George & Matilda Eyecare is primed to sign off on several new acquisitions as more independents see the value and safety of joining a collective in uncertain times.
Independent optometrists know well the burdens of business administration, while trying to work through full appointment books. Tasks like payroll, recruitment and patient recalls can either fall off the to-do list or eat into evenings or weekends. Taking a holiday can even be tinged with guilt.
Many were already stretched beyond their capacity, but COVID-19 and yo-yoing lockdowns have created all new back-office problems with landlords, lenders, suppliers and human resources. These were fraught issues most hadn’t encountered all at once, fuelling anxiety and consuming valuable time that could have otherwise been spent with patients.
Mr Luke Algar is the head of partnerships for George & Matilda Eyecare (G&M). The collective was established in 2016 by prominent industry figure Mr Chris Beer who devised a model focusing on partnering with high performing, community-focussed independents.
Since the pandemic, Algar has been building a comprehensive pipeline of potential acquisitions, many whom approached G&M seeking security in turbulent times and for new ways to run more profitable and efficient businesses.
“COVID created urgent jobs on top of other urgent jobs, dealing with supply chain, reps, PPE, communicating with patients about opening hours. It made a lot of great optometrists and businesspeople realise the downside of being by themselves,” he says.
“When people have looked at their options, I think G&M has been uniquely placed because we know optometrists don’t want to lose their freedom and flexibility of being an independent – things like appointment durations and the way they care for their patients – but what they do want is someone to lighten the load, while also offering expertise and sophisticated platforms that add value and help to grow their business.”
In five years, G&M has taken its network to around 90 practices. Algar says two more in Queensland are set to join soon, one in North Lakes and the other in Atherton. But the company expects this to ramp up considerably, after recently refinancing and securing a significant line of credit from one of the big four banks.
He says standing up to the scrutiny of a major financial institution is indicative of company’s fiscal health and capacity for growth. G&M also used COVID-19 as an opportunity to re-examine its financial management. A major part of that has been streamlining its supplier network to ensure its optometrists have the best chance of increasing their margins.
“With COVID we have managed to grow the business beyond anyone’s expectations, but we have been purposefully slow in terms of bringing on new practices, so we could ensure our existing practices could get through unscathed and stronger out the other side,” he says.
“Now we know what COVID looks like, we are ready to scale up – the pipeline has expanded dramatically over the past year, so you’ll start to see a lot of that flow through very soon.”
The G&M model
G&M’s unique business model is one of the biggest drawcards for independents. It provides significant back-office support and infrastructure so its partner optometrists can dedicate more time to their patients. In the majority of cases, it purchases the assets of the business and co-brands, building on the existing brand equity. The optometrist becomes an employee, but still shares in the profits.
Algar says the company has always been built for scale, but is conscious of becoming too corporatised or top-heavy. A feature of its model is the ability to mesh the G&M systems without interfering with the practice’s clinical individuality.
That means it is selective about who joins the network. There is a rigorous due diligence process, which involves aligning values and specific commercial requirements.
“Each practice that joins has different motivations and we try to understand that upfront and find out what success looks like. Once we have that level of detail and are clear-eyed on expectations, we are then able to develop a business plan for that specific practice in the first 30 days, 90 days and 12 months,” he says.
“Our whole model is based on taking practices that were already successful to the next level with extra resources and expertise. That’s why we have a goal of growing practices in the first year; we want to demonstrate the value we can add early in the relationship which then builds trust, which is crucial in any partnership.”
G&M aims to provide value on numerous fronts. Buying and administrative power are the obvious advantages. But it has also invested heavily in technology and platforms that would otherwise be out of reach for standalone business. This includes the integration of artificial intelligence to send highly personalised patient recalls, as well as in-house data scientists who can analyse the trading performance of each practice to highlight opportunities, trends and inefficiencies. Practices can also benchmark their performance against others in the network.
“Other aspects include helping practices plan and manage their assortments, rationalising our suppliers to make sure we are getting not only a healthy product mix, but the best margin for all of our businesses. Having people who can work through the data on that and come back with something that is considered and thought through for the partners to sign off on has been a really big help,” Algar says.
Staff training is an area optometrists often struggle with, so G&M also has modules on various topics – such as product, sales and mentorship – to help optometrists and dispensers provide better customer experience, ultimately translating into more conversions.
“One of the lovely things that happens organically outside of formalised training programs is that the optometrists call each other directly to talk through certain situations,” Algar notes.
“As an independent you can feel like it’s you against the world, so many of our partners have found it great to suddenly have a bunch of like-minded people at the end of the phone with diverse skillsets and experience to draw on.”
Whether it’s growth ambitions, succession planning or a desire to devote more attention to their craft, each practice has their reasons for joining G&M.
Mr Ken Ingram, of Greg Bowyer Optical by G&M Eyecare near Brisbane, says one of the greatest benefits has been an ability to remain involved, while letting go of the many business aspects he has been handling for around three decades.
“When the opportunity to join G&M came up, I looked at the model and thought, this is the best of both worlds. There’s a corporate setting, there’s support in the professional sense, in the clinical sense, and there’s support with payroll and back-office functions, but I’ve got an element of independence in how I practise,” he says.
Since joining the group, store profit in the past year has risen 35-40%, without a big increase in its top line.
“We’re quite a mature practice that’s been in existence for 30 years, so having exponential sales growth is difficult, but G&M have helped us with controlling some of the costs and making things much more efficient. The end result has been a significant profit increase, which I’m really proud of my team for achieving.”
For Mr Dirk Den Dulk, from Partners in Vision by G&M Eyecare in Albion Park in New South Wales, maintaining his individuality as an optometrist has been vital.
“They allow me to practise the way I like to practise optometry and never interfere in that side of the business, so I’m fortunate enough now to be able to deal with my patients, the people around me, without having to take home the worries of business,” he says.
“I would urge anybody who was thinking of selling to do yourself a big favour and get out and do what you love doing.”
Mr Kyriacos Mavrolefteros and his optometrist wife Katerina established their practice in the Sydney beachside suburb of Maroubra in 1994. If he didn’t join G&M, Mavrolefteros would have struggled to continue practising and running the business beyond another five years.
“Whereas now, I’ve handed over the business things and I can be as good as an optometrist as I possibly can in the next decade. It has given me longevity as an optometrist and people tell me that I’m much more relaxed than I was before – and I feel it too,” he says.
After practising for 38 years, Mr Stephen Wakeling is also thinking about the next phase in his life. When it’s time to relinquish the reins of Prime Vision by G&M Eyecare, in the Melbourne suburb of Oakleigh, he wants to do so on his own terms.
“I’ve got the ability to take holidays when I want now. Previously, as the owner of the business, I’d feel guilty if I took much time off,” he says.
“But now as an employee it’s great that I can take my holiday and not have to worry about what’s happening with the business in the meantime because G&M is organising all that for me. In the background they can organise locums and the rest of the staff are there, it works much better.”
UNSW senior lecturer Ms Margaret Lam is national president of the Cornea and Contact Lens Society of Australia (CCLSA). She’s also an optometrist partner at theeyecarecompany, a three-practice business that joined G&M seeking a step change.
She says it’s a true partnership that motivates optometrists to look after their practice, while considering innovative ways to improve the business in consultation with support office.
“Reflecting back, joining G&M Eyecare was the single best strategic decision we’ve made helping our optometry practices grow. Joining G&M gave us the background and structural support we knew we needed to sharpen our business and then, in turn, improve our overall service to our patients,” Lam, who is also head of professional services at G&M, says.
“The team have been guiding us at every step with good expert advice. If we have, for example, issues with leases and landlords, Chris Beer has amazing connections to support us with expertise in the leasing space. If we have issues with people and with HR, we have amazing in-house counsel to advise us on the best next steps. We now have a really strong marketing department to do clever strategic marketing and the best of IBM Watson algorithms to optimise and personalise recalls to our patients to hit new heights on recall success.”
More information about partnering with G&M can be found here.