Marketing for a practice is just as important as a retail store or online business. With patients having the ability to choose their general practitioners and their specialists alike, it's more important than ever to have a marketing strategy so you aren't lost in the mix. Long gone are the days of there being only one doctor in town that everyone went to see with no questions asked. Now, people have the opportunity to make their decision based on patient feedback, ratings, etc.
Have you begun your business planning for 2018? If you’re looking for a few places to start, I’d like to offer some recommendations. The process of putting together a detailed plan is what I refer to as The 2018 Business Imperative. There’s an old adage, “If you aim at nothing, you’ll hit it every time.” Quite frankly, we work too hard to let that be the case.
Over the past few years, many firms have realized the advantage of a well-
One of the most important aspects of a business sale is the due diligence process that the buyer and perhaps her/his advisors undertake. The buyer due diligence process serves to verify information represented by the seller and to also gain a more complete understanding of the business. It’s a critical part of the process and can take a little as few days or much longer depending on the size and complexity of the business.
Content driven marketing is a form of marketing focused on creating, publishing and distributing content for a targeted audience in niche magazines, local publications, with your website, and with social media for the specific purpose of educating the targeted audience. Content Marketing is not a tactic, but is a strategy. Think of farming by tilling the fields, planting the seeds, watering and finally harvesting the crop. It’s not a trick, but a form of creating educated clientele.
For years, the given way a physician grew a practice was through referrals from colleagues and associations with certain hospitals and/ or insurance plans. The environment is changing. While these traditional channels remain important, the consumer is more empowered to seek out information about a specific physician. That shift is impacting how physician groups and individual practioners grow their respective practices.
Let’s talk leverage this quarter. Leverage is doing ever more with ever less, and your team is the group of people that can make that happen. In fact, without leverage and a team you are never going to take your business to the next level and have a business that will work without you. You are stuck in a job that you own and nothing more. How does one leverage their business?
The world of sales in general, and the “behind-
Some businesses are created around this passion because it’s something they love to do. For me, my passion was always to help others. In the past, I have worked with seniors in helping to aid in placement in a senior community such as, independent living, assisted living or nursing level of care or helped them to stay in their home by facilitating all of the things they would need to have in place that would be necessary to do so safely. This included caregivers, transportation, home modifications, etc.
In 1990 Jim McClanahan and Maurice Adkins founded a business called Hi-
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Buyer should review information on owned and leased real estate including zoning, use permits, etc.
For many businesses the human resource component is a critical part of the functioning of a business and its inherent value. Therefore gaining an understanding of the employees and especially key employees is critical. Further review items could (depending on the business) include employee agreements (non compete, consulting, etc.), employee benefit structure, workers compensation claim history, and the employee handbook.
This is an area that can be very simple or very complex. Items to review and gain an understanding of include trade names, trademarks, copyrights, trade secrets (recipes, formulas, “know how”), patents and patent applications, and licenses/assignments to or from the business. It is also important to know all social media sites the business controls or is tied into. If the business conducts or outsources research and development it may be important to understand the status of that activity especially if it impacts the new product development pipeline.
Permits and licenses
The buyer should review the list of governmental licenses or permits. A good example of this would be liquor licenses and the transfer process since that can vary greatly by locality. If the business is in health care then Medicare and other licenses are critical.
Basically this part of the process is to understand all contracts to which the business is a party. This may be a simple list or can be extensive. One category is reviewing contracts used in the ordinary course of business such purchase orders, quote forms, and invoicing. Another area is supply, distribution, marketing, confidentiality and non-
One area of potential importance is the level of customer concentration. For example, if a material amount of the company’s business (say greater than 50%) is with just four or five customers then it’s important to understand those and that business relationship. A review of any available market research regarding current customers or the targeted customer base may be important.
The importance of this can range from minimal to huge depending on the type of business. The key review items include environmental licenses, permits, list of any hazardous substances or materials used in the company operations, and company files regarding the EPA and state and federal regulatory agencies.
Review of the company’s general liability, product liability, real and personal property, workers compensation, errors and omissions, key man and other insurance polices. Also its prudent to review the trailing three years claim history.
Is there any active, pending or threatened litigation? Are there any unsatisfied judgements?
Is the company current with all sales tax, employment tax, excise taxes, etc.? Additionally are they current with federal, state and local taxes? While most small businesses are asset sale (vs. a stock sale) it’s still important to understand the status of these items.
The extent of this may depend on whether the transaction is contemplated as an asset sale or stock sale. However, checklist items may include a Certificate of Good Standing from the Secretary of State where the business is located, a list of states or countries where the company is authorized to do business, and a list of the Company’s assumed names and the attendant registrations.
Public Relations, etc.
It is also prudent to do an Internet search to look for articles and press releases regarding the company in the last three years.
For certain businesses it may be important to understand the regulatory environment of the industry the business operates in. An example of this is the health care industry and if legislation will impact how business is conducted and if it impacts the cost structure or other aspects of the business model. These impacts can significant (both positive and negative).
The aforementioned categories are not an all inclusive list but should serve as a useful guideline. The checklist will be different for each business. It’s also important for both sides of the transaction to understand that this is a necessary part of the business sale process.
One of the most important aspects of a business sale is the due diligence process that the buyer and perhaps her/his advisors undertake.
The buyer due diligence process serves to verify information represented by the seller and to also gain a more complete understanding of the business. It’s a critical part of the process and can take a little as few days or much longer depending on the size and complexity of the business. Typically some due diligence takes place after the buyer signs a confidentiality agreement. Once a buyer gets comfortable enough to make an offer, that offer usually has contingencies that include the satisfactory completion of a more extensive due diligence process prior to an actual closing.
From a sellers perspective its important to understand the reality and importance of such due diligence. It’s not about not trusting the seller but it is about reasonable and appropriate investigation into various aspects of the business that not only will justify completing the business sale but will give the buyer the knowledge base that will help them hit the ground running after the sale and increase the chances of succeeding and optimizing business performance. Therefore, its in the sellers interest to have information organized to facility that process.
Additionally, it’s important to note that in a due diligence process surprises can and will happen. It’s normal.
No business is perfect, and everyone should try to just work through them. Following are some general categories of due diligence:
At the very least a buyer should review the last three full years profit and loss statements, year end balance sheets and tax returns. A review of the current year results on a recent year to date basis is also prudent. Things to look for and develop an understanding of include: fixed and variable expenses, unusual or non recurring income and expense items and which items are discretionary. On the balance sheet developing an understanding of the age of the accounts receivables and accounts payable helps to understand the cash flow cycle. Its also important to understand the composition of inventory in order to ascertain the age and marketability of the inventory and identify obsolete inventory.
A buyer should review the list of all furniture, fixtures, equipment and vehicles in order to get a sense of their age and condition. This helps the buyer in understanding the potential capital expenditure cycle of the business. Its also important to get a list of all equipment leases.