How to plan your exit strategy
Suzie Hoitink, ex-director of Clear Complexion Clinics, shares her biggest learnings from selling to an ASX-listed company.
When we finally sold Clear Complexions Clinics to ASX listed Vita Group Pty Ltd, I reflected that we could have been better prepared for the exit. That’s not to say we weren’t happy with the outcome (we were), but after going through a full year of arduous due diligence with a team of consultants, I realised there was so much more we could have done over the 13 years.
It’s fair to say these are difficult times, but the truth is that there are always challenges that crop up and if you’re not able to recognise, respond and build resilience, you won’t survive, let alone thrive.
The business of health is changing. Its commercialising, commoditising and becoming increasingly competitive and those who aren’t ready and able to step up will find themselves wondering why it seems so difficult.
Running a business in the confines of the healthcare industry does add a level of complexity – but therein lies the gold. It’s a thriving industry and with COVID-19 altering the way we value our health, there are opportunities for those who can set their practice up for success.
Systems That Sell
It was primarily our systems that attracted our buyer. I don’t have an MBA, but I know how to set up a ‘selling system’ in the healthcare industry. Having to ‘sell’ or promote your services in health is not only fraught with compliance issues, it’s viewed as unethical and distasteful. Make no mistake, though: you and your entire team are providing services for which the patient is paying. Complying with your Hippocratic responsibilities whilst still competing for patients is a delicate balance but one that can be successfully navigated with the right expertise, giving you an advantageous competitive edge.
I realise my use of the word ‘sell’ is uncomfortable. Let me clarify: At no point am I advocating selling a service or product to a patient that they do not need. What I’m referring to is building a framework for your nurses, doctors and administrative team to promote your services ethically, with full accountability and transparency, delivering on your promises to your patients every time. It is a collaborative consultative system encompassing consultation, treatment planning and reviews that increases patient frequency, spend and satisfaction, as well as delivering consistent treatment results.
The consultative system is auditable and therein lies the gold. You, your practice manager or your leadership team can see if a client missed a step in the process and can then ascertain whether this is a ‘skill or will’ issue with the treating nurse or doctor and performance improve as appropriate within your performance management plan. It’s how you develop a high-performing team.
Measuring What Matters
The central nervous system of every business regardless of industry is the data. It provides insight into the health of your practice and the intelligence from which strategy should stem. IT systems obviously vary, but what is crucial is that you are collecting the right kind of data that feeds into specific metrics.
Metrics are the levers you can pull to improve performance. Metrics vary depending on type of practice and strategy, but close analysis of the basics such as average sale value (ASV), frequency of visits (FOV) and patient retention value (PRV) will quickly reveal where there is complacency in the practice and where there is opportunity.
Your practice’s viability depends on appropriate staff utilisation. Simple metrics such as revenue per staff member, productivity per hour and conversions will also indicate any skill or will issues that can be nipped in the bud.
My advice with metrics is to make them simple and specific. What can be monitored and measured can be managed to allow for adaptation and growth in your business. If ‘reading’ your business like this isn’t your strength, get some external help. It’s invaluable intelligence, especially in disruptive times.
Execute Your Exit
Lastly, I’d prompt you to investigate your purpose. That sounds heavy. What I mean is, what is your purpose or plan for your business’s future? For me, it was an exit. I knew the company would be sold at some stage. Could we have prepared for it better? Probably. The wisdom of hindsight is a gift, but knowing the plan was a sale pointed us in a certain direction. As you turn up to your practice or surgery, ask yourself if you are working on your business today or just in it, then ask yourself why. If it is to service your patients and then retire, that’s fine. If it’s to build a saleable asset to attract a buyer then are you preparing for that?
Challenging times like the ones we find ourselves in give us opportunity to pause, re-evaluate and redefine what matters. Competition ignites us to be stronger, smarter and clearer on our strategies and their execution. If the business aspect of your practice isn’t your strength, help is out there as they say, so stay in your lane and do what you do best but bring in the expertise. In these turbulent times complacency is a folly. AMP
|Suzie Hoitink RN MACN, Director and Senior Consultant at HTNK Consulting. Suzie and her husband Alex work with healthcare clients through HTNK Consulting and with Hanya Oversby and the incredible team of experts at Health Business Networks. They have two adult daughters and split their time between Australia and Mamasa, their island in Vanuatu.|