Gems Publishing May 2018

and Why It Is Imperative You Start Now! How to Maximize the Value of Any Company

B. Investors also look at consistency. How long do your team members stay? Has someone been there too long? (Side note: This is a huge problem. You’re loyal to Bertha because she has been there for 12 years, but Bertha is screwing you with her inability to perform her job at a high level. I see it literally every day.) Is your business basically a different business each year because you see the next new internet hype and start chasing it? Do you jump on the marketing bandwagon for the next way to magically get new patients? How consistent is your core patient base? Do you even have a core base of patients? C. Investors surely want to know what systems you have in place to run the business. Does everything go by you before it can get done? Do you have a process for ordering dental supplies or for working with your labs and suppliers? Other vendors? Do you have marketing systems? What about a sales system — do sales happen due to luck? What about patient complaints? Do you have a system for those? Every business needs systems, and so few have any except for the systems employees make up on their own. Those systems don’t count unless they were created on purpose and are documented. D. Your numbers need to be solid. What does growth in your practice look like? Do you cheat on your taxes and have two sets of books? What is the growth plan for 12–24 months? How’d it go the previous 12 months? Is a large majority of your marketing plan from the previous year still being used for the next 12 months, or do you have shiny-object syndrome, or are you simply guessing at sales and marketing? E. Investors will make sure they know your real numbers. If they think there’s any chance you’re guessing, they’ll want to dig even deeper to see if you know your numbers. By the time they are done checking up on you, they will know the truth. For example, do you have any idea what the sales numbers were last month? No, the real ones, not the guesstimate. How many leads (prospective patient calls, emails, or web forms filled in) did you get last month? How many times did you follow up with them? What was your closing percentage? F. Finally, they want to know what your churn is (lost patient rate per month and per year) and what you are doing to decrease that number. The more patient churn, the more revenue you have to put back into the practice just to stay flat. For every patient who leaves, you have to replace them or start dying. High churn will have a larger negative effect on overall valuation than any other single item we’ve talked about because most investors aren’t looking to buy a sinking ship.

By Shaun Buck, CEO of The Newsletter Pro

I want to ask you two questions, and I really want you to think about them for a second. Once you have your answers, continue reading, and I’ll give you my thoughts. I know it would be super easy to simply not answer the questions and keep reading, or to get distracted by something while thinking about the answer, but let’s agree ahead of time not to do either. One final note on this — don’t judge the questions or try to guess what I’m going to say based on the questions. Just do the exercise; you’ll get better results.

1. What do investors look for when determining the value of a business?

2. Do you have the right goals for the year?

Do you have your answers? Last chance to make a change to them.

Now that you’re ready, let’s start with the first question.

1. What do investors look for when determining the value of a business?

Before I jump into this question, I want to monologue for a minute.

If you started to read this question and thought it didn’t apply to you because you’re not ready to sell your practice, you are dead wrong. Every single entrepreneur needs to focus on this question as part of their overall plan. When you build a business worth selling, you build a business worth owning. One that can run without you there every day. One that grows in value while you sleep. A. How stable is your business plan? What I mean by this is, are you jumping from shiny new object to shiny new object? Are you simply guessing at what works in your business? This can’t be the plan. I know business gets boring, but find areas that you enjoy, and dig in. Do you think newsletters are the most exciting business I could be running right now? Of course not. But there are many areas I do enjoy in my niche, and I had to seek them out and focus on them. Since this question is broad and deep, let’s break it down.

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