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Practice Startup Success

Information Advice Encouragement

April 1, 2008 ISSN 1934-3248

Everyone lives by selling something.
Robert Louis Stevenson

In this issue:

What are you selling?
Is the tight economy stifling business loans?
Beware of “advisors” for practice sales

Everyone is Selling Something. I ran across this quote and it caused me to think – what are you selling? We are all certainly selling ourselves, trying to get people to like us and to get people to agree with us. More than that, we’re trying to promote our ideas to the general public. As chiropractors, you are also selling chiropractic. HOW are you selling it? Are you talking to people about the principles of chiropractic? Are you showing them that chiropractors are principled, ethical health care providers? Are you providing people with value for their money? There are lots of ways we sell to others. And we are selling whether we know it or not. So make sure your “selling” of yourself and chiropractic puts both you and your profession in the best possible light.

Is the economy hurting business loans? A recent article in the Financial Post http://www.financialpost.com/story.html?id=411272 said that a “U.S. Federal Reserve report found a third of banks in the United States had tightened lending standards for small business….” But don’t get too concerned. The article also stated that tight money situations seemed to be regional; I know the situation in California is totally different from the Midwest (Iowa, etc.). The National Federation of Independent Business reported that over a third of their members were able to get a loan with no difficulty. The SBA is also concerned, and said they have fewer businesses applying for loan guarantees. The bottom line for professional practices: You may have to go to a few more banks to find someone who will talk with you, but a professional practice is still a pretty low-risk proposition for a bank. Stick with small local banks. And let me know what you find out.

Tales from the Trenches: Forget the “advisor”: I talked yesterday with a doctor who was trying to buy a practice. He paid good money to have a practice advisor value the business, only to have the advisor say, “Don’t take this valuation to a bank.” Well, here’s the deal: Why bother to have someone value the business if you can’t take that valuation to a bank? Now, this was a little bit of an unusual situation, since the practice had recently changed from insurance-based to cash-only. But the advisor told the client, “No problem; we can do this valuation in this situation.” My suggestion: Forget the valuation. A practice purchase price is based on the concept of “willing buyer/willing seller.” If you can both agree on the value, and you can get a bank to understand how you came up with it, save yourself money and don’t bother getting a valuation.

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