Prior to 1990, owning a business was not my career objective. A seed, however, was planted mid-way through my master's degree program at the University of Akron. During a summer business class under the tutelage of Sharon Lesner, PhD, a budding desire to do things my way and be an independent professional began to blossom. Dividing us into small groups, Dr. Lesner tasked us with creating a mock business plan. I still have my assignment on my bookshelf to this day: Akron Hearing and Hearing Aid Service. In hindsight, this was my first step toward my ultimate goal of owning my own business.
In February 1996, I opened my own audiology practice, kicking off a nearly 20-year adventure of running the practice, plus three more subsequent to its sale, working for its next owners. In personal terms, next to raising my sons, owning a business was my life's most significant avenue for learning and growth, having expanded the practice from a small, part-time office to three and a half offices in four nearby cities. The business was the professional home to amazing audiologists, audiology assistants, administrative assistants, savvy billing individuals, front office personnel with a true passion for providing care, and those who marketed the practice to area physicians. Suffice it to say that my practice could never have succeeded without the contributions of such a team. That's why it warms my heart to know that a handful remain in those offices, now under new ownership, still making the world a better place, one patient at a time.
UNEXPECTED CHALLENGES IN SELLING A PRACTICE
As with all business owners, one of the reasons for creating my own business was to eventually sell it. The actual process, however, proved both daunting and emotional, given the sense that I was somehow “selling my child.” In October 2012, my practice sold profitably and was well positioned, many thanks to the outside business support we received over the years. What I had not prepared for was a host of unanticipated emotions related to letting go, plus the challenge of figuring out what was next for me. Not having figured myself into that equation, a kind of grieving process followed the sale (one that I now know is well documented), resulting in emotional conflicts for which I was not prepared. The three-year buyout that allowed me to continue working in my practice found me functioning in a state of denial, followed by anger and depression. Still feeling responsible for my staff, I made every effort to remain positive among them and the new owners, hoping that neither could see my secret struggles. I did not want to feel as I did, nor did I want my inner conflicts to reflect negatively on my patients, my staff, or the new management. After all, wasn't I supposed to feel happy?
It was at this point that the support of a business and life coach proved invaluable. Thanks to this wonderful professional, acceptance and gratitude finally became possible to me—so much so that the heartfelt letter of thanks I wrote to the purchaser of my business expressed my gratitude for having had the opportunity to end my ownership well, and for my “child” to continue to grow without me. I had managed to progress through the normal—often debilitating—sense of loss and the cycle of grief that tends to beset this arduous process.
HOW TO SELL ON YOUR OWN TERMS
My transition into a life and business coach was the product of having completed the life cycle of a business (infancy to empty nest) and gave birth to a passion for supporting business owners approaching the end of the marathon of business ownership. These business owners have a plethora of questions, such as:
- Where do I start?
- Is this the right time?
- How do I know what my business is worth?
- What about my employees?
- What about my patients?
- How am I going to find the time?
- How can I make sure my business continues and prospers after I'm gone?
To prepare for the future sale of a business, it's important to have a game plan that ensures the sale proceeds as smoothly as possible, the owner's legacy is maintained, and all parties can get on with whatever is next. As in child rearing, however, all the books and resources in the world cannot supersede the actual process, nor can they discount challenges. Not one of the books I read when raising my sons had all of the answers, nor did they provide a step-by-step plan for getting parenting right each time, but I am certainly grateful for the insights and advice that I gained.
Business strategists Barbara Findlay Schenck and John Davies noted that “owning a business is like running a marathon, and selling a business is like crossing the finish line. Getting paid to turn your business over to a new owner is the final reward for years of business creation and good management. It's also—just like finishing a marathon—hardly a decide-today-do-it-tomorrow proposition.”1
Bear in mind that the field of audiology is transitioning. In 2017, it was reported that Costco had 11 percent of the hearing aid market. Other than the Veterans Administration, Costco has the largest market share of hearing aids sold in the United States. As fast as Costco is growing, its hearing aid centers are growing at an even more rapid pace than the Costco warehouses themselves.2,3 Manufacturers are also actively pursuing and purchasing private dispensing practices. Thus, since hearing aids can be sold with smaller profit margins in such settings, a private practice cannot realistically compete on price alone. Also, with over-the-counter hearing aids becoming more mainstream, many private practice audiologists are wrestling with the decision to sell. However, many professionals believe that by keenly observing best practices and providing high quality of care, independent practitioners can experience ongoing success. Gyl Kasewurm, AuD, asserts: “Benefits always outweigh price in this industry.”4 Ideally, quality and best practices should always win, and that certainly was my approach to patient care.
However, having been a personal witness to owner distress over the decision to sell and the selling process, I see a need for an honest discussion, especially for individuals who choose (for whatever reason) to move on to whatever is next. I know some colleagues who sold their practice while ill-prepared and before their businesses were well-positioned. Some have bemoaned the direction their practice took after their departure. Others are still holding out because they don't know what they want to do or where to start. There are also those who did well and headed off into the sunset, while others continue to work under a new management, doing what they love without the pressures inherent to business ownership. My experience is an example of someone doing the next thing.
Professional observations, personal experience, and research lend focus on exiting a business that puts the practice owner in the driver's seat. Here are five important suggestions for making that happen:
1. DON'T COMPROMISE. Know what you want and know that you can support it. Why are you selling? When do you what it to happen? What do you want for your practice (based on valuation and evidence)? Are you willing to stay on for a time? According to Gerber, a business is best positioned to sell when, from inception, the owner has planned for that eventuality.5 Hence, with processes in place, the owner is able to hand over a well-oiled machine. Done correctly, the sale of a business can “set you and your family up for life,” and done incorrectly, it may leave a previous owner with little to show for years of effort.6 It comes as no surprise that profitability and growth are the greatest indication of a healthy and sellable business.7 Relative to which, a broker friend assured me that the next most important factor in valuing a business is clean record-keeping.
What kind of curb appeal does the business offer? When my husband and I recently purchased a home, candidly, the outside appearance is what drew us to it. So, with regard to selling your business, are the signage and marketing materials current? When was the last time a coat of paint was applied? Are the windows clean? How about the area's landscaping?
Viewed from these perspectives, not compromising means not letting someone else call the plays. Know all aspects of the business, its strengths, uniqueness, and genuine value. This gives you great credibility when presenting the business favorably. Unsurprisingly, when homework is left undone, compromise occurs. Those without a thorough knowledge of their business certainly do not have the ability to support a desirable sales outcome. Stated another way, those who never determined what they wanted can hardly expect to get it. Colin Powell's words ring true: “You can't make someone else's choices. You shouldn't let someone else make yours.”
2. TAKE THE HIGH ROAD. Be in a position to confidently and honestly answer probing questions. If there has been an ongoing effort to abide by recommended ethical practices, who better than the private practice owner to tackle all issues in the most upstanding way? A business should be an open book with clean and transparent record-keeping and completed “housekeeping.” To the greatest extent possible, any legal issues have been cleaned up—not glossed over—and financial challenges addressed. In the business world at large, far too often owners fail to claim all income or, all too commonly, make personal purchases through the business. These can negatively affect the sale in two possible ways. First, if the business does not show a certain income in the books, the owner may have difficulty justifying a higher sale price based on profitability because the evidence is not there to support the asking price. Second, personal purchases can create gray areas of ownership (for example, cars, lawn equipment, etc.).1 Consult with your accountant on items in the gray area, and consult with your lawyer on any pending legal issues. Do not try to hide any issues, and be ready with a well-thought-out plan of action.
3. HAVE A GAME PLAN. When selling a business, the owner ventures into a maze of decisions and countless things to be done—all while managing ongoing business operations. Thus, getting one's homework done prior to the actual sale simplifies the process, lending confidence to all concerned. Create a game plan that optimizes available resources such as an accountant, a lawyer, a broker, a coach, audiology professional organizations, SCORE, etc.
4. PASS THE BATON. Pull one or two employees (maybe even a team depending on the size) into greater management responsibility. Taking oneself out of critical roles makes sense when the business is largely dependent on owner contributions. The owner—as the key or sole provider—will need to hire a successor and train him or her, or prepare to stay on for some time. Delegating major tasks helps the owner as he or she plans and executes the sale process. This also sets up the business for a smoother transition and gives the business a value of greater transferability—the value placed on a business without the involvement of the previous owner.
5. HIRE A COACH. Hiring a business coach or obtaining support from an objective outside professional should be a high priority. The sale of a business is a huge decision, requiring critical transitions at all levels. In my situation, although my business was being purchased by someone I knew, I consulted with SCORE and hired a life and business coach. Any degree of success attests to the fact that accomplishments—rarely if ever—are achieved without support or someone cheering behind the scenes. The following celebrities all credit their coaches for much of their success: Oprah Winfrey, Leonardo DiCaprio, Serena Williams, Andre Agassi, and Metallica.8 Having a coach provides objectivity (perspective from someone not emotionally attached to the business) and accountability. A decision of this magnitude affects so many lives that it warrants expert and objective support.
Selling a business entails a major professional and personal transition. Selling a business involves major professional and personal transition. Before crossing the finish line of the marathon of business ownership, consider these suggestions so you can end what you began with love and passion in a way that allows you to say to yourself, “Well done.”