Manage episode 273423615 series 2798570
On this episode of 20/20 Money, Nathan Hayes from IDOC and I discuss how optometrists should be thinking about cash flow in their practice. We discuss how much cash reserves ODs should have in their practice in the wake of COVID-19 as well as why it’s important to get cash out of your practice instead of letting it sit in your business. Nathan also shares why leaving cash in your business might actually hurt your valuation from a buyer’s perspective. We also talk about how to reduce your tax bill as a practice owner and why it’s important to not “red line” your personal lifestyle against the distributions from your practice.
Our conversation then ties into how managing cash flow in the practice transitions into using that cash flow to accumulate and grow your net worth, the importance of not banking on extracting max value from your practice to fund your retirement, the 5 D’s of why a practice owner could be forced to sell, and how solo owners can and should be looking at a buy-sell agreement with another owner in their town as a contingency planning strategy to ensure that all is not lost in their practice if they’re forced to sell early.
In financial planning, we often hear the phrase “cash is king” and the variation on the theme with this episode is that cash (flow) is king. It’s not what you make, it’s what you keep that matters and in this episode we share many different strategies that optometrists should be considering when thinking about cash flow in their practice. As a reminder, you can get all the information discussed in today’s conversation by visiting our website at www.integratedpwm.com and clicking on the Learning Center. While there, you can also set up a 20-30min Discovery conversation to learn a little bit more about how we serve ODs around the country & what it means to work with our firm or check out any number of additional free resources like our eBooks and on-demand webinars.
And with that introduction, I hope you enjoy my conversation with Nathan Hayes.
For past episodes of 20/20 Money with full companion show notes, please check out our episode archive here!