£50,000 funding for an optician at short notice: Launching a mobile servicePublished on 4th November 2019 2019-11-04T08:35:39+00:00
If you are running an opticians’ practice, you face serious competition from the franchised practitioners.
They seem to be able to call on substantial resources which allow them to ring in new equipment and attractive retail areas to customers - and which can make it harder for you to compete.
Fortunately, there are ways to provide the equipment you need to remain competitive and to spread the cost.
We recently helped an experienced ophthalmologist set up a new service which would let him compete against a major chain which had moved into his area.
The initial challenge
Our client ran a long-established practice serving a small town in Worcestershire. His practice had an established patient list, and the business was producing steady profits.
“Things were looking good. I had a long list of patients and many of them had bought every pair of glasses they had ever had from us. And then, of course, a franchise came to town and suddenly I had a competitor.”
The new franchise opticians had a full suite of modern diagnostic tools including OCT, autorefractor, tonometer and a basic retinal imaging system.
Our client realised that he would need to re-equip to offer the standards his customers would get at the new franchise, and started bringing in the equipment he needed using Asset Finance to spread the cost.
“Client numbers were down at first when there was another optician in town, but with a refit of our sales area, a refreshed shopfront and some of the latest systems in my consulting room, they were starting to come back. Some of them even said they preferred the personal touch.”
Reinvesting in the business ate into our client’s profits, but he was happy to do so if it meant that his practice had a future.
“Looking back, I should have been putting more money back into the business for years. I was getting more done in less time, and I had spotted a couple of patients with conditions, such as incipient glaucoma, that I might have missed if I had still been relying on the old ways of working.”
A new challenge to overcome
Our client was financially stretched, but he felt confident that he would be turning the corner, when the franchise offered a new service.
“Suddenly, they were offering a mobile service. I had many patients in nursing homes who would have to make quite an effort to come in and see me - now my biggest competitor could simply go and see them, and take care of perhaps ten or fifteen patients in an hour or so. I realised that I had to offer a mobile service too.”
He already had some key pieces of equipment, such as his hand ophthalmoscope and a lightweight trial frame and a kit of lenses. With some iphone-based equipment he could provide basic examinations that would be on a par with the service he had offered in his consulting room in the past. If he found patients with problems, he could call them in for a detailed examination in his surgery - but he would need a portable eye test kit.
However, he realised that he needed an additional £50,000 to provide this new equipment, along with a suitable vehicle.
“I often came into the surgery on a bike - I could not turn up at a clients house, or a nursing home, on that.”
As a professional with an established practice, borrowing the cash required should not have been a problem - but the extent of his existing borrowing meant that, in the eyes of many lenders, he had reached the limits of what was affordable.
“I needed to borrow more to stay profitable - but lenders were not prepared to help.”
Our client needed to find funding fast - before the service from the franchise became established.
How we helped
We looked at finance providers who specialised in the opticians’ sector.
One of these suppliers was able to provide the £50,000 required at just 8% over 5 years. However, this was as a Secured Loan - which could take months to arrange.
However there was an alternative. We knew a lender who could offer the £50,000 at 9% as an Unsecured Loan. The costs were a little higher - but it meant that our client could have the cash he needed within a week.
Our client was able to take delivery of his mobile equipment, and launch his new service straight away. His knowledge of the area and local connections helped him find plenty of demand for his new mobile service.
The future of his practice is looking clear again.
At Rangewell, we help opticians find innovative answers to their funding needs. Our experts will find the most appropriate solutions while our network of contacts and our unique online tool let us find the most cost-effective rates. If you are looking for funding to grow your opticians, then contact our Medical Finance Experts today.
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