Greg Edwards, Founder & CEO of Onsight Healthcare, shares his entrepreneurial journey from sales to building a healthcare business. Joined by Jim Cumbee, an experienced M&A advisor, they discuss the crucial roles of sellers and brokers in the business sale process. Topics include the importance of adaptability in small business, navigating post-pandemic challenges, and how personal engagement can enhance business relationships. They also explore strategies for maximizing business value and the nuances of evaluating potential buyers.
Sellers often face emotional and practical challenges during the selling process, especially if they are first-time sellers unprepared for complexities.
Business brokers play a crucial role in ensuring a smooth selling experience, impacting everything from valuation to emotional support throughout the process.
Successful selling requires patience, as the business sales journey can extend over nine months or more while aligning strategies with potential buyers.
Deep dives
Understanding the Seller's Perspective
Sellers often grapple with the emotional and practical aspects of selling their businesses. As highlighted in the discussion, many are first-time sellers who may not be fully prepared for the complexities involved in the selling process. Advisors like brokers play a crucial role in guiding sellers through this journey, helping them understand their business's valuation and the right time to go to market. The emotional toll can be significant as owners navigate through various ups and downs during the sale.
The Role of Business Brokers
Business brokers serve as vital intermediaries between sellers and potential buyers, facilitating the sale process. They can help sellers demonstrate their commitment to selling while also filtering out casual inquiries. The quality of the broker can significantly impact the selling experience, as not all brokers have the same level of insight or commitment to the process. A good broker not only assists with valuations but also prepares sellers for the emotional aspects of selling a business.
The Journey of Selling a Business
Selling a business is often a lengthy process that can take anywhere from nine months to over a year. This timeframe allows sellers to prepare their business for sale and aligns their strategies with potential buyers. The interview process involves multiple stages, from assessing the business's valuation to defining a target buyer. Sellers need to be patient, as the process can be complex and may require adjustments based on market conditions.
Adapting in a Changing Market
Businesses must remain adaptable to survive and thrive, especially when facing unexpected challenges like a pandemic. For instance, one entrepreneur successfully pivoted from a valet service to providing COVID screening services to hospitals, showcasing the importance of flexibility. These adaptations not only sustain cash flow during downturns but also open new revenue streams. By identifying and responding to evolving market needs, small businesses can demonstrate resilience and maintain profitability.
Valuation and Sale Considerations
When contemplating the sale of a business, sellers must focus on the key metrics that potential buyers will evaluate, such as profitability and growth potential. Maintaining good relationships with clients and demonstrating a consistent revenue model are essential in enhancing business value. Strategic and financial buyers consider different aspects, including the synergies they might achieve. Ultimately, understanding these dynamics allows sellers to position their business effectively in the market.
In discussions of the entrepreneurship through acquisition journey, our attention is often drawn to the experiences of the searchers, those looking to acquire an enduringly profitable small business. However, two other crucial perspectives to consider are those of the sellers and of the brokers who they have partnered with to help sell their companies. In this episode, we meet Greg Edwards, Founder & CEO of Onsight Healthcare, and Jim Cumbee, a deeply experienced M&A advisor to business owners and Managing Director of Tennessee Valley Group. Greg has retained Jim’s firm to advise him on selling Onsight Healthcare, potentially to a searcher. Hearing their respective positions, thought processes, and insights can help acquisition entrepreneurs to not only better frame their offers but to approach the ecosystem and their transactions within it in a more thoughtful way.
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