00:00:04:09 – 00:00:55:18
Jay Shorr
Welcome to Shorr Solutions: The Podcast. I’m your host, Jay Shorr. I’m the CEO and founder of Shorr Solutions, a national and award-winning consulting firm, assisting aesthetic and surgical practices with their operational, administrative and financial success. I have an amazing team of practice management experts and clients across the U.S. and as an industry expert with firsthand experience owning a multi-million-dollar cosmetic dermatology and plastic surgery practice. Listen in as I lend you my expertise and best tips to successfully manage and grow your aesthetic practice. I will also be bringing in guests along the way, so get ready to be equipped to operate your aesthetic practice strategically and profitably.
Welcome to Shorr Solutions: The Podcast.
00:00:55:22 – 00:02:32:09
Welcome to another episode of Shorr Solutions: The Podcast. And I’m your host, Jay Shorr. Today we’re going to speak about something that everybody and I mean everybody young and on the mature side, ask me each and every day, even when they’re ready to start to open their practice. And the question is, when and how do I start the process of my exit strategy?
Well, the answer is it’s never too early to start creating your exit strategy, and you should really think about what your long-term goals are from the moment you open your business. And if you’ve been in business and you’re more on the mature side chronologically age like myself, it becomes ever-pressing each and every day more than it was before. Or because we wonder, what do I want to do with my business? Do I want to retire and sell it? Do I want to retire and bring on a partner and sell it? That way? Or even do I want to will it to family members? Well, quite frankly, when should all of this happen? One year from your exit date. Five years from your exit date. Seven years from your exit. They know it really should start right now because you never know what compelling events might happen in your life that may force you to accelerate this even sooner than you had thought. And at least now you have somewhat of your ducks in a row.
00:02:32:11 – 00:03:25:19
So who and what do you need in order to make this happen? Well, on your team, naturally, you should have a good attorney or a lawyer. You need to have a good accountant that understands the nuances of health care and a medical business. And you need to have a recruiter of some type of a sort to help you to find that buyer. Naturally, you need a great consultant like us because we understand all of the nuances in opening a business, running a business, and planning your succession strategy and your exit plan. So a good consultant will help you along the way. And equally as important, whether it is your accountant or your lawyer or your consultant, you need a great appraiser. And the reason that you need a great appraiser is to show the actual value of your business.
00:03:25:21 – 00:04:16:10
So where do I look for a buyer? Well, many times it could be from a referral from a current colleague of yours or an industry professional, whether it’s laser sales reps or your neuromodulators and fillers, their reps, a consultant, different conferences you meet, contact relevant societies.
Most of you are already they belong to a society American society of this or through your board. American board of this industry-related recruiters and consultants. And like I said, conferences. We speak at a dozen or more conferences in any given year, and we have to let the people around, you know, that you even have an interest in trying to sell your practice exit or have some type of a session plan.
00:04:16:12 – 00:05:44:17
Yes. We’re going to take a quick break and a slight intermission. I’d like to take a moment to tell you about our conversion cascade online course. With this self-guided and powerful course, you and your team will be able to master acquiring and retaining more patients as a step-by-step sales funnel training. This course is designed to help you and your team attract more patients, convert calls to consults, convert consoles to treatments and procedures, and keep patients coming back for more.
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00:05:44:19 – 00:06:21:03
So what do I look for in a buyer? Well, I want to make sure that the buyer is going to pass what we call the sniff test. What does that really mean? Well, you want to know that they have the financial eligibility to either borrow money, get funded if you’re not willing to self-fund it, to ensure that they have enough money to buy your practice, and the doctors that are going to operate in your practice after you leave have state licenses and the state license needs to be unencumbered, unrestricted, and unexpired.
You also want to ensure that they have a great national practitioner databank profile. What’s their reputation in the community? Because if you’re going to still stay around and there’s a thing called an earn-out, we’ll get into that. In another lecture. You want to make sure that they have a good reputation in the community so that they maintain profitability today, tomorrow and throughout the years.
And also, you want to know that they’re able to get local hospital privileges or privileges at a surgery center, especially if you have an in-house surgery center or an office-based surgery center. Will they be able to get privileges? Look at their resume, and carefully scrutinize it.
Look at the preferred languages. If you’re in a predominantly domestic area, for example, I’m here in South Florida or very heavy Latino communities. So preference of language would be French. No. Spanish. No. English, no. All of the above. Why? Because there’s also a big Haitian community. Whether it’s Kreyol, whether it’s French, it’s French Canadian down here in South Florida so, whatever it is, look for those that have the ability to speak multiple languages.
And does it align with your values? Why does somebody want to purchase your practice? Do they have, references? What do the previous employers or colleagues’ patients say about these people? Because that’s going to be very important when you sell. And what is their experience and education?
00:08:00:02 – 00:10:21:18
Have a third party, whether it is an appraisal, an attorney, an accountant or someone like us. Evaluate your assets and your liabilities because you want to put together a prospectus any time that we’re representing a client to sell their practice. We have our business analyst, client success manager and myself create a prospectus similar to that. If you were buying a stock. We want to know assets, liabilities, capital, equipment, PNL profits, losses, balance sheets. You want to go over all of that? So if you need an evaluation or a valuation, you want to measure assets and liabilities.
Quite simply, what are assets and what are liabilities? Assets are what you own. Assets are what is owed to you, while liabilities is debt service what you owe and any contingencies of debt of the future. So which assets come with the sale? Well, it depends on whether or not you have an asset purchase agreement or a stock sale. A stock sale is everything in your business, whereas an asset sale are only those defined assets that you list tangible assets. They may have some intangible assets, but tangible assets, capital equipment, filler, a website, all those types of things. And what are the current liabilities such as your financial debt and any potential malpractice case?
Very, very important that you measure assets, liabilities. Create a great balance sheet and figure out the actual cash value versus a current market value. So what’s the difference? An actual cash value can be different than the market value. The actual cash value might be a sum of all of the parts that equal the whole, meaning I have X amount of dollars worth of physical equipment and that’s what is value is versus what will the market bear? Real estate is a perfect example of that. If the market is saying that the business or your house is worth X amount of dollars, but that’s not what you have into it. Take the higher of the two.
00:10:21:20 – 00:11:14:14
And lastly, should I tell my staff and when do I tell my staff? Only give them the information that they need to know on an as-needed basis. Because believe me when I tell you, they’re going to find out soon enough. But make them part of the process so that they don’t feel once again, so that they don’t feel that they’re going to get eliminated. Because many times a buyer doesn’t want to come in and terminate your people. They want to buy a well-oiled machine. Ladies and gentlemen, thank you for sharing part of your day with me on Shorr Solutions: The Podcast to discuss when and how do I start the process of my exit strategy. We look forward to you in another episode. Episode number 108 coming up. Good luck and God bless.
00:11:14:16 – 00:12:47:16
So that wraps up today’s episode of Shorr Solutions: The podcast. If we mentioned any website links, you can find them in our show notes to work directly with me and our award-winning team of consultants to increase efficiency, increase revenue and decrease costs in your aesthetic practice, schedule a free consult with us today.
We will help you establish and refine your aesthetic practice’s protocols for maximum efficiency and productivity, decrease your expenses and increase your profitability with an expert financial analysis of your business. Attract more patients, convert calls to consults, convert consults to treatments and keep patients coming back for more. With our sales training, coaching and complimentary access to our conversion cascade online course.
Recruit, hire and train new team members and manage any staff turnover with our human resource expertise plus more, head over to our show notes and click on the link to schedule a free 30-minute consult with us today.
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