Ricky Allen talks exit planning and how to position your practice into a saleable, profitable business when it’s time to retire.
After reading the heading, you will probably say to yourself, of course I have a viable business – I pay taxes and employ staff! Unfortunately, that does not mean you have a viable business. Some of you will find this out when it is time for you to retire and you try to sell your business and are unsuccessful.
Every few weeks I have a doctor contacting me asking for help selling his or her business. When I look into it, there is very little to sell.
It is important to start off the right way, which means that you build a business from day one with yourself – your wife or husband should be superfluous to the actual business structure, otherwise your business will not appear viable when you and your spouse leave it. In fact, you should perhaps go even further by setting up your business like a franchise model. The extra benefit is that you may ultimately decide to open other branches or even offer franchise packages one day. You can do this without much extra work as you have been set up and running that way. An extra benefit is that you are also creating a much more attractive long-term sales package to someone looking to purchase.
If you have the opportunity to purchase rather than rent a premise, do it. Owning the property means you have a much more attractive business to offer on many different levels and over time rents add up to much more than the price of the property.
Make a business plan and continue to update this every year as you continue to grow. You need to modify this plan based on any changes during the year that have reflected on the financials. This should be based on a holistic business, which means a business within a business, based on the concept of aesthetics.
EXPAND TO COMPLEMENTARY SERVICES
Your business plan should also take into account that if a client comes to your facility for one thing then they may as well come for three or four – and they will, if on offer. There are many like-minded people who you can bring in – naturopaths, nurses, makeup artists, nutritionalists, beauty therapists, etc. The important thing when choosing who to bring on board is that they will provide an extra patient and revenue stream and meet extra needs of the clients. They must not be competitive with any other specialist in the facility otherwise you end up with problems which can destroy the harmony of a business.
Take your time picking these other clinicians because if you choose well, one day they may want to buy the business from you, or even manage it so that you still keep an income stream.
Make sure that all other clinicians and axillary employees carry their own insurance and registrations. You need to keep copies of these at your business. Contracts for all consultants or employees need to be written by a lawyer to ensure that they offer you a high degree of protection.
STREAMLINE PROTOCOLS AND DATA CAPTURE
Make sure you have written protocols for every treatment you offer as well as other relevant business areas such as customer service and problem solving. A protocol for infection control should also be included and updated based on any problems which may occur, for example. When you take on new staff members, having these protocols makes educating them so much easier. These protocols also make your insurer look more favourably on your business. This, of course, also translates to cost savings for you.
Your computer should be set up to keep records of all interactions which occur, such as product sales, treatments undertaken, number of enquiries and the number converted, as well as all relevant client data such as address and how they were acquired (word of mouth, social media, advertising, etc). These statistics should be downloaded weekly.
This research data is vital in allowing you to continue to develop appropriate business as well as marketing plans. These figures will also form part of your package when you go to sell or open other branches or franchises. They should even tell you which days and times were the most productive so that you may then decide to extend your opening hours on those specific days.
MARKETING PLANS MATTER
When putting together your marketing plan, make sure you include marketing the consultants and their services as well. This plan needs to be based on the results of your statistics, which allows you to modify your marketing plan based on what has proven successful rather than hoping that activities have worked.
When you buy any new equipment, ensure you have decided on a marketing plan which will deliver the numbers as soon as the equipment is delivered. It is a little too late when the equipment is there and you are then scrambling for patients to use it on. If you implement a successful plan, you should be able to pay off that equipment within months.
STAFF: THE BACKBONE OF YOUR BUSINESS
Building a loyal and professional team of support staff requires a separate plan as they are the backbone of any business. Offering ongoing education, economic incentive packages and recognition activities are just three of the areas which this plan needs to focus on to ensure success. This is so important as it takes a minimum of six months for any new staff member to become an economic asset. Retaining staff also shows a well-run business and gives confidence to any buyer that the business will continue to flourish.
As a business module is not offered in your medical degree, it is not easy to suddenly have to become an expert. With careful planning and the ability to constantly make changes based on knowledge derived from keeping good statistics and continuing to educate yourself business-wise, your business will not only be viable but will flourish and grow and give you great financial security when you finally decide to retire. AMP
Ricky Allen is available for business development consulting. Call 0412 700 720 or email rickyall@tpg.com.au
