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Are all businesses sellable?

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summer_ceo

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May 6, 2018
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I've owned a business for the last several years (professional-healthcare). In the last 2 years we've doubled in size and revenue. Being a professional, I had no prior business experience and this was my first business venture and am just learning as I go. I had met with a lawyer a while back who had told me that my business was not sellable because it was a business that relied solely on me and my credentials and that if I were to sell the business I would only be selling a few computers, etc. With that in mind, I measured the success of our business by how much profits we were bringing in each year. I've learned over the last few years that this advice is likely wrong, but I feel as if I need to have a better idea of the end goal in order to determine my strategy for the business. I am planning on a 2.5 year exit from the business either way.

If we are not likely to sell our business, then I will continue structuring my business as entirely owner involved because I bring in the most money to this business. And I know that once I am done with the business, it will just close and whatever money we will have is whatever profits we made over the years.

However, if we are growing our business with the intention of selling it then I will focus my efforts on removing myself from the business, taking less profits, and directing all my energy to growing the business and making it more profitable in the future so that most of our profits wil then come from the sale of the business.

How do you determine which strategy is most important? I am not sure who would buy our business and whether we even have enough to offer to make it attractive to potential buyers anyway.
 

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Gunther Herzog

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Apr 22, 2018
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Dear Summer_CEO, first I welcome you to the legendary Fastlane forum. I would love to hear more about your story, please Introduce yourself here.

No - not all businesses are sellable.
(As you already stated, if you are the hole business, then you can not sell it without you. In other words: You have to extract yourself completly from the business.)

How do you determine which strategy is most important?
Do you want to hit the fastlane?
Well do the T of the (C-E-N-T-S) strategy.
You want to cut your time from the succsess of your busines anyway, if you decide to keep it or if you sell it.
 

Scot

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My day job is in the healthcare space, so I’ve been around a lot of single doctor practices, group practices and corporate practices. (I’m assuming you’re either a MD, DC, Debtist, Psych or DVM)

So, your lawyer is correct, in a sense. Right now, today, your business is not sellable. At least in the way you want to sell it.

You’re no stranger to the fact that corporate medical groups are buying up single practitioners and rolling them into their umbrella. If you stay on the practice, you get that benefit of a modest buyout with assistance in the form of cheaper software and overhead.

But, to sell outright, yeah, there’s no business if you aren’t there.

There’s good news! You want to exit in 2 ish years. You’ve got time.

First suggestion, get the book Built to Sell. This book will give you a lot of actionable advice. Next, read the book The E-Myth.

What you need to do to sell:
  • Remove yourself from the business.
  • Hire other practitioners to carry the patient load. Most practices, part of the asset sale is “community good will” So, if 50% of the patient’s are loyal to Dr @summer_ceo , then you lose 50% of your sale price.
  • Potentially get a second or third location, that is self sufficient, not a satellite office.
Hope that helps. Read those two books. And stick around here a bit.
 

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