What does it really cost to set up an opticians?Published on 5th November 2019 2019-11-05T12:00:00+00:00
An opticians' practice can be a thriving business. Your turnover will depend on the number of customers you see, and the frame choice you offer - but, with an established business, a turnover of £million should be within reach.
But not every optician reaches that level - even in prosperous towns in the south of England.
As an independent optician, your ability to give a personal service will mean you can compete against the big chains and the franchises, and enjoy that level of business – but you will need to invest to do so.
You will need to invest in everything from premises in the right location to the latest equipment in your consulting room. You will need a fashionable interior with the latest frames on display, and sales tools like video and smart mirrors to provide the sort of experience customers are now demanding.
So, what are the costs involved?
The largest cost will be your premises
Unfortunately premises are potentially one of your biggest outlays. You need to find a location which ideally does not have any other opticians nearby - a high street location close to public transport and parking might be ideal.
You will also need to think about your shop frontage onto the street – people need to know that you are there, and you need space to provide a display that will attract their attention.
You will also want a consulting room. The trend seems to be to have more space to allow for the growing amount of equipment you will need. If you are looking around for property, remember you might want to think ahead in case you need to add a second room for a junior to make the most of your business.
You will also need a display area where you can show a wide range of frame styles.
The actual cost will depend on your location and the floorspace you choose, but you could easily spend £50,000 a year to lease suitable property.
Surprisingly, buying might be a cost-effective alternative. You might want to consider buying with a Commercial Mortgage which will give you greater security than renting and let you build up a valuable asset for the future. Buying could also provide an additional income; letting out a flat above the shop could be a rewarding possibility if you buy the building.
But leasing or buying the property will not be the end of your costs.
For a new practice you can expect to pay for a shop fit of between £100,000 and £200,000 dependent upon the size of the premises. Shopfitters specialising in the optician sector exist, and some may offer their own finance plans. At Rangewell, we have found that it may be more cost-effective for you to negotiate a cash price for the work, and to raise the cash required with a loan secured on your premises. Rates can be much better than those provided by suppliers.
You will also need an IT system, costing a minimum of £10,000, and to buy in stock, which may be in the region of £20,000 if you are not able to negotiate credit from suppliers.
The other major expense will be your optical equipment. The minimum you will need to equip of one consultation room and pre-screen area is around £40,000, and you may wish to bring in additional equipment – such as 3D imaging systems which will take the cost far higher.
As an experienced ophthalmologist, you know the equipment you need to give the level of care your customers deserve. Again, suppliers may offer finance which can prove expensive. The solution may be to spread the cost of equipment with Asset Finance. Basic equipment that will go on giving service for years can be financed with Hire Purchase to spread the cost. If your priority is your need to avoid upfront costs, leasing will give you the freedom and flexibility you need.
You will also need to budget for operating costs. You’ll also have staff and overheads to deal with and when your optician's shop is still in its early stages you may have more costs to cover than income.Working Capital Finance is intended to provide cash to pay staff and suppliers during the early weeks and months of opening your business. It is designed to be repaid in the short- to medium-term.
Get help with funding for your opticians
The costs involved in setting up a successful opticians practice may be daunting, and most people will need to borrow the money required.
Many lenders will be keen to lend to the sector, seeing it as a low risk - but first-time business owners may still face some challenges as many lenders are still reluctant to support start-up ventures.
Buying or setting up, the right funding deal and the right lender may make a big difference to your repayments - and hence to the profitability of your business.
At Rangewell, we work with every UK lender, and have access to more than 23,000 business finance products - and expert advisors who understand the challenges of setting up and running an optician practice as a business.
We can help you find the funding you need, and to pay less for it. Our services are free - so if you’re looking for financial solutions to set up your optician shop, find out more about what we can do for you.
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