Industry Q&A with Randy Krivo – Optometry and Dental Practices

Q: What is your expertise on this industry?

A: Prior to becoming a licensed business broker, I was the Chief Sales and Marketing Officer for a firm in

the Optometry industry. At Sunbelt, I specialize in healthcare related businesses and have successfully

represented and sold a large number Optometry and Dental practices in Minnesota and Western

Wisconsin. Over the years, I have developed a wide network of experts in both industries. I have

published numerous articles related to practice sales, most recently in the Minnesota Optometric

Association’s newsletter. I am recognized as an Industry Expert by Business Reference Guide, the

leading publication in the business brokerage industry.

 

Q: How does financing look in the industry?

A: Bank financing for 100% of the acquisition price is typically available for qualified practice buyers

(provided they are doctors in the industry, have been out of school for more than 2 years, and have a

good credit history). Seller financing is also available on many transactions in which the buyer is able to

provide a down payment of at least 1 times annual cash flow of the practice.

 

Q: What types of buyers have you seen making transactions in Optometry and Dental Practices?

A: Both corporate buyers looking to expand their footprint in the marketplace and associate doctors

looking to purchase their first practice.

 

Q. How are practices valued?

A: There are many methods employed in valuing Optometry and Dental practices, such as % of Net

Collections. I prefer methods that focus on cash flow and profits, as those are a much better indicator of

the health of the practice and whether or not the transaction will make financial sense to the buyer.

 

Q: How complicated is a sale in this industry?

A: It’s not very complicated, since they are so commonplace. The most complicated part of the deal

typically involves insurances and credentialing. So the buyer and seller need to set aside an adequate

amount of time in the transaction process to account for this.

 

Q: What is the typical length from listing to sale?

A: Average transaction times in the Twin Cities metro area take between three and nine months.

Outstate locations usually take a year or more.

 

Q: What industry trends are currently evolving?

A: Both industries are experiencing a certain level of consolidation from corporate buyers. But,

independent practices remain a strong segment of the industry. Concerns over the Affordable Care Act

are present, but not to the level that exists in other types of medical practices.

 

Q: Are there any regulatory issues out there?

A: As mentioned above, there will always be concerns over the Affordable Care Act. But, that has not

dampened buyer interest in Optometry and Dental practices.

 

Q: Do you believe the industry is consolidating?

A: Yes, the industry is consolidating s bit, but not at an alarming rate.

 

About the Interviewee – Randy Krivo

rkrivo@sunbeltmidwest.com

 

Randy has over 35 years of experience in Business Ownership, Business Management, Sales and

Marketing Management, and Business Consulting. He brings unique insight to buying and selling a

business, as he is a former business owner of several small to mid-market sized privately held

companies. As a Sunbelt Business Broker, he is driven by a desire to help people reap the rewards of

business ownership.

 

After a successful sales and marketing career with Fortune 500 companies, Randy pursued his dream of

becoming an entrepreneur. Over the course of 20 years, he founded or purchased four different

companies. This background has provided Randy with a personal understanding of not only the

complexities of managing and growing a business, but how to deal with the nuances and emotional

challenges of buying or selling a business.

 

At Sunbelt, Randy consistently ranks at or near the top in terms of number of listings, dollar volume of

businesses sold, and buyer assistance. In recognition of his accomplishments, he received the 2015

Sunbelt Torch Award which is presented to the broker who, through their actions and performance,

fuels the entrepreneurial fire in buyers and sellers alike.

 

Randy has a Bachelor of Science, Business Administration degree (cum laude) from the Ohio State

University and a MBA degree from California State University, Los Angeles. He’s a Licensed Business

Broker in the states of Minnesota and Wisconsin.