Make sure your business is worth selling
We frequently consult with practitioners on exit strategies from their businesses. The most common theme that we see is that the practitioner-owner has pulled out every last dollar from the business and when it comes time to exit they are left with a business that isn’t worth very much. At that point, it makes more sense to unwind the business rather than try and sell it.
When consulting these individuals on building value into their business prior to exiting, we often discuss moving some income into investments for the business (i.e. savings, money market, portfolios, joint ventures, ownership in subsidiary companies, etc.) We try to instill that these are strategies that need to be implemented well before that moment of exit so that when it does come time to sell the net worth of the business is substantial enough for someone to take a second look at.
On the list of investments provided above, I left out Real Estate. Here is a recent post on the idea that Real Estate may be the most valuable item on the books.
In any small business, including running a physician’s office, the most valuable piece of your business is the real estate. Most people have heard the McDonald’s story of founder Ray Kroc, who believed that the most valuable aspect of McDonald’s was the real estate underneath each restaurant. For small business owners including physicians, getting a piece of the dirt underneath their business is essential.