, a sale even could be different things. Would you please explain it to me?

Megan McCarthy: 15:05

Yeah. Succession plan is usually when there’s a known buyer in the practice. So whether it’s an associate doctor you already have working in the four walls, maybe it’s a family member, a son or daughter who’s, you know, coming out of optometry school and you know, it’s going to be a family succession. Usually it’s somebody that is already in the practice, knows the staff, knows the patients, knows the, you know, the equipment, the layout. Right. It’s a known factor.

And sometimes those succession plans take time. It’s not an immediate sale. It’s you know, hey, I have a young associate doctor or family member, you know, they’re just out of grad school or just out of optometry school. They’re not quite ready to own today, but I want to set it up so that they will in the future. So planning, you know, five, ten, 15 years out of what that succession plan, that journey is going to look like for both owner seller and associate buyer.

An outright sale or a divestiture, that’s usually somebody who’s outside of the practice, right? Somebody who’s not currently working in the practice and, you know, coming in to to purchase, whether it’s another individual doctor or a group, another optometry practice or even private equity groups coming in.

Kim Carson: 16:21

Okay, great. Thank you. Thank you.

Al Cleinman: 16:25

I want to go back to two things. Number one, along the same lines that Megan is saying, we have, you know, I can bring many a story, but I go back a long time ago. This is probably now 25 years. And we had a client who called us and said, well, I have an associate and he’s a 20% Shareholder. I gave him 20% of the practice ten years ago, and now it’s time I want to retire.

And so it’s time for this, this associate to buy the balance of equity. And make a long story short, this individual didn’t want to own it. And so the deal fell apart. My client had to buy back the 20% that he’d given to the associate. And the lesson there is that when you’re looking at a succession plan, you’re hiring an associate, but you’re really not.

You’re hiring a buyer. And there’s there’s very different characteristics and you want to be looking for. And in this particular case, my client was a very strong individual, very strong personality. He was not about to have a hire a an equal partner, if you will. But that was the downfall.

I mean, the good news is we ultimately sold the practice and it went on to be very successful. But going back to the time issue, why should I start 510 years sooner? And that is you have to have time to make mistakes. In my own particular case, I sold Cleinman Performance Partners as of the first of the year to marketing for to POD Marketing. And I had gone through about three different transactions over the past five years that weren’t consummated.

And because I started so early, I really started in my, my mid 50s really looking at this. And I woke up at age 69, having successfully transacted transitioned my business. It took it took a lot of a lot of learning. And I’m a transaction guy.

Al Cleinman: 18:40

So. You know, it’s not for the meek. It’s you. Really, I don’t in so many respects. I would say I don’t care who you use, but this is not something you should go on your own. Okay.

Megan McCarthy: 18:54

It’s got many, many clients that we’ve worked with who? You know, the first vision is my associate. My associate is going to be my successor. And, you know, half the time, that’s not how it ends up. Associate doesn’t really get what ownership is.

They just think more money. But don’t want the responsibility or the accountability of ownership. A lot of times those fall through. So you need time on your side to be able to go through the process. Right.

Go through the journey and, you know, ultimately have your successful exit. But it might not start where you think it will.

Kim Carson: 19:27

Yeah. Or even, you know, at the very least, like if if the associate is not going to fall through time for them to grow into the idea of it or, or almost like a, like a testing period, like, can you be the owner? Can you grow into this? And you can’t do that if you call somebody on October 1st and want it done by December 31st.

Al Cleinman: 19:46

And there’s another piece of this. And that is with succession planning, with long term exits. There are some tremendous tax opportunities that the longer the runway, the better the opportunity from a tax leverage perspective. So again, it’s it’s something that especially when we’re dealing with with senior doc to junior doc so to speak, associate transitioning. The longer that runway we’d like 1015 years the better.

And there there’s lots of opportunity, especially for the buyer on the tax leverage side, when we have that kind of runway.

Kim Carson: 20:29

I’d like to ask a question that might be possibly taboo. I think that being Canadian, I’ve heard that this can be a sort of taboo subject and that is the subject of money. So, you know, if I, if I do everything right and.

Al Cleinman: 20:47

Not taboo in our world.

Kim Carson: 20:49

Yeah. Oh, right. I’m sitting with like financial analysis or analytical people here. If I do everything right, if I call 15 years ahead of time and I’m like, you know, one day I would like to leave this business, am I paying you the whole time? Like, is there an incentive for me to call, you know, besides getting a better deal in the end?

But is it going to cost me quite a bit of money in the mean and in between time?

Al Cleinman: 21:18

If your question is in regards to, you know, the cost of support, so to speak, my direct answer is absolutely not. And I can give you numbers of stories about that. And, you know, one is a client who called us. I want to go back. This is probably 2016 as a multi-location practice in the state of Texas.

This and they called and and one of the things that we look at when we look at a potential seller is what can be done in the short term to improve the value of the business. And in this particular case, they had an incentive plan for their team that I didn’t think was very effective. We we basically said we’ll we’re going to change that incentive plan. It took a year to do that. But in that year, that practice grew by over $1 million, and we were able to get multiples of that million more for the sale of the practice.

So, so generally speaking, the longer we go, the the more valuable we can make that asset. In another scenario that I’ll share is a practice in the Midwest, where the client had been with us as part of Cleinman Performance Network and asked us to look at their business. They had brought in associate a few years before. And to make a long story short, the the the senior doc had, you know, offered up the practice to the associate. They’d had it appraised and the associate it had been appraised at, let’s call it $900,000 by an outside appraiser.

They the associate wanted to buy the business sooner than the senior doc wanted to sell it. And so we looked at the deal. And, you know, we we basically looked at what he was going to give up in earnings and tried to do a deal at 1.4 million, which was fair for the practice, given the fact that my client was going to give up those those earnings associate said, no, no, you know, the value of the practice is 900,000. And it made a long story short, that deal fell apart because of that. And I ended up within the next year getting 2.1 million for this practice.

So the story here is that negotiations start at hello. And you have to be very, very careful when you’re talking with that, trying to recruit that associate that you don’t set something up and expectation that is not going to end up being reality. And so, you know, one one maxim I have is keep your mouth shut. Negotiations started. Hello.

Make sure you’re working with good data before you start throwing out expectations.

Kim Carson: 24:20

I think that’s a great another just piece of the expertise that that you both have is that you look at a deal in that way. You know, it’s it’s not just selling well a practice early. It’s well, I was going to work for three more years and I would have had a salary for those three years. So where’s that income now? It’s it’s not in just the $900,000 valuation.

Al Cleinman: 24:41

Yeah. Yeah. It’s it’s you got to look at the whole picture.

Megan McCarthy: 24:45

And it goes beyond that too. There’s employment for the seller post sale. Right. Is the seller going to stay on working and seeing patients for a number of years. What does that look like?

If they own the building they’re now going to be a landlord, which is the real estate terms look like what does the lease look like? So there’s all sorts of other factors that go into it, into the big picture of a deal versus just selling the practice.

Kim Carson: 25:09

Amazing. Well, is there anything you know I can’t know what I don’t know. Is there any questions that I haven’t asked that that you think would be very valuable in people hearing if, if this is their first introduction to to transitions?

Al Cleinman: 25:26

Yeah. I think, you know, again, I go back to the optometry analogy and that is there’s not an optometrist in the land in the world. That would say a if you’ve seen one patient, you’ve seen them all. Well, our situation is exactly the same. And I have a saying, if you’ve seen one deal, you’ve seen one deal. They’re all different.

Every patient is different. The process of getting there from the process of delivering to that patient their appropriate prescription or recommendation is probably the same. Every patient same process, very different outcome. So we call this a a systematized process for a custom outcome. And what makes that custom outcome work is the experience of Doctor Jones.

He saw 10,000 patients. Therefore he knows when he sees whatever he’s seeing or she’s seeing that this may be the potential outcome. And likewise, we have the same thing. Red flags happen all over the place. And I get, you know, there isn’t a week that doesn’t go by that we don’t have a call from a prospective client who is sharing with them where they are in there with us, where they are in their journey, where we’re saying, oh, wait a minute, that’s a that’s a red flag.

That’s a concern because we have the experience to know it.

Kim Carson: 27:00

Amazing. And and Megan, is there anything that you think needs to be said?

Megan McCarthy: 27:05

Yeah. I mean, you know, don’t go it alone, right? You just don’t have the experience and the number of deals and the number of transactions to really know what questions to ask, what the red flags are, what’s going to work every all the detail that goes into it. And, you know, whether it’s us or somebody else, you know, you need to have some experience on your side. You know, likely the sale of your practice is the most expensive asset you own, and it’s probably a huge piece of your retirement portfolio.

You don’t want to risk that, right? You want to make sure you do it right?

Kim Carson: 27:39

Yeah, absolutely. Well, thank you both so much for joining me today on the Cleinman Connect Podcast. That is our show. If you would like to hear more, you can at cleinman.com and wherever you like to listen. Thank you both for joining me today.

Megan McCarthy: 27:56

Thanks for having us. Yeah.

Al Cleinman: 27:57

Don’t hesitate to call us. You know, and those of you in optometry land, we’re happy to invest, you know, 20 to 30 minutes with anybody and explore your journey.

Outro: 28:08

Amazing. Thank you. Thank you for listening. At Cleinman, we take pride in helping our partners unlock their full potential. Subscribe to get the newest episodes or visit us anytime at cleinman.com.