Podcast Ep 106 Transcript: Tessa Sokol Sublease to Private Practice

[00:00:04] Introduction

[00:00:04] Evon: Hey, everybody. Welcome back to The Optometry Money Podcast where we’re helping ODs all over the country make better and better decisions around their money, their careers, and their practices. I am your host, Evon Mendrin, Certified Financial Planner(TM) practitioner, and owner of Optometry Wealth Advisors, an independent financial planning firm, just for optometrists nationwide. And thank you so much for listening.

[00:00:28] And on today’s episode, I am joined by Dr. Tessa Sokol, owner of Sokol Advanced Eyecare in Wisconsin, and we dive into lessons learned from her experience, transitioning from a longstanding LensCrafter sublease into her own independent, private practice. And we talk about the benefits and drawbacks of her experience in a corporate sublease, how to evaluate different sublease opportunities, why she ended up going into independent practice ownership and all the lessons learned throughout that whole transition. And she brings a ton of wisdom to the conversation.

[00:01:07] So, whether you are looking at sublease opportunities, whether you’re planning on entering private practice ownership. She brings a lot to learn from. And if you have any questions or ideas for future episodes, reach out at podcast@optometrywealth.Com. And you can find all of the links and resources we mentioned in the show notes, which is at the education hub on my website www.optometrywealth.Com, along with all the other episodes and resources we put together. And while you’re there, you can schedule a free introductory call and we can talk about whatever’s on your mind financially and how we help optometrists all over the country master their cashflow, plan proactively around taxes, invest wisely and so much more. And without further ado here is my conversation with Dr. Tessa Sokol.

[00:01:59] Start of Interview

[00:01:59] Evon: Welcome back to the Optometry Monday Podcast. I’m your host, Evon Mendrin. And I’m really excited to have onto the podcast today a Dr. Tessa Sokol owner of Sokol Advanced Eye Care.

[00:02:10] Dr. Sokol, thanks so much for coming on.

[00:02:13] Tessa: Yeah. Thank you. I appreciate you having me on here.

[00:02:15] Evon: Yeah, you and I had connected online after seeing your story about transitioning from a LensCrafters sublease over to your own independent private practice, and I was really excited to have you on to just learn from all of your experience around it. your work in the, in the corporate sublease, your experience transitioning over to private practice, all the lessons you’ve learned from all of your hard work and experience.

[00:02:42] So I’m really excited to have you on. Before we dive into all of that fun stuff, I did want to learn a little bit about your background. Tell us just a little bit about your, your background. How did you get into optometry? Where did you go to school? What was your first, work experience like after school?

[00:02:59] Tell us a little bit about your background.

[00:03:01] Tessa: Yeah. I gladly will. So, I am born and raised in Wisconsin, and I can tell you that I knew I wanted to become an optometrist since high school. I had a teacher who gave us an old DOS program, which I’m aging myself by telling you that, but it was a DOS program that we would put in our likes and dislikes.

[00:03:19] It would throw out a ton of different professions, and we just had to pick one in shadow. somebody to see if we’d find interest in it. I chose optometry and shadowed a local optometrist who was doing an exam on a low functioning cerebral palsy patient. It was, I believe, a 10 or 12 year old child who was in a wheelchair and couldn’t do much, but, but use his eyes to watch TV and learn and things like that.

[00:03:43] And she was able to make such a huge difference in this young patient’s life that I’m like, I need to do that. I need to help people. I need to help people perform better and see better. And it kind of clicked right from, you know, when I was 16 or 17 year old, that this is what I wanted to do. and then I went into optics.

[00:04:01] Right away, getting a job as an optician before I went to optometry school at ICO in Illinois. I

[00:04:08] Evon: Very cool. And so you, you, you got into the profession because of your own firsthand firsthand experience seeing the impact of optometry on patients. It’s fascinating. And, where did you go from there outside of optometry school? Once you graduated, what was it like getting into that first work opportunity as an OD?

[00:04:26] Tessa: I was very thankful to actually get a job in Northern Georgia, where I worked alongside an optometrist who owned a private practice. And I did also have another very well known optometrist down there who, hired me as almost like a consultant, even though I didn’t have any experience in buying frames for his new optical.

[00:04:44] I really think he just didn’t have time to do it and wanted somebody to be able to, to buy new frames, but I was able to get a really in depth experience into buying frames, pricing frames, and running an optical, just being thrown into it right after I graduated. It was an amazing experience, even though at that time I didn’t know anything.

[00:05:05] Evon: You learned trial by fire, right? You learned on the job as you went through it. and then from there, we, we talked about initially your experience in a LensCrafter sublease. you could have taken your career a lot of different directions. You could have been an associate in private practice or elsewhere.

[00:05:21] Benefits and Drawbacks of a Corporate Sublease

[00:05:21] Evon: You could have gone into your starting your own cold start or whatever it may have been, but you took a direction of heading into LensCrafters, and as the owner of the sublease, what took you that direction? Why, why did you end up going that direction in your career? Hmm,

[00:05:36] Tessa: So I had a bit of a life change and I wanted to move back closer to family, which meant moving back to Wisconsin. And, at that time it was a urgent change to my life that I wanted to find a job really quickly. I was a little insecure and not having a job right from the get go. And I took a couple of corporate employed jobs at that time, just very briefly.

[00:05:59] Wisconsin’s not a two door state, so optometrists can be employed by corporations here. But very quickly. One of the vice presidents of LensCrafters at that time really noticed that I was involved. I would speak up. I wasn’t afraid to jump in and say what I thought when I was working as one of their corporate optometrists at one of their locations.

[00:06:23] So he really took me under his wing and offered me this amazing opportunity to take a well established corporate or a LensCrafters sublease on Madison’s West Side. And It was one of those points in my life where I felt like it was meant to be. I was still in my twenties at that time. And I did have the assistance of a couple of the VPs and the regional managers who really believed in me, even when I don’t necessarily believe in myself and it allowed me to have the confidence to dive in and start a practice and learning how to run a business and own employee or work with employees, it just.

[00:07:06] It was the affiliation with LensCrafters at that time created a scenario where I wasn’t allowed to fail. You know, it’s, it gave me a situation where they would assist me with the business setup and they would assist me with making sure that I have enough employees. And that transition was pretty smooth from being an associate to a business owner, where I didn’t necessarily have to jump in and have The optical, I’d be running just the examinations and selling contacts, but I had that corporate assistance that if there was anything I was struggling with, there would be, they would be there to make sure I didn’t fail.

[00:07:45] Evon: Interesting. So you, you benefited from their, their processes of getting this business up and running, their mentorship perhaps, their, their ability to sort of coach through, coach you and help you through that whole process and give you any information and resources that you needed to, to get up and running on a strong start.

[00:08:02] And, you know, from the way you describe it, you had the initiative, right? You are someone that was, that took initiative and, and really wanted to drive this thing forward. Just from hearing you describe it, it seems like that’s certainly the case. And I feel like I hear that a lot when someone is considering going into, a sublease opportunity.

[00:08:19] They, they want to learn about a lot of the business aspects of optometry. without having to feel overwhelmed and deal yet with the optical side of the business and they, you know, the, the optometrists I hear about wanting to get into that kind of opportunity. They want to learn about the, the business aspects.

[00:08:35] They want to learn from a lot of these corporations, their tools, their resources, their mentorship or coaching. They want to use those resources as best as they can, as they grow into that next stage in their career. And it sounds like you, you saw, you saw the same thing, right?

[00:08:51] Would that be correct?

[00:08:52] Tessa: That’s extremely accurate. At the time too, when I was becoming affiliated with them, they had specific programs in place to develop you, Emotionally, meaning how can you be a leader? How can you lead others, but then also helping you with the business part of it as well. So at that point they had kind of a two tier pronged approach and making sure they built us up in being leaders, but then also business owners and.

[00:09:19] It happened exactly at the right time in my life where I needed that assistance. Going from optometry school, you learn everything about the eyes and the health of the eyes. And, and you maybe take an elective business course or an elective finance course in order to learn how to manage those, that debt from your student loans, but you really don’t have any business ownership and it is a steep learning curve.

[00:09:43] learning how to run a business, how to pay taxes, and, but they allowed you to have the resources available to help you get there. And that was exactly what I needed at the time.

[00:09:55] Evon: Tell us a little bit more about the experience. how much control did you have over creating the patient experience? Did you have your own staff? Just tell us a little bit more about the experience there.

[00:10:06] Tessa: I was with LensCrafters for 12 years, I believe. It is a very high volume location. So unlike some other Contractor’s lease is where the overhead isn’t as high in a lens crafter sub lease. It is. I had two part time associate optometrists as well as seven support staff. I would have quite a few opticians working at the same time and double doctor coverage.

[00:10:31] The overhead with rent and. selling contact lenses, having contact lenses that you are stocking in your office. The overhead is significantly higher at a LensCrafters. so it was really busy, but we did get a, quite a bit of experience when it came to running the eye doctor aspect of it. I was able to bring in additional equipment, Like retinal imaging and an OCT, and they really left me alone.

[00:11:01] As long as I was performing well, they really didn’t get into my business. And I felt like that I could run the office, like almost like my own private practice, but within a corporate entity with the added benefit that I was, you know, piggybacking on their multi million dollar advertising budget that would get people in the door.

[00:11:21] I did feel like I could operate if I wanted to on a medical level. And, I felt really comfortable being there that I was able to get to the point that I wanted, where I was treating people the way that I wanted to be treated without them telling me I need to see five patients an hour. I could see a comfortable number of people an hour and treat them the way that I want to be treated.

[00:11:42] It was a good relationship.

[00:11:44] Evon: That’s, that’s awesome. And I feel like some of the hesitations around that opportunity is, you know, many optometrists don’t want to get stuck in what they might call like a refraction mill where they have no control over the experience. It’s not as fulfilling professionally, but it does sound like you had a great relationship with the corporation.

[00:12:01] You, you were able to have a lot of flexibility to create that scope of care and patient experience that you wanted. And, from seeing some of your other. Interviews, your, your first initial investments were, let’s see. We added, in Optos, Daytona, I believe, and OCT, you know, you, you’re adding on this equipment to what it seems like add medical eye care to, to the experience there.

[00:12:24] What gave you that confidence to make those large investments into your, your business as you were getting up and running?

[00:12:31] Tessa: Well, like I said, at the beginning, I really got into eye care because I wanted to treat people the way that I wanted to treat them. I really. Patients are first. I really am just there to help people. When you go through four years of medical optometry school and you have such a high level that you want to care for people, it’s really hard to practice.

[00:12:50] Below that, there is the fear when you’re affiliated with a corporation that you might just be a refraction mill and, and you have to pump them out. But I refuse, I refuse to be that person that is just going to be pushing out refrac, prescriptions and, and making them be five minute exams. And again, they, they trusted my ability to run the business and they let me do it.

[00:13:14] So I just kind of kept going with the things that I thought would help my patients once we were financially stable to do so, and again, turned it into the location that I wanted it to be. I do have to add, though, that this experience is mine. I’ve noticed that there are other Sub lease owners that may not have this experience.

[00:13:33] There are, it really depends on the regional management. And there are some that are like, why are you not giving us more prescriptions? Because the affiliated corporation is trying to sell glasses.

[00:13:45] Evon: Yeah.

[00:13:46] Tessa: They support medical optometry, but the bottom line is no matter what people say, they want to sell glasses and They will support you, but if you’re not giving them prescriptions, if patients are walking without prescriptions, they are going to come up to you and say, What’s going on here?

[00:14:03] Why are the numbers down? We need to sell more glasses. I don’t want to ignore that part of it, but they were happy with my results.

[00:14:09] Evon: yeah, it definitely does seem that there are. There can be pretty big differences, not only between corporate brands, you know, Walmart, LensCrafters, you know, whatever it may be, but also within regions within, within LensCrafters or within Walmart, you know, region by region, location by location can be very different one from another, which I guess is part of what makes it hard in evaluating these opportunities, right?

[00:14:33] Because every opportunity may be different from other experiences from other optometrists. Did you take over from another doctor? Was it a long standing location?

[00:14:44] Tessa: It was a long standing location, and I can tell you that the transfer into taking over that business was not smooth at all. The previous owner had multiple locations, and they had chosen to not renew his lease. He was not leaving on his own accord. and that is always something that is hanging above you as well.

[00:15:05] That when you have a lease with a corporation and you’re technically in their spot, if you know, it’s not a happy relationship, will they cut ties? Then you’ll be completely out of a location for a business. again, my affiliation with them was good. It was positive. So I never had fears of that, but the previous owner didn’t want to leave.

[00:15:25] He had owned the location for over 20 years and, they just felt they needed new blood there and, did not renew his lease.

[00:15:33] Evon: interesting. Yeah, I guess that’s a part of that lack of control, right? were you able to, some of the, the advice I see around reviewing these opportunities is to talk with the former doctor about the location and kind of learn from their experience. Was that something you were able to do? was that a part of why the transition wasn’t as smooth as it could have been?

[00:15:57] tell us about that.

[00:15:59] Tessa: Yeah, that’s a great point to bring up because he did offer quite a bit of information to me, but on kind of a basic level, because even though there wasn’t contention between him and I, there was still a little bit of bad blood in the fact that he didn’t want to leave. I really was walking into it and purchasing it from him with very little knowledge of how it should be run.

[00:16:21] again, he offered me a little bit, but most of it I had to figure out on my own.

[00:16:25] Evon: yeah. That makes sense. That makes perfect sense. Given the, the situation there, knowing that every opportunity is different, what advice would you give to someone who is evaluating a sublease opportunity? What should they look out for? What should, what should they look for? What are some red flags? What are some positives?

[00:16:44] Just kind of generally speaking, what, what advice would you give to someone looking at an opportunity like that?

[00:16:49] Tessa: The biggest thing to look at, I think, is overhead. I’ve realized most corporate sub leases, there’s a significant variant in the operation of the business. There may be one where you’re simply paying a really low amount of rent. And you don’t really have support staff. You’re seeing the patients on your own.

[00:17:09] You may not be bringing in as much income, but the overhead is significantly lower that once you pay the rent, the rest of the money is in your pocket.

[00:17:17] Evon: Hmm.

[00:17:17] Tessa: Whereas mine on the other hand, on the other side of the coin was very busy. So I was operating, you know, two associates, several support staff, the overhead of the equipment and the stocked contact lenses.

[00:17:33] And the gross sales were significantly higher, but then of course the margins were quite a bit smaller because of the operations of the business. If you’re able to have The books of the previous owner or get a good idea from the regionals of what the cash flow is expected to be. That’s the number that you really want to be looking at is the, the gross sales, but then also the overhead as well as the cash flow.

[00:17:58] What Led to Leaving the Sublease for Private Practicec

[00:17:58] Evon: Got it. Got it. Very interesting. Very interesting. Well, let’s talk a little bit about the transition now. it sounds like you had a great relationship with LensCrafters. What eventually led you to want to take off and want to transition over to your own independent private practice?

[00:18:12] Tessa: You know, I laugh at myself because I think that I have a problem where I have a paycheck. Hard time sitting still, I always want to be, striving to be better and patients that got to know me really well over those 10 years even said to me that they felt like I was this person combined, like confined into a room.

[00:18:34] With these walls unable to be let out because I’m just bouncing and hitting the wall and not really going anywhere. I made my corporate sublease fantastic. I really appreciated the patience and the way that I was caring for them, but it really topped off. I really didn’t really have anywhere to go from there, even though my aspirations were to be a lot bigger. I really wanted to develop equity in my practice as well. unfortunately, it’s very challenging these days to sell a corporate sublease for a profit. The loyalty is in the doctor and you do get a little bit of goodwill with the charts, but it’s very challenging to gain any equity in a practice when you’re affiliated with a corporation because a lot of the patient loyalty is to the corporation.

[00:19:22] And not necessarily the doctor because the corporation’s name is on the facade. So those were two of the biggest things. One, it was really limiting. I felt like I wasn’t able to be, I wasn’t able to thrive and flourish and open up into bigger and better things. I topped out as the, the amount of gross sales and the amount of volume that we could handle, but then also I really wanted to develop some equity in my practice to have it be something I can pass along to hopefully another optometrist when I’m ready to retire.

[00:19:53] Evon: Yeah, that makes a lot of sense. You, you felt like you were hitting your boundaries and you are ready, we’re ready for that next step to sort of, unleash yourself to whatever opportunities in front of you and to take full control over the outcomes and decision making. And from a financial standpoint, that’s really interesting.

[00:20:10] because like you mentioned in a private practice, you are able to quite literally reinvest into building the equity and value of an asset that you own. with a corporate sublease, you have to do from, I’m thinking from a financial planning perspective, you really do need to do, you need to be much more intentional about using your cashflow to reinvest into other forms of equity, right?

[00:20:30] Because like you said, you’re not necessarily able to build equity in your own business, your own asset in that same way that you would with a private practice. So it’s really interesting to think about. And.

[00:20:41] What Were the Steps of the Transition?

[00:20:41] Evon: What was that process like just in terms of the steps you had to take to, to move, move on from LensCrafters to start to build out the location to doors open?

[00:20:54] Just kind of walk us through what that whole process was like. Yeah,

[00:20:58] Tessa: Yeah and I can tell you that mine was an interesting one. So it was well worth it at the end, but I did have a lot of hurdles, but I would have not changed a thing. I’ll try to make my story short, but I started looking for new locations in, I believe, October of 2019, five months before the entire world shut down.

[00:21:21] Very, very emotional time in the country. And I had settled on this location that I thought I was going to, sign with. I had a letter of intent with the owner of the building. I did not sign the lease yet. We hadn’t fully negotiated that, but I had spent tens of thousands of dollars with a white glove design build company out of Chicago that had already, built out the space.

[00:21:50] We were working on the details of the trim. We were that far into designing it and then COVID hit. And again, things were very emotional at that time. I had closed my private, my, corporate sublease. We closed the doors for over a month and the uncertainty of my finances and financially supporting my, my employees and what is going to happen really made me want to pivot. I had conversations with the management of this location, and they were complaining and negotiating over $3,000. And I said, if I’m going to sign a 10 year lease with you, that ultimately is going to be over a million dollar deal. I don’t think we should be arguing over $3,000. And Felt like that, if, if this is how it’s going to be now in negotiating the lease, I do not want to deal with you over the next 10 years.

[00:22:45] And, I, I fully believe in working with good people. I just want to work with good people, do, do business with me. And, and, I didn’t want to have the animosity with this management company that just was giving me. a hard time when I should have been a good tenant of theirs. So I made a huge pivot in April of 2020.

[00:23:07] I stepped away from the design build company in Chicago after I had given them a $12,000 deposit. I, went back to my real estate agent and I said, I want to start looking for new locations again. And I realized at that point that I wanted to do more of a budget build for a lack of a better word, because the walls don’t pay the bills.

[00:23:31] You know, the, the seeing the patients pay the bills, the equipment pays the bills, but the beauty of the walls do not pay the bills. And I decided to hire iCare Advisors. one of my good friends runs that, or I know both of them pretty well. And they really assist with younger people doing startups and doing budget builds, and they were the key thing in getting all the ties that I needed in order to streamline it and have it be very low expense.

[00:24:03] I think that pivot that I made in 2020 easily saved me a $250,000.

[00:24:09] Evon: Wow. Is that Dr. Steinmetz and Dr. Baas?

[00:24:13] Tessa: Yes.

[00:24:15] Evon: Yeah. I’ll throw a link to their information in the show notes. I’ve heard nothing but great things about them. So it’s good to hear your experience there. And interesting. I like what you say there. You believe in doing business with Good people. And, like if you’re going to be in a long term relationship, you know, over 10 years with someone, right?

[00:24:33] You probably don’t want to be squabbling about a dollar amount like that. cause what will come in the next 10 years when you’re locked into that relationship.

[00:24:41] What Are Non-Negotiables for Practice Location?

[00:24:41] Evon: And. What should someone look for in terms of this like minimal viable product of a location? Just starting out, like what are some things that are non negotiable and what are some things that you can do without and plan on adding later?

[00:24:57] Tessa: The biggest thing that I’ve heard from colleagues, was space. That often people save on space because you want to save on the square footage, creating a lower rent. Or, obviously, if you’re purchasing the building, it’s not going to be as big of an expense. I listened to that advice, and I’m really happy I did, and I went with a little bit of a larger location.

[00:25:20] So, to me, that was a non negotiable. I spent a little bit more money in not necessarily the aesthetics, but more so the space. I have the ability to have four exam lanes currently, we’re only operating two, but I know that I can expand into that in the future. I was able to bring my Optos and OCT with me and just build out standard lanes. So right now I, I equipped it as it being a standard optometry office and then within the first 12 months already brought in more advanced equipment.

[00:25:55] Evon: Yeah, interesting, and space is not necessarily something you can easily add on, right? Unless you’re, you you’re building your own location, you’re building your own building. You can, you potentially add on later, but I mean, space is not something you can easily just add on. Aesthetics, the look, design, those are all things you can change as, as you go.

[00:26:16] That’s, I guess that’s a good point. You’re balancing out this. short term need to get the business up and running and growing versus your long term vision. And a big part of that was making sure you had enough space to grow into where you felt like your business was going. how long did it take for you to, find the location, get it built out, and then be available for doors open?

[00:26:42] Tessa: It was April of 2020 when I pivoted and I moved and started looking to new locations and then I almost purchased a building that had undisclosed issues. And walked away from that. I was a week out of closing on that building and owning my own building. I closed that, or I walked away a week before closing in October of 2020.

[00:27:15] So then I decided to take a vacation and take a break because I was exhausted from these two locations. I decided to take a vacation and take a break. And then it was, April of 2021 that I started looking again.so there was a little bit of a pause in there. I started looking again. I contacted my real estate agent and said, let’s start looking at locations again.

[00:27:38] And, we finally settled on this place in August of 2021 is when I signed the lease on my current location.

[00:27:46] Evon: Hmm.

[00:27:47] Tessa: I opened in April of 2022. So I can tell you that, the timeline before opening was about six months.

[00:27:57] How to Prepare Financially and Mentally for the Transition

[00:27:57] Evon: You mentioned the, the transition and the financial uncertainty really that came from leaving LensCrafters, obviously COVID happened and there’s no way anyone can really prepare for that kind of worst case scenario. I mean, rarely are we, are we thinking that that sort of thing, that event is going to happen, but there’s always going to be some amount of uncertainty financially and otherwise.

[00:28:20] When you’re moving a team, when you’re moving your business from one, one type of practice from one mode of practice over to something new, how do you prepare yourself for that mentally, financially? I mean, just how do you, how do you prepare for that move so that, you can at least be as prepared as you can for all of the known things that can happen, let alone all of the totally uncertain things on the scale of COVID.

[00:28:49] Tessa: I can say I was a little bit conservative knowing that years before I started looking, I knew at some point I would want to relocate out of my corporate sublease. I had put quite a bit of money away. expecting there to be hiccups and expenses that I wasn’t expecting. I think I was lucky that way. I had a, I definitely had a financial cushion.

[00:29:11] I also was able to develop a relationship with a bank that was very supportive in the opening it. but if you want to talk about the emotional aspects of it, that’s quite interesting because I think that’s one of the biggest barriers is that it is a big financial undertaking to open a private practice.

[00:29:29] And. What if something happens? What if I fail? I am a little strange that way. And that I realize if I absolutely tank it and completely fail and worst case scenario is I am homeless, I’m fairly certain some people in my family will take me in and will give me a place to sleep and, and some food. So I don’t let that, I don’t allow that to, that fear to slip.

[00:29:56] Stop me again, I might be a little bit weird that way. but, but all joking aside, I optometry is a very financially stable profession. I, the success rate of an optometrist. Paying back their loans and staying in business over two years is very high. I don’t know the data, but I’m certain it’s over 90%.

[00:30:20] There’s, it’s very hard to fail in eyecare with the demand that’s out there. And as long as you’re willing to take the leap, there’s a team of, of financial advisors and bankers and real estate agents that will help you get through it and you’ll figure it out.

[00:30:36] Evon: I appreciate you saying that. And, I feel the same way about practice owners in general, from a financial standpoint. And especially when you’re going into an ownership opportunity or preparing for one, the best way to prepare for uncertainty is to have liquidity, have savings, have cash available in your life to weather sort of the ups and downs.

[00:30:56] In this case, it’s, it’s most certainly going to be down in cashflow and to allow you to get through that and get through the other side. I’m a huge fan of especially practice owners or getting into practice ownership, having as much cashflow, flexibility and liquidity and savings available as he can, not only from a financial standpoint, to get through all of that financial uncertainty, but just from a stress level perspective, I feel like nothing helps bring down or at least manage stress levels when going through something like that, than having a healthy size of liquidity in your life.

[00:31:31] something you can turn to. So I really appreciate you sharing that. And I also appreciate you talking about the team around you because It can be daunting to have to make all these decisions, in terms of location, in terms of, equipment, in terms of inventory, in terms of build out and everything that you have to go through that you didn’t necessarily have to do either as an associate or even as the, the owner of this, sublease. And there, you don’t have to do it yourself. I mean, there are like, like iCareAdvisors is a great example of this and the rest of the team that they, or you can build around you to help you make all these different decisions. There’s a team that can help walk you through all of these decisions.

[00:32:13] And. You know, in a huge life event and a huge career decision like this, I think it makes all the sense in the world to work with qualified professionals in all these different areas and aspects of the business to, to increase your odds of success as much as possible. I also appreciate you saying the, talking about the odds of success in optometry and that there is a reason that banks will lend you 100 percent financing for cold start, up to certain points for practice purchases. even without really much business experience. And that’s because the, the odds of a practice being successful are pretty high. I mean, their, their risk from the bank standpoint is pretty low for, for these types of loans. So, there’s a reason for that. I appreciate you highlighting that because there is fear around any new business opportunity.

[00:33:04] There’s fear around any big career uncertainty like that. but the odds of success in optometry are high. And when you take it to that worst case scenario, like you did, I personally went through that with my own business. You know, I cold started my own business from a financial planning sense. So I had to think about those worst case opportunities or worst case scenarios too.

[00:33:24] But in optometry, I do feel like. It would be relatively easy to find an associate opportunity somewhere. Even in the worst case scenario, if you had to go get just a job in order to cover expenses, like, would you agree? Would that be the case from your experience? Like, even if it didn’t work out, sure, you’re a little bit behind financially, but you, you probably would be able to find an associate opportunity somewhere.

[00:33:48] What, what are your thoughts on that?

[00:33:50] Tessa: Oh, you’re 100 percent correct. Right now, there’s just, there’s a feast of employers looking for optometrists right now, and I, going back to what I said, was very lucky to be somebody who lives very conservatively. I don’t need very much in my life. I developed a pretty Solid cushion for myself and anticipating the relocation.

[00:34:13] And you’re right. It is, creates a lot less stress when you have that liquid money that, you know, if something happens like stepping away from a design build company or stepping away from a purchase that you’re almost gonna purchase a building that that liquidity, really made it easy for me not to stress that much about the relocation.

[00:34:33] But that said, if you’re, if you don’t have that and you do need to support the startup of your practice, I know so many people that have worked part time at their new private practice and then part time at either another private practice as an associate or a corporation. It’s very common to do that.

[00:34:51] And it’s really easy because the reimbursement is fairly high now, given that So many corporations need to have associates that they are handing out bonus checks for signing. They are, you know, paying really high right now. that’s not something that should be. Shied away from having a part time job while you’re working on your own practice.

[00:35:14] Makes it easy.

[00:35:15] Evon: yeah. Well, what are some things you learned for the first time or had to relearn going from the sublease into now private practice?

[00:35:24] Tessa: Well, undertaking an optical even though I’d done it 15 years prior is another huge undertaking. There’s a lot to learn when you want to talk about managed care and reimbursements, and it is kind of a convoluted issue where you really have to learn how to play the game when you talk about profits of glasses, especially with managed care insurance plans.

[00:35:45] So that was a huge learning curve. It was really nice to have the operations of my business already solid. And I just needed to add that to it. But when it comes to one of the biggest things that I learned, you had touched on it earlier that having the right team is key. I am a stubbornly independent person that tends to always say, I can do this myself, but with this and running a practice, you really need to have the correct people.

[00:36:14] When I first started working with a real estate agent, they were just general agents and they would show me a size space that I was looking for. And then it was right next to another optometry office, or they would offer me another location that was the correct size, and it was in a location that had flooded a year earlier, and they were really just showing me different spaces without doing the due diligence to make sure it was an appropriate location.

[00:36:44] I then got rid of them as well and developed a relationship with another real estate agent who knew the space, did only health care, was vetting the people around me to make sure that I didn’t have a lot of competition. They introduced me to banks, they introduced me to equipment dealers, and it was that who was my key partner.

[00:37:06] person that was showing me all of the different directions I needed to go in order to successfully move this forward. so when it comes to the build out aspect of it, the key is having the right team and making sure you’re working with, good people that are there to help you with what your goals are.

[00:37:22] Evon: I appreciate you saying that. I think there can sometimes be this thought that if you’re not buying The commercial property or if you’re not building, you don’t necessarily need a good, good representation on the, on the lease side, but I think as you mentioned, you can find a lot of value by working with someone who knows healthcare, who knows optometry and searching for the right location, the right lease, even things to negotiate as a part of that lease process.

[00:37:49] So I think there’s a lot of value to take away there.

[00:37:51] How To Learn to Manage the Optical Side of the Practice

[00:37:51] Evon: in terms of learning about, buying inventory, managing inventory, all the lab stuff, everything that goes into, buying and managing the optical. How did you learn? I mean, what, what are some thoughts around how to learn? is it just experience or are there any resources you went through?

[00:38:07] Tell us about that.

[00:38:09] Tessa: That was the one where I had a little bit more of a struggle. I can tell you that iCare Advisors was pivotal in helping me with that. It is a very challenging thing to take on, which I know can prevent a lot of corporate sublease owners having fear on taking that leap. Because running an optical is another huge undertaking that maybe they just want to avoid, but there are resources out there.

[00:38:33] iCare Advisors did a fantastic job helping me with that. But also frame companies and lens companies and everybody within the industry. If you sell their product, they’re going to be happy. They want you to sell their product. So they’re going to give you a lot of tools to sell their product appropriately.

[00:38:52] And that was another big thing I learned is that a lot of people in industry do have unbiased ways to help you succeed as well. Because if you succeed, You are also then helping them succeed by selling more of their products. And it was those relationships that were surprising to me that really helped me be successful as well.

[00:39:12] Differences In Marketing the New Private Practice

[00:39:12] Evon: going from the corporate sublease under LensCrafters to now your own independent business entity, what are some of the differences in marketing that you’ve learned from, from going from one to the other and now having to market your own business?

[00:39:27] What are some things around marketing that you’ve had to change or learn for the first time?

[00:39:31] Tessa: Marketing is a big one. And being in a corporate sublease where LensCrafter’s name was on my door, and they have advertising on television and online with major celebrities that you can’t beat that because they really put a lot of millions of dollars of money into making sure that people come in their door And now it’s all me.

[00:39:55] I have, it’s just little old me and I have to let people know that we’re out there. It is very important to strategize your marketing in that you can invest a lot of money on something that falls flat. And having a key group of people in your, in your wheelhouse for, for them to help you do online marketing and direct to consumer marketing.

[00:40:18] And I’ve been advertising a lot in my community. One thing I didn’t say is that I actually relocated nine miles from my sublease, which in Madison isn’t far, but it’s on the other, other side of Madison. I went from the east side of the west side to the east side and that’s unheard of. so a significant portion of my budget has gone to being strategic in my online presence, my online marketing and developing relationships with people in the neighborhood with.

[00:40:51] Direct mailers and direct marketing.

[00:40:54] Evon: What do you feel, looking back now, I mean, you, you’ve gone through the transition, you’ve now have roughly two years, in, in private practice. What do you feel went really well? What, what are you proud about, about what, what really or exceptionally well as a part of the process?

[00:41:11] Tessa: I do now feel that I have an amazing team. I have, I have an amazing team with With my real estate agent, who I obviously am only talking to in case I aspire to open a second location, but my accountants and my bankers and my builders and my, the management of my current building that I’m in, the team that I have to support the practice is just great.

[00:41:38] It took a lot of hiring and firing to get there, but once you have a key team of people, then it runs smoothly. pretty smoothly. Two years in, it went by fast. It really did. But I can tell you, there are still things that I’m fine tuning.the one thing to know is that just because you set a policy in place or a price on that lens, that doesn’t mean that you can’t change it.

[00:42:03] If you realize it’s not the best fit, or if it’s not as profitable as you want it to be, and realizing that you have to kind of stay rooted in your goals, but be able to pivot and modify things as you move forward.

[00:42:17] Evon: Yeah. One of the benefits of ownership, right? You, one of the challenges of ownership is you have to make all the decisions. One of the benefits is that you can. Make decisions and adjust and track data and make adjustments as you go. And if you could go back in time, what lessons would you teach yourself or what challenges would you, warn yourself about, going, going through the process?

[00:42:40] Tessa: Yeah, you know, that one’s hard to say because I did go from not really having any experience at all with building, building out a location or even working with the finances to prove my value. There were a lot of, I don’t even want to call them mistakes because there were a lot of mistakes that I could have avoided, but I learned in the.

[00:43:02] I learned in the process. So, for example, should I have not hired that white glove design build location in Chicago? Probably not. They would be good for somebody that has a significant amount of cash and wants their practice to look pristine. So, I can’t say that was a mistake except for my My loss in my deposit.

[00:43:24] I wish I could have avoided that and stuck in my roots that I know that, my beautiful location that people cannot tell is a budget build out, isn’t, My, my, my mentality is I don’t need to have gold on the walls and I should have stuck with my instincts on that one or, you know, working on buying that building, I, I almost, I almost got a week away from closing on that building and I had to walk away from it and, it, it was truly very, very, very difficult to walk away from something that I have put so much time into vetting.

[00:43:58] to see if I could go into that location, a lot of time and money, and then also walking away from that. So in short, if you want me to say what I wish I could have changed, I would have liked to avoided those two scenarios. You know, I wish I could have like picked out my low, my prime location right from the beginning and not wasted so much money, but I can say that I learned a lot in both of them.

[00:44:22] And not knowing much at the beginning and then learning from those processes. I don’t think I would have changed it.

[00:44:29] Evon: yeah, it kind of sounds like if, if someone were to just be really clear around the, the, the non negotiables about their business and then where they see their self, themselves going in the relatively near future and, and giving yourself, you know, like space, like you, space is something that seems like, you know, It’s, it’s kind of a non negotiable because you can’t easily add it.

[00:44:58] And if you feel like you’re going into the stage where you’re going to need that extra space relatively quickly, that might be a, is something where you’re willing to pay a little bit more on. But the, the, on the other hand, the balance against that is that you didn’t feel like you needed top of the line aesthetics or design around, around.

[00:45:15] So that was sort of the trade offs that you were thinking about and thinking about where you are now, what you would need now in the moment. We are going to be heading in the future and balancing those things that are non negotiable and that can be added on in the future. So, I’m sort of rambling on, but you, you had eventually going through this experience, you kind of had in your mind, like, okay, after you’ve learned these lessons, you figured out these things are the things I absolutely need now to get up and running, to have a good business and to provide good patient care, knowing that you can add these extra things as you go.

[00:45:48] You know, these are things you want. These are not needs. These are things you can add as you go. And it sounds like those are some things you’ve learned through that experience of balancing those non negotiables versus things that are nice to have that you want to have into the future. Would that be sort of a good summary?

[00:46:03] Tessa: Yeah, that’s a great summary. And a lot of the unknowns too, the small details that I didn’t realize that I did or did not need were what I learned from these conversations and walking away from these two locations. So, you did hit it on the head if you did. If you are steadfast in knowing what exactly your non negotiables are and what you’re willing to be flexible on, it may allow you to avoid maybe negotiating too far into a location where you’re being too flexible on some of your must haves.

[00:46:33] Evon: Yeah, I feel like one of the benefits of having someone in your corner, like an ICARE advisors is a good professional team can help you like sift out what’s actually a non negotiable versus what I might feel as is a non negotiable getting into it. I think that might be one of the, you know, taking the wisdom from other professionals in, in their field is kind of been able to filter out, like, what do I just feel like is, is a non negotiable versus what’s actually needed to get the business, a good business up and running that can provide good patient care.

[00:47:06] Maybe that’s where someone in your corner does a really good job at helping you out there. Interesting. I, I, this is ultimately a podcast about finance. . I am curious what you’ve seen, and you don’t have to provide like specific numbers, but I’m curious about what you’ve seen in terms of the financial realities of owning a corporate sublease versus owning now a private practice.

[00:47:29] And I’ll explain because you’ve talked about there are potentially new, income opportunities because you are not only able to get paid for your services, but now you have the optical. So you are able to benefit from having the income opportunities, in the optical, but you do have additional costs and challenges, right?

[00:47:47] You’ve got the costs of the build out, the new lease you have to deal with, you have to buy and manage inventory. in the average optometry practice, cost of goods sold is going to be a pretty large chunk of, of, of expenses when you, when you compare it to revenue. You have the staff costs, What have you seen?

[00:48:05] Just in terms of the differences in both income opportunities from a financial standpoint, but also expenses to keep an eye on from a financial standpoint?

[00:48:14] Tessa: Yeah, so when it comes to a corporate sublease, you really don’t have to walk into that with a tremendous amount of cash. I did buy the practice from the previous owner, but it was for a very small amount, unfortunately for him, but I didn’t have to go into that. I started as a young optometrist asking a lot of money from a bank.

[00:48:34] I was actually just to gain support from my family and able to move forward with that. And the cash flow of the sublease being established paid for my associates and my employees right from day one. So it wasn’t a tremendous amount of effort out of my pocket in, putting a lot to invest in it. It just started working on its own. I luckily, again, did put a lot of money away moving into my new location. You do need to have There is definitely an investment in the equipment and the build out and the, the frames and the contact lenses and the inventory there. It is a significant investment, hundreds of thousands of dollars, but I think I’d like to consider myself more of a lukewarm start.

[00:49:26] I wasn’t a cold start and may have a little bit of a different experience than other people in that I, I had a, you know, tens of thousands of people that I could try to pull to my office with marketing right away. But, moving to the new location, I do have a pretty significant bank loan, but it has not been a struggle to pay any of my expenses since then.

[00:49:47] There’s a lot more moving money. You know, you do have to have inventory sitting in the optical. That’s a significant expense over top of the equipment that you’re used to. I do have a higher number of staff, which, right now and, with inflation, I think that the biggest expense I have right now is staffing.

[00:50:06] I like to try to pay them decently well. But when you have the addition of an optical, that’s, Not passive income, but it’s not income that’s coming from the exam lane. Your, your staff, they’re selling that. So it’s, it’s almost like you’re making income from the services like I would with the sublease, but you’re also making income simultaneously from the optical and the goods that you sell and the eye drops and, and your expenses are higher, but the income is significantly higher and the margins aren’t what you want them to be, but they can be pretty good on glasses to support that as well.

[00:50:43] Future of Innovation and Technology in Her Practice

[00:50:43] Evon: Yeah, very interesting. I’ve seen you just kind of looking through some of the other interviews you’ve done and what you’ve talked about over the years. And, you seem to talk a lot about innovation and technology and, and different things like that. And just in your own business, what do you see in terms of the future of innovation in optometry that excites you for, for your own practice?

[00:51:04] Or where do you see yourself taking your own practice? What directions do you see yourself taking your own business that excite you?

[00:51:11] Tessa: Yeah. And that’s a good question because I completely nerd out about iCare. I always get excited about the new things that are up and coming. I love the fact that we will hopefully soon be able to have artificial intelligence incorporated into some of our imaging. I know that’s going to be a big industry disruptor, but I think that’s something that we’ll have to embrace as a tool more so than something that will work against what we do.

[00:51:36] But I’ve really been developing pretty quickly my office into a dry eye clinic. I did bring in an IPL and a triple LT and have been full force bringing in equipment to have this luxurious dry eye suite. I made one of my exam lanes into a treatment center where I have a lounge chair that vibrates to a particular wavelength that helps calm people.

[00:52:01] And it’s It’s meditative. It’s supposed to be like almost like an antidepressant calming effect that people get while they’re having these eye treatments. and that right there speaks to the beauty of private practices. I can do whatever the heck I want now.

[00:52:14] Evon: Fascinating. Right. Wow. That is so interesting. I’m just trying to imagine myself as a consumer. I’m like, what would that be like to sit in something like that as I’m getting my, my eye care? fascinating. Any final thoughts that you’d like to leave with the listeners just from going through your experience in LensCrafters, now your experience with a couple of years of, under private practice, any final thoughts you want to leave with the listeners?

[00:52:41] Tessa: And my final thought is that it’s not easy. You see a lot of colleagues that have done this and they make it look easy. It’s not, but I don’t like to say that to discourage people. I actually want to say it to encourage anybody that’s even thinking about it. A lot of the younger optometrists I talk to are a little bit hesitant on opening a private practice, fearful of their large amount of student loans or the highest, higher interest rates out right now, but it absolutely is doable.

[00:53:12] It is extremely worth it. It’s very fulfilling. And as long as you develop a large team of people that will help you out, you will not fail. And if there’s something you don’t know, you will figure it out. Don’t let fear get in your way of doing it. And, there are people like me. I love helping and supporting anybody I can with anything that I’ve learned.

[00:53:35] That there, there’s a lot of people you can surround yourself with that have done this before and will help you move forward.

[00:53:41] Evon: Well, I really appreciate you sharing that. I think that’s a fantastic way to end the conversation here. And this has been a lot of fun and I appreciate your time today. I appreciate you so openly sharing your experiences and things you’ve learned and things you would have done differently. I think this will be a big help to the listener.

[00:53:57] It was fascinating for me to hear. Where can people find you and follow you and learn more about what you’re doing?

[00:54:03] Tessa: Oh, I put myself out there quite a bit. Every handle that I have is @sokoleyecare. You can find me on any social media platform and, on my website as well at Sokol Eye Care that’s, that’s one thing that I find is interesting is it’s really important to do that. Patients want to see who you are. So if you don’t have a website or a social, social media pages, it’s the easiest free thing to do to start to market yourself.

[00:54:28] Evon: Well, we will put links to all of that in the show notes, which you can find by just scrolling up in whatever app you’re using. and again, Dr. Sokol, really appreciate your time. This was great. for the listener, appreciate your time and listening for today. We will catch you on the next episode. In the meantime, take care.

[00:54:44] ​