The hosts delve into a confusing blend of urgent care and med spa services in Orange County. They discuss the $8M asking price, scrutinizing the financials and potential growth tied to the adult industry. The conversation highlights the shift from a traditional urgent care model to a med spa focus, raising questions about service breadth. Additionally, they explore the hurdles investors face in medical facilities, emphasizing the discrepancies in valuations and the challenges of overpriced listings. It all ends on a humorous note with quirky business alternatives.
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insights INSIGHT
Over-diversification Confuses Customers
The hybrid urgent care and med spa business is overly diversified, combining many unrelated services under one roof.
This lack of a clear dominant service confuses customers and diminishes the value of the cash flow.
volunteer_activism ADVICE
Adjust Cash Flow Realistically
Avoid paying an excessive multiple on cash flow, especially when professional salary replacements and depreciation are not factored in.
Properly adjust cash flow by deducting reasonable salaries and expenses to assess true profitability.
volunteer_activism ADVICE
Consider Salary and Depreciation Adjustments
When evaluating medical businesses, adjust for owner’s salary and depreciation to avoid inflated earnings claims.
Understand that SDE sometimes equals EBITDA only if depreciation and replacement salaries are accounted for.
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In this episode, the hosts break down an overpriced, confusingly diversified urgent care and med spa hybrid in Orange County, exploring why it's unlikely to trade at the asking price.
Business Listing – https://www.bizbuysell.com/Business-Opportunity/urgent-care-for-kids-and-adults-full-service-plus-med-spa-3405-sqft/2323118/
Welcome to Acquisitions Anonymous – the #1 podcast for small business M&A. Every week, we break down businesses for sale and talk about buying, operating, and growing them.
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The hosts dive into a peculiar $8M listing for a hybrid urgent care and med spa based in South Orange County, California. Pulling in $3.5M in gross revenue with $1.5M in seller’s discretionary earnings, the business claims to offer everything from urgent care and COVID testing
Key Highlights: - $3.5M revenue, $1.5M SDE, asking $8M (5x+ multiple) - Located in affluent South Orange County, CA - Services range from urgent care to med spa and STD testing - Owner is “very semi-absentee” and willing to stay on - Hosts question valuation, mixed identity, and transaction viability
Acquisitions Anonymous - #1 for business buying, selling and operating