Earlier this week, we had the opportunity to sit down for a live webinar with Anna Lam, OD (Oxnard, CA) and Chun AuYeung, OD (Wheaton, MD). Both are Target Optical sublease holders, and they spent an hour sharing their experiences with working with Target Optical, which is owned by Luxottica. Here are a few things that we learned from the webinar.
1. A Target Optical sublease is a happy medium between private practice and corporate.
The way it works is that you sign a lease for a given amount of time and, in exchange, you’re able to practice within a Target. You’re able to practice however you want, and nobody tells you how many patients per day you need to see, or how you should practice.
There are very low overhead costs, as Luxottica provides all pre-testing equipment, auto refractor, NCT, FDT (in some places), slit lamp, and phoropter are provided. Another perk is that all of your contact lens trials are set up before you get there. Dr. AuYeung was provided with the majority of equipment, and says doctors are really only responsible for a printer, computer, paper/pens, and internet where applicable (for an EHR, unless it’s a established practice and paper charts are ok). And, in Dr. Lam’s case, she even gets those covered! All she really had to purchase was eyedrops and pharmaceuticals!
A sublease holder does need to buy their own credit card machine, as well as any equipment not found in the list above. Dr. AuYeung reports that he shopped around for rates, using ODs on FB, local banks, etc. Additionally, Luxottica now offers an OD Marketplace with pre-negotiated pricing, leveraging their scale, to get their doctors the best deals possible.
Dr. Lam chose to add an Optos Daytona retinal camera for her practice. She is on their rental plan, but she reports that Luxottica offers discounts if you decide to purchase additional equipment.
2. You don’t need to be a marketing whiz to take on a Target Optical sublease.
When you start a Target Optical sublease, you’ll have free access to an OD marketing portal toolkit which allows you to:
- Order business cards for free
- Get social media account setup assistance
- Get access to other marketing expertise
- Manage your Target account through the portal
- Order free OD BIO flyer, Target Optical sales with your name on it, etc.
That said, both Drs. Lam and AuYeung recommend that you take additional steps to improve your foot traffic. Dr. AuYeung recommends starting before you sign the sublease. He suggests newspaper ads, starting a Facebook page, and blogging, pointing out that Target is newer to the optical game, and many folks don’t even realize that seeing an OD in a Target is even an option.
Then, he adds, you can use Facebook ads within a 3-mile radius to ensure the article is seen by your intended patient base. This can help to drive new patients to your practice.
He points out that another option is to reach out to insurance companies where you’ll be on the panel before you sign the sublease, just to let them know that you’re an option for their patients. This way, patients can find you under “Providers Near Me”.
Dr. Lam agrees that marketing is key. She held another sublease where she didn’t get to market beforehand, and she reveals that her experience was much smoother at Target, when she decided to market before opening her doors.
She also believes in a true partnership mentality with optical sales team. She frequently takes patients to the optical store after their appointments and personally introduces them to the staff, even if the patient isn’t sure if they want to buy anything that day. But, she points out, the optical side offers good value to patients, so they wind up making a purchase. The optical side helps her build her patient base, by doing outreach in the store, then introducing shoppers to Dr. Lam. After their exams, she completes the continuity of care by advising the patient and optical staff what a patient needs to maximize their vision.
3. Tons of perks are included in a Target Optical sublease to make things easy on the doctors.
RevolutionEHR is included in the rent. It works with the automated equipment that’s included in your sublease, so creating prescriptions is as simple as pressing “print.” Revolution EHR is also compatible with the online scheduler, so scheduling follow-up appointments is a breeze. What EHR you have will vary by location, especially if the sublease has been running for 10 years.
The doctors agree that a simplified EHR helps with patient rapport as well, pointing out that they don’t have to spend half their appointment time with their backs to their patients. The RevolutionEHR even collects patients’ emails and contact info, which Dr. AuYeung uses to send a follow-up thank you note. He also requests patients to provide feedback of their experiences with links to Yelp!, Facebook Reviews, and Google Reviews on the bottom of the e-mail. He points out that everything is as simple as a few clicks, while the same process would be a huge organizational hassle in a traditional private practice.
Dr. Lam agrees that being paperless is great, as it ensures there are no lost charts and it keeps her consistent with her treatments and health history documentation. Case histories are all stored in Revolution EHR, and you can get the patients setup in their own personal patient portal, where they can print their own charts and prescriptions, and they can even chat with you if they have questions. Both doctors agree that it’s a great tool for a busy practice.
4. Acquiring a Target Optical sublease is surprisingly hassle-free.
You can take over an existing sublease, or you can start a new one. In Dr. AuYeung’s case, he reached out to a friend who was happily running a Target Optical sublease location. This friend connected him with a regional representative, whom he was able to contact for an interview.
Dr. AuYeung and Dr. Lam highly recommend using CovalentCareers, an career development platform for optometrists. Using CovalentCareers will enable you to connect with a OD Success Manager on their team who will personally hand you off to the correct regional representative at Luxottica. This streamlines the process and ensures the highest likelihood of securing a sublease in areas where subleases are in demand. Additionally, the OD Success Managers will answer all of your questions and give you an honest idea if a Target Optical sublease is right for you or if a different opportunity would be best.
Dr. AuYeung was pleasantly surprised by a relatively informal interview process. He explains, “They were looking for the right person – someone motivated and savvy and hard-working.” While there were other candidates being considered for the sublease, he was ultimately chosen. He believes it’s in part because he shares the Luxottica and Target core values of caring about people and taking pride in one’s work.
Dr. Lam reports that one of the first phone calls she had with a regional representative involved both how often she wanted to see patients, and how often see wanted to see them back for their annual comprehensive eye exam. Dr. Lam wanted to see patients once a year, and she states, “Target was totally onboard with this.” This definitely influenced her decision to take on the sublease; she felt like it was a partnership and that Target had her back with her eyecare values.
A 1-year lease is standard, and the rent varies. If it’s a new sublease, the negotiated rent will differ from an established sublease. Both doctors agree that you can often make your month’s rent in 1 day’s work. The nice thing is that you can pocket the rest. Rent tends to vary between $400-700/month. Additionally, as you establish your practice, Target Optical now offers extended three year leases which provides added security and confidence to grow your practice.
5. Even a sublease requires taking a few business steps.
Before a Target Optical opens, you need to register your business and business name, decide on the entity you want your business to be under, and obtain a tax ID from IRS.
Dr. AuYeung was able to get his tax ID while setting up his business checking account. Not only you can do a lot of it on your state’s website, but they provide a checklist for start-ups, help establish a checking account for your business, as well as a business license. The doctors also agree that you’ll likely need an LLC or S-corp, though they strongly recommend you work with an accountant and/or financial advisor to determine which one will best suit your needs. If you’re starting a new sublease, you might also be responsible for purchasing a credit card machine. If you’re going into an existing sublease, you still need to do all that because it’s your business. It’s a bit of a headache, but an exciting/good headache…the type that comes with building something of your own.
Dr. Geller points out that getting an LLC or S-corp is vital. Business entities exist to simplify your accounting, as well as protect your personal assets. Also, if you’re planning to co-own a sublease, these entities will provide options for dividing equity between partners.
6. But, as with everything else, Luxottica takes much of the burden off the doctors.
When you sign a sublease with Target Optical, you’re automatically credentialed with many vision insurances, including Eyemed, Spectera, Davis, and AETNA, etc. It takes a week or two to get credentialed with these vision insurances.
Dr. AuYeung also recommends that you sign up for medical insurances, but you will need to do that on your own or go through a billing and credentialing company. Here at NewGradOptometry we highly recommend Optometric Billing Consultants for credentialing as they’ve helped tons of new grads get credentialed without the headache.
You’ll be medically credentialed through Lux with Aetna, but with BCBS and United, etc., you’ll need to sign up separately. The doctors point out that sublease holders have the freedom to sign up with pretty much all insurances, but to be aware that the optical side might not accept some of them. So it’s important to think of that when signing up for credentialing.
7. Corporate optometry practice has evolved quite a bit over the years.
Some people hear “corporate” and automatically assume that you’ll only be refracting, being forced to only examine patients for glasses, and seeing tons of patients each day. But a sublease is different; you get to provide the type of care you want to give. Dr. Lam reports that she can take whatever time is needed to provide good care. Times are changing, and corporate practices are changing along with them.
The doctors point out that this role is ideal for people who like practicing medically and doing their own diagnostic testing.
Dr. Lam recalls a job she had early in her career, working in private practice. Her boss was annoyed that she didn’t prescribe patients enough pairs of glasses and make enough sales for the clinic. But Dr. Lam went to school to become an eye doctor, not a salesperson. She chose to pursue her Luxottica sublease in order to focus on her patients, not worry about sales goals for optical. She maintains that, for someone who wants to practice optometry, corporate subleases are the ideal gig.
8. Schedules will vary per location.
The doctors reveal that sublease holders can play around with their schedules a bit. You might think that one schedule will work, only to learn several months later that you should change your hours to accommodate patient needs.
Dr. AuYeung reports that his schedule is still changing. Both doctors explain that Target Optical presents the hours that work with the store’s guests, and ask that you keep the practice open during peak hours, which are typically Fridays and Saturdays. But if you don’t get many patients on a Tuesday, there’s no rule saying you have to be open that day. It is a good idea to keep it consistent once you find the right schedule since you do not want to confuse your patients.
9. You can still take vacations as a Target Optical sublease holder.
The doctors point out that nobody can work 7 days a week.
A single sublease holder will definitely need consistent relief coverage if they choose to keep the practice open 7 days/week, although, to be clear, in most Target Optical leases 7 days is not required.
Some Target optical sublease holders choose to work with an associate optometrist or a fill-in on those days, then call the same person for vacation coverage when they plan a vacation.
The doctors also point out that a dual-doctor arrangement works well for one full time and one part time OD. There could be a Saturday rotation, or any other arrangement. They maintain that, as long as the Target Optical has coverage, corporate don’t care how many, or how few, doctors are working there. As long as patients are feeling valued, your Target Optical partners are flexible.
10. Working at Target Optical is half the fun.
Dr. AuYeung chose to work for Target because he enjoys the environment and the culture. He feels that Target is straightforward, values quality and cleanliness, and does not try to trick customers into making unnecessary purchases by playing certain types of music. He points out that Target calls shoppers “guests,” rather than “customers.” This resonates with Dr. AuYeung, who values authenticity and a patient-first approach to eyecare.
And who doesn’t want to shop at Target on their lunch break? You get 10% discount as a Target Sublease holder too!
11. Income potential at Target Optical is very high.
- If you keep your practice open for 6 days per week and see 14 patients per day, both doctors agree that it’s possible to hit the 200k+ annual income level.
If you do have an associate OD come in for fill-in days, you can negotiate those rates with him/her, as well as what percentage of professional fees they would keep. They both agree that the low overhead at Target Optical helps provide doctors with a higher bottom line.
12. Both doctors unequivocally recommend signing a Target Optical sublease.
They point out that it’s quite easy to find a balance between freedom to practice and staying between Target’s corporate rules, because those rules don’t really affect patient care or how they run their practices. They agree that you have great independence, support with marketing (without sacrificing your control of it), can set your own professional fees, and can bring back whomever you want for followups and additional testing.
One thing to keep in mind is that you don’t make any money off the optical sales side. This is the price you pay for having zero pressure to sell and enjoying the opportunity to focus solely on patient care. As a doctor, you keep your professional fees, contact lens fitting fees, retinal photos, and consultation fees, though.
They also point out that two doctors can share a sublease if, for example, both only want to work 3 days per week. Target and Luxottica set no restrictions on partnerships, and all they really care about is that you’re open during the hours you say you will be open.
The doctors agree that Target overhead is low, is a great low-risk way to try out entrepreneurial skills. Dr. Lam feels that the best two things are the freedom to practice how you want and the high income returns.
Looking ahead, if you’re interested in your own Target Optical sublease, the doctors agree that you should act as quickly as possible. Target Optical will be adding more and more locations to existing Target stores, but once they’re all taken, they won’t likely become available again. People tend to stay at their subleases until they retire because it’s such a good gig!