An Australian optometry practice is typically worth between 40% and 70% of its annual gross revenue, or 2–4x EBITDA — but the real number depends on how dependent the practice is on you personally, how well the retail side runs, and who’s buying. Two practices billing the same $1 million a year can be worth dramatically different amounts, and the difference has almost nothing to do with revenue.
If you’ve spent fifteen years building a practice and you’re starting to think about what it’s actually worth, this is how the number gets made.
The Two Valuation Methods That Matter
No single formula applies to every optometry practice, but every credible buyer will use one of two approaches — and usually cross-check with the other.
Revenue-based valuation. The simpler method: take your average annual gross fees over three years and apply a percentage. For most Australian independent optometry practices, that sits between 40% and 70%. A practice billing $1.2 million at 55% produces a valuation of $660,000. The percentage is driven by profitability — strong margins push toward 70%, a practice with bloated wages or heavy bulk billing gets closer to 40%. This method is common for smaller single-operator practices where EBITDA can be volatile year to year.
EBITDA multiple. More common for larger practices and institutional buyers. Take your adjusted EBITDA — earnings after normalising the owner’s wage to market rate (around $120,000–$130,000 for a full-time clinical role in Australia) — and multiply by 2–4x. A practice generating $220,000 of adjusted EBITDA might be valued anywhere from $440,000 to $880,000 depending on who’s buying and what they see in the business.
Both methods should produce broadly similar answers. If they don’t, there’s usually a revenue-quality issue: heavy bulk billing inflating gross fees without corresponding profit, or exceptional one-off retail revenue that’s not repeatable.
Rule of thumb: a typical independent Australian optometry practice billing $800K–$1.2M in a suburban location, with one or two practitioners and normal retail conversion, should be worth somewhere between $350,000 and $750,000. The spread is that wide because transferability matters as much as profitability.
How Adjusted Net Profit Is Actually Calculated
This is where valuations get misunderstood — and where money gets left on the table if you’re not prepared.
The profit figure on your tax return is almost never the right starting point. A buyer who knows what they’re doing will reconstruct your P&L from scratch, adding back your personal expenses run through the practice, the excess above a market-rate salary, depreciation on equipment, and one-off costs that won’t recur. Then they’ll subtract anything that doesn’t transfer — income tied to relationships that leave with you, or below-market rent if you own your premises.
The EBITDA add-backs process is worth understanding in detail before you approach a buyer. The difference between a sloppy add-back and a well-documented one can shift the valuation by six figures.
I worked with an optometrist in regional WA a few years back who’d been paying himself $270,000 in salary and distributions. His P&L showed $45,000 in net profit. A naive buyer would have written the practice off as barely viable. Reconstructed properly — add back the excess above market wages, add back depreciation, remove the dual-cab ute and the Bali conference — adjusted EBITDA came out at $195,000. The practice sold for $590,000. The difference between those two numbers started with the quality of the add-back work.
What Actually Drives Value in an Australian Practice
Retail conversion rate. The single biggest lever in optometry. A practice billing $1M with 45–55% of revenue from frames and lenses is a fundamentally different asset from one where optical retail represents 10%. Buyers model this carefully — strong frame sales aren’t just better margins, they’re evidence of patient engagement and relationship depth that doesn’t walk out the door when you do. The healthy benchmark for an independent practice in Australia is 45–55% retail revenue; below 30% raises questions.
Patient base transferability. Optometry has the same problem as most professional practices: how much of the revenue comes to see you, rather than the practice? Practices with an established associate optometrist — patients who already rotate between two or three practitioners — transfer more cleanly than single-principal operations where every patient booked in specifically to see the owner. This is probably the most expensive aspect of optometry practice sales that owners underestimate (which is understandable, because you’ve spent years building those relationships and it doesn’t feel like a problem until it is).
Associate optometrists and staffing structure. A practice where the principal handles 100% of consults is worth less than one where a salaried or contractor optometrist does 40% of the book — not because of volume, but because of risk. Every session in the diary that isn’t dependent on you personally is a session a buyer can count on after settlement.
Lease terms. Buyers want at least five years remaining, ideally with a further option. A practice sitting in the last eighteen months of a lease, with an ambiguous renewal, is a problem. Sort your landlord situation out before you go to market — it’s a simple fix that has an outsized impact on buyer confidence.
Equipment age and condition. Buyers will take a clinical inventory: frame boards, OCT, auto-refractor, phoropter, slit lamp. Equipment written down to zero but still functional is usually fine. Equipment that clearly needs replacement creates a negotiation point. Know your kit and have a rough replacement cost ready — it removes uncertainty from the conversation.
The Medicare and Bulk Billing Factor
This is a specifically Australian wrinkle that most generic valuation guides miss entirely. A high bulk-billing rate creates a structural ceiling on your revenue per consult. The Medicare rebate for a standard eye examination (item 10914) runs around $59. If you bulk bill and charge nothing on top, that’s your total revenue per consult. A practice charging an out-of-pocket fee on top of the rebate can double the per-consult revenue without seeing more patients.
A practice with 80% bulk billing and $900,000 in gross revenue reads very differently to one with 30% bulk billing and the same gross. The first has limited pricing power and likely faces downward pressure as Medicare rebates fail to keep pace with costs. Buyers understand this, and the multiple adjusts accordingly.
This doesn’t make a high-bulk-billing practice unsellable — plenty sell perfectly well. It means you need to understand how it affects your valuation range, particularly if you’ve been competing on access or price in a high-competition area.
Who’s Actually Buying Australian Optometry Practices
The buyer landscape in Australia is more segmented than most owners realise, and different buyers price practices very differently.
Independent operators — typically other optometrists buying their first or second practice. They use a revenue-percentage approach and are price-sensitive. They’re often your most likely buyer for a single-site practice, and the best chance at a clean transition where goodwill is genuinely preserved.
National optical chains (Specsavers, OPSM/Luxottica, Bupa Optical) — occasionally acquire independent practices, particularly in locations they want to enter or strengthen. They price through their own commercial lens: what does this site generate in retail revenue, and what’s the location worth to us? They can pay above an independent buyer for the right premises. They’ll rebrand quickly.
PE-backed consolidators and allied health aggregators — a growing presence in the Australian healthcare space over the past several years. They typically target multi-practitioner practices with $2M+ in gross revenue at 3–5x EBITDA. Below that scale, you’re probably not on their shortlist — but above it, understanding how they value growth potential is worth doing before you enter any conversation.
ProVision and buying group networks — function more as practice support and referral ecosystems than direct buyers, but they can facilitate introductions to acquirers within the network and may offer tools like the ProVision practice value calculator as a starting reference point.
If you want to understand which category of buyer is most likely to be interested in your practice — and what that means for price expectations — get in touch with us directly.
What to Have Ready Before You Start
Any serious buyer will ask for the same core documents: three years of financial statements, a schedule of add-backs and adjustments, a staff register with role descriptions and salary costs, your Medicare billing history (frequently requested by allied health buyers), your lease with any options noted, and a list of major equipment with approximate ages.
The full documentation checklist for business valuation is worth reading before you approach anyone. Practices that come to market with this material already prepared move faster and attract better prices — because buyers spend their time evaluating the business rather than reconstructing the basics.
Preparing your practice for sale properly takes longer than most owners expect. Twelve to eighteen months is realistic if you want to address the things that affect value — practitioner dependency, retail systems, lease renewal. Six months is possible but you’ll be negotiating from a weaker position.
Thinking about selling in the next few years? Use our valuation calculator to get a rough estimate of what your practice might be worth, or contact us to have a proper conversation about your specific situation and what a realistic exit looks like.