Wealth Formula by Buck Joffrey 507: How to Sell Your Business or Practice
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May 18, 2025 Saul Cohen, a UK-based accountant and acquisitions advisor, shares invaluable insights on selling businesses and practices. He highlights the importance of planning exit strategies, even for small businesses, to maximize sale prices. The discussion covers the distinction between lifestyle and saleable businesses, emphasizing how branding and scalability affect valuation. Saul explains EBITDA as a key metric for business valuation and outlines strategic considerations for healthcare professionals looking to sell, including the need for strong contracts and thorough preparation.
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Make Practice Replaceable
- Do not make your practice about yourself alone; brand it independently to increase saleability.
- You become replaceable by hiring multiple professionals, making the business attractive for buyers.
Value = Cash Flow x Risk Multiple
- Business value depends on cash flow multiplied by risk-related multiples.
- Buyers pay less if they doubt future cash flow because of risk, illustrated by lower multiples for owner-managed businesses.
Prioritize Contracts and Accounting
- Ensure excellent contracts with staff and maintain high-quality, current accounting records to improve value.
- Conduct regular due diligence and fix red-flag issues years ahead to raise sale price potential.