Hello, and welcome to Beauty and the Biz where we talk about the business and marketing side of plastic surgery and how to exit your practice.
I’m your host, Catherine Maley, author of Your Aesthetic Practice – What your patients are saying, as well as consultant to plastic surgeons, to get them more patients and more profits. Now, today’s episode is called “How to Exit Your Practice — with Lamar Rutherford, MBA.”
Most cosmetic practice owners think about, worry and plan for their financial future.
They wonder how they’ll get off this treadmill and get their hard-earned money out of their practice when they decide to slow down or sell.
They ponder how many years they have left to shoot the lights out and grow their net worth, so they don’t have to step down their lifestyle once they retire.
⬇️ Click below to hear “How to Exit Your Practice — with Lamar Rutherford, MBA”
So, in this week’s Beauty and the Biz Podcast, I’m interviewing someone who helps surgeons exit profitably from their practices when they’re ready to do so.
It’s Lamar Rutherford, MBA and CEO of Excellens Solutions based out of San Diego, CA.
Lamar is a licensed business broker, as well as a Mergers & Acquisitions Advisor to smaller businesses, including cosmetic practices.
She came on my radar because she was involved in the sale and merger of a few surgeons I know so I wanted her to share her words of wisdom for those of you who are, or should be, thinking about how you can exit your own practice profitably.
Lamar talks about her “5 D” exit plan that you want to know about so you, too, know how to set yourself up for a successful exit.
👁 DON’T MISS THESE INTERVIEWS 👁
How to Exit Your Practice — with Lamar Rutherford, MBA
Catherine Maley, MBA: Hello, and welcome to Beauty and the Biz where we talk about the business and marketing side of plastic surgery and how to exit your practice.
I’m your host, Catherine Maley, author of Your Aesthetic Practice – What your patients are saying, as well as consultant to plastic surgeons, to get them more patients and more profits. Now, today’s episode is called “How to Exit Your Practice — with Lamar Rutherford, MBA.”
Now, today I have a very different kind of guest, who’s an expert on how to exit your practice.
Usually I have surgeons, but today, I am interviewing someone who helps surgeons exit profitably from their practices when they’re ready to do so. It’s Lamar Rutherford, MBA. She has a very fancy name and she’s CEO of Excellens Solutions, who help surgeons on how to exit their practice, based out of San Diego, although she can work throughout the US.
Lamar is a licensed business broker as well as a mergers and acquisitions advisor to smaller businesses, including cosmetic practices. Now she has personally brokered the sale of over 50 businesses and over 100 transactions in a variety of industries and has started, managed, and sold several of her own businesses, and can help you learn how to exit your practice.
Now she got on my radar because she was involved in the sale and merger of with, of several surgeons that I do know. So, I wanted her to share her words and wisdom on how to exit your practice that she helped with the other surgeons. But now help you who might be thinking about or should be thinking about exiting your practice profitably.
So Lamar, welcome to Beauty and the Biz.
Lamar Rutherford, MBA: Thank you, Catherine. Thanks for the nice introduction.
Catherine Maley, MBA: Sure.
Lamar Rutherford, MBA: Definitely not a surgeon!
Catherine Maley, MBA: You know, now that I’m getting older, I’ve been in this industry for 22 years working with plastic surgeons and now that we’re all getting older, there’s a lot more discussion about how to exit your practice.
What do I do with this business? Like what is, you know, I have my practice. I’ve been working in it for 30 years, , and I’d like to step away, but how do I do that? In the old days, it was easier to do. In today’s world, it’s a lot more complex. And so my first question would be, when do you want to start planning your exit? How does one learn on how to exit your practice?
Lamar Rutherford, MBA: Well, you could start planning your exit any. But and have that goal in mind. We always say planning for the exit is good business practices, but you know, at least a year in advance you can really make a difference on what happens. But some of the things that make a difference for getting more value for your business, you want to start?
Earlier. And I’ll give you an example. A lot of plastic surgeons, it’s all about the name and the name of the owner. And so if you can start to kind of transition away from it being just about that particular surgeon, you’ll get a better value. And sometimes surgeons are very specific about the work they do.
But if they bring on other surgeons or other nurse practitioners, that sort of thing then the business is not all about them and it’s easier to get a better value when you sell. So to kind of think about it more, A business versus their own private practice makes a difference. And so, you know, when do you start that?
Well, the earlier the better because we always say you want to look at your business through the lens of a buyer. Our company name is Excellence, but we, we play off that. So if you think about it from the lens of a buyer, if the business is all about you and you leave, then the customers are more likely to.
To have the opportunity to change or to go to a different doctor or that sort of thing. So the more you can make those relationships and those customers not solely dependent on you, then the better the sale for the buyer, the, the less risky, and so you get a higher value and it’s less risky. Does that answer your question?
Catherine Maley, MBA: Yes. And the really big question is, in regards to how to exit your practice, because if you look at it from, like, I always say I’m a consultant to surgeons and I always say, build your practices if you were going to sell it. You know, think of the practice as what, what value at do I have right now in this practice that another surgeon would also value and pay top dollar four?
Lamar Rutherford, MBA: Right?
Catherine Maley, MBA: So, what kind of assets. Because we always do the usual, like do you have a long-term lease? Do you have a big patient list? But in today’s world, what is a value to another per another surgeon who would want to take over a practice, in regards to how to exit your practice?
Lamar Rutherford, MBA: And every time you mention something, I’m like, Well, I could talk about that.
So exactly you want to look at your assets and what would be valuable to a buyer. But let me give you an example. The lease it’s helpful to have a long-term lease because that’s something that the buyer can count on. But if you have a lease, With options then the landlord is sort of tied in with the options.
But when you go to sell once that option or once that lease is up, you get off the lease. So, if you have a really long-term lease, you often stay on it as a backup. And so. A couple of things related to that. You want to make sure the buyer is qualified and able to continue to pay that lease or if you can, are there ways to negotiate to get off that lease?
Landlords don’t really have any motivation to let you off. They, you know, they can keep you as a backup if you sign that lease. Sometimes leases aren’t personally guaranteed, so you don’t have that risk. It’s only guaranteed by the business. But they’re all things to think about when. Evaluate a buyer.
And that’s one thing to remember too is when you are selling your business to think about who is a good buyer for your business. And some of that is size related. Larger businesses are more likely to have maybe private equity group come in and by or other medical groups smaller businesses.
It’s more difficult for those groups to come in and take over. So, You know, size matters in terms of who the buyer might be. You might be more likely to be bought out by an individual doctor if you’re smaller. And then other factors related to buyers. Sometimes another plastic surgeon might want to buy you.
And that we consider that sort of a strategic buyer. Another plastic surgeon buying you. You want to make sure that there is value and they’ll get your customers, you’ll be able to transition them. Sometimes there’s a period where you can transition and the, and the customers are more likely to stay.
So, so you want to think about that in advance and try and set your practice up so that it is easier for whatever kind of buyer to take it over. And the more buyers.
Catherine Maley, MBA: That’s so out of curiosity, in reference to how to exit your practice. Some of the surgeons have bought their building, mm-hmm. and now they realize, wait a second, I don’t want to sell my building.
I want to keep it for security and for passive income after I learn about how to exit your practice. So, I’d rather become a landlord now. But then does that hurt or help when you’re trying to sell your practice? Does it her or help to have a building involved in the transaction?
Lamar Rutherford, MBA: Most of the time when people are buying a practice, buying the building as well, stretches their economics.
So often they want to buy the building, but not till later. So often the seller can get that lease and that passive income for a. At least a while and sometimes ongoing. So it doesn’t really hurt the sale to not sell the building. It can help in some cases. A doctor wants to buy both, but again, a lot of times they’re stretched out financially on just the business purchase and can’t afford the business right away.
SBA makes it very attractive for owner occupied and so they will want to buy it and they’ll want an option and you can kind of evaluate whether that makes sense.
Catherine Maley, MBA: And then where does the staff fit into this, in regards on how to exit your practice? Do you, do you like to package up the transaction, including the staff or not? Or, how does that work?
Lamar Rutherford, MBA: So, the staff is part of the business. So, if you think about it, the what? Buyers pay for is the, really the return on the investment. So, when they invest in your business, they want to make sure they get that annual income that you’re making. To make that income, they have to have the assets of the business.
And part of the assets of the business is the staff. It’s your processes and procedures. It’s, you know, whatever is your equipment. It’s all part of the business purchase and. The more that staff is willing to stay, the better the value. If the staff all leave when you leave, you know, it’s almost like what are they getting a customer list?
It’s a lot less valuable.
Catherine Maley, MBA: So, do you have to write them into the agreements and are they signing, like is the staff signing things that say I’m going to stay for two years, or anything like that, after the surgeon learns on how to exit your practice?
Lamar Rutherford, MBA: So, the most common purchase is what’s called a bulk asset sale. That’s different than a straight asset sale. A straight asset sale is where they’re just buying your equipment and maybe your customer list.
A bulk asset sale is essentially buying your whole business. And it’s similar to a stock sale. It’s just called a bulk asset sale. And the advantages of a bulk asset sale over a stock sale for both buyer and seller is that once you. The bulk asset sale, you can close the previous entity, and so previous liabilities, there’s no risk of those.
Even if there weren’t any, there might be something that comes up. If it’s a stock sale, then everything goes with the sta. So, the difference between a bulk asset sale and a stock sale is that with a bulk asset sale, one entity closes and another one opens. And so all the employees end up getting laid off and then rehired with a new entity and that.
You know, just overnight kind of thing. So, you have to get them to resign with a stock sale because it’s part of the entity already. Then they just continue with it, so it’s slightly easier. So that’s, Asset sale versus bulk asset sale versus stock sale. With employees, you generally want them to stay and a lot of times buyers will negotiate that.
They want those employees to stay. You can’t ever make an employee sign a contract where they have to stay. Right. It’s, it’s employment. It will. State or most places, maybe some states that’s not the case. But here in California it’s definitely the case and, and generally most places. And so, you can do things like if they really want those employees to stay, you can give them bonuses after they stay a certain period of time.
So that gives them motivation to stay. So that’s a good tool. Sometimes buyers want to meet and. Get the employees to sign unemployment contract before the deal closes. I’m always very careful about that because you never know until a deal closes that it’s really going to close. We had one deal where two hours before the money was being transferred, the buyer got slapped with a lawsuit and so the bank froze everything.
You just never know. It can be, you know, the strangest circumstances. So, we always to keep the stress low for customers, for employees, for everyone. We always recommend not telling them until it closes, unless you really feel like you have a relationship where you need to or it’s required as part of the purchase, but we’ll do that as close to closing as possible.
Catherine Maley, MBA: So many variables when learning how to exit your practice. This and, and so many are, are uncertain. You don’t know what’s going to happen. Cause there are so many people involved and personalities and how they react to things. So, do you wait and shock them? You know, you tell the staff the night before, by the way I sold the place. I’m not, I’m not sure that’s a, I don’t know about that either.
Lamar Rutherford, MBA: Generally, I, you know, I’ve sold my own businesses and it’s difficult, but generally I think it’s easier to tell them once you know the answer and. If you tell them that, yes, we’ve been working on this. I’m sorry I couldn’t tell you earlier, but I wanted to wait until we were sure. And I also wanted to be able to introduce you to the new owner and make sure that they were great.
So, I think that makes it a, I don’t know. You know, everyone has a personal relationship they have to evaluate, but that’s generally what we recommend.
Catherine Maley, MBA: I will tell you, just in my consulting, I have noticed that the one that works fairly well is when you bring that one in, that that not a fellow, somebody a little older or who’s willing to, the doctor’s willing to, you know, groom that person before he learns on how to exit your practice.
But he is, you know, he’s younger. He, they bring them in kind of as an associate. Everyone feels everyone out. Make sure they have a good match with good values that you know are congruent. And then the staff’s comfortable. Everyone’s comfortable, and now they have a meeting. You know what we are going to be selling?
I’m going to be selling to this another doctor, you know, in a year or two just to like cruise into it instead of like this huge shock and being too quick on how to exit your practice.
Lamar Rutherford, MBA: I highly recommend that I think. Find someone who’s a good fit and you can kind of test them out as maybe an employee or a staff person. And then over time, maybe they earn ownership over time, or maybe they buy it out at a certain point or they buy a percentage and then buy more.
I do a lot of those deals. I help structure those. So, and I, and I. I think that that’s one of the, the great ways to do it. Sometimes these private equity groups that are buying practices sometimes they have a system for doing that. So, if you don’t have someone you can sell to them and they can find someone to bring on and, and help make that transition smoother, that works too.
Catherine Maley, MBA: So, I haven’t had as good luck with that, in regards to how to exit your practice. Like the, these big guys coming in who know nothing about plastic surgery, they don’t know the people. I just think that’s a little rougher road to go down. It’s not the worst, it’s just, it’s, it’s more, it’s just, it becomes more bureaucratic and more business-like, which makes sense.
But then I don’t know. But let me ask you about not just the staff, but the other revenue generators in your practice. Hopefully you have other people in your practice making money. God help you. If you are 96% of the revenue generation in your practice and you want to walk away, you don’t have, what do you, You don’t have anything to sell after you’ve learned on how to exit your practice.
You know, nobody wants to buy your list. They want to buy predictable income. So, if, I hope that at that point you have like a nonsurgical revenue stream, then perhaps you. I don’t know about aestheticians, but certainly the bigger ticket items you have some nurse injectors or PAs or NPs who really make a lot of the money.
You know, actually I used to run a surgeon’s coaching club and the my, my mentor said to the other surgeons, If you are more than 27% of your practice revenues, you’re not running your practice. And everyone looked at it, I’m like 27%. How do you do that? You know, becuase that was such a shocker, in terms of on how to exit your practice. But he also was able to have a major personal problem his.
$6,000 home burnt down in 45 minutes. And because he was set up so well, it was just a little ping. It was like a, a pain in the neck kind of thing that happened rather than an absolute disaster. Cause he had his practice running so well with plenty of other people in there making money that he was able to take a lot of time off to fix that personal tragedy that happened with him.
But what do you think about that, in regards to how to exit your practice?
Lamar Rutherford, MBA: Well, you, Yeah, you raise a good point. Revenues and revenue. One of the things we watch for is customer concentration. Well, most doctors have multiple patients, so customer concentration isn’t a huge issue. Customer concentration is when one customer accounts for a large percentage of the revenues but they have the opposite problem where they’re often the.
The concentration or the revenues are all dependent on them. So, the more you can come up with revenue streams that are not dependent totally on the owner, and that is often other nurse practitioners or others doing services and services where people have to come back on a regular basis are more valuable than one time services.
And then recurring revenue. So, it’s great if you can get aestheticians and nurse practitioners and that sort of thing to bring in revenue, but also if you have point systems or other systems that keep people tied in the stickier the revenue, the better. And so those things are great even, and sometimes recurring revenue.
You know, I always say, you know, some businesses recurring revenue is difficult, you know, based on technology. But I’m like, Amazon turn delivery into recurring revenue. So there, you know, sometimes you just have to be creative on how you look at it. So, so try and, and look at your practice that way.
If you can say, Okay, you’re coming in for services once a month. What if we just charge you monthly and it’s this rate instead of just per. Sometimes that works. But in terms of recurring revenue, the stickier, the better, the more valuable. So whatever you can do to get people signed into contracts where maybe it’s 30 day cancellation, but it’s still stickier than them paying you each time.
Does that make sense?
Catherine Maley, MBA: Yes, in regards to how to exit your practice. And that’s exactly why I came up with my, my own program called the KISS Club, the KISS Loyalty Club, because you’re absolutely right. It’s so much easier to keep that repetitive nonsurgical patient than it is to keep that one and done surgical patient. There’s so much more uncertainty with the surgical than the nonsurgical.
And I mean, a cosmetic patient will be a cosmetic patient today and tomorrow and next year and five years from. And if you take good care of them and add that stickiness, like a really special program, like a KISS program where they don’t want to go anywhere else because they can’t get kisses from anyone else, they can only get them in your practice, in regards to how to exit your practice.
Right. That’s super helpful. So that’s one thing I’m trying to do to add value to the surgeons who want to exit. So they have something to sell. But speaking of that, the revenue generators, such as the RNs or the laser techs, or the NPs or PAs, would they have to be packaged in with the deal or, because again, you can’t make them stay either, but.
But they’re way more, well, I shouldn’t say way more. Everybody’s important, but it’s easier to lose the front desk person than it is to lose that RN who brings in a million a year, regardless if learning how to exit your practice.
Lamar Rutherford, MBA: You know? Exactly. It’s very important that the more you can get them to stay and be sticky, the better too. Because they are the rev revenue generator.
Now, if they’re easy to replace, like, Oh, you know, tomorrow I could go find a half a dozen nurse practitioners that know how to do this, you know, generally they probably. The ones that are easier to replace, those services are easier for people to get elsewhere. . So, so the ones that are really valuable are the ones that are better to make sure that they’re sticky and, and stay when the buyer comes in, right?
Catherine Maley, MBA: In today’s world, in relation to how to exit your practice, I don’t think it’s easy to find really good revenue generators, you know, if you can find one, I would hang on to them. Things have changed a lot. And there’s so many options nowadays for where they can go. And then a lot of people who, like a revenue generator, let’s say an RN, she’s an excellent nurse injector.
Notoriously she says, Oh, I, I’m making a million for this practice. I’ll just go out on my own and do it myself. And they don’t realize what goes into that, you know? Yeah, yeah, yeah, yeah. I mean, that can be a rude awakening. I’m just wondering how legal do you have to get. If I’m a surgeon buying someone’s practice, and I’m looking at, okay the surgeon has a terrific list of happy patients, great revenues, but, but, you know great reviews great referrals and all that, but it, but does that constitute money for me and learning how to exit your practice?
So then maybe, well, maybe not, I’m not sure. So then I’ll look at his other revenue generators. He has two nurse injectors who are just crushing it. But how do you buy that if you. No. If they’re going to stay, I don’t get that part, in reference to how to exit your practice, that is.
Lamar Rutherford, MBA: Well, that’s where sometimes they tie them in with you know, sometimes they change the purchase price and say we’ll pay you more if they stay longer.
So that there are sometimes terms that way if it’s a real sticking point. Generally, I try and avoid that when I do deals, but there’s also You know, that bonus. Whereas if they stay, they get that bonus, that can be part of the deal and that can help alleviate that challenge. You know, it’s not a perfect world, but it certainly can help.
Catherine Maley, MBA: Now, money, Money certainly is the motivator, when dealing with how to exit your practice, isn’t it?
So, just generally speaking, what would you like, give me like the, the five tips, something like that, in relation to how to exit your practice. Like five tips of what you do now, no matter how long you’ve been in practice, what you can do now to plan for your exit whenever you decide to.
Lamar Rutherford, MBA: So, my first tip is always have good books. Your books are clean.
It’s really important. I always say your financials tell a story. Your books tell a story. Make it a best seller. And so, so you really want things to be clean and straightened out and not anything that’s going to raise suspicions. So there might be some old transactions that, you know, Oh, it was reversed, it’s all great.
It’s, it’s all cleaned up. But the reality is anything that creates kind of some of that suspicion you want to clean up beforehand and make sure that it’s like on a. If you get into a house and there are cracks in the foundation and no one told you about it, you wonder what else is wrong? . So, so clean books is my number one thing.
Number two, try not to make it all about you, which we talked about because it’s harder to transition. Three recurring-revenue. Whatever you can do to make your revenue sticky and strong and keep your staff there, those are all important. Fourth is look at your assets. If your assets are in good shape and good condition that’s important.
And also, transferability with assets. So sometimes assets. And I’m talking equipment. Sometimes equipment has a loan against it. Is that transferable? Are you going to have to pay it? So, pay attention to that. I don’t, plastic surgeons often don’t have insurance contracts, but that’s also something that you have to pay attention to.
If you do have insurance contracts. Are they transferable? What do you have to do to do that? That’s important too with customer contracts sometimes. You want to make sure what I recommend is if they, you know, have to renew every 30 days on, on your recurring revenue, make sure that just rolls.
And you don’t have to call them up and reengage them because if there’s a change in ownership that could be a problem. And your lease or your building, make sure that, that you’re not going to get kicked out of your location. Your location matters. And so, so those, those are big tips.
Catherine Maley, MBA: Yeah. Lease is a huge tip and the laser machines are huge.
I didn’t even think of that. I remember a one surgeon told me he was going to sell, but the maintenance. The new surgeon would have to pay the maintenance because the minute there was a change of ownership, it all, you know, all bets were off kind of thing. So, everybody who’s got some equipment that they want to sell and there’s maintenance involved and sometimes it’s very costly maintenance.
You want to check into that, you know, what’s the change of ownership? Terms and, and conditions. You know, what, what, what’s involved in that? Because you don’t want any big surprises when you buy something, it turns out great and you still have to pay 5,000 a year for maintenance, regardless if you figure out how to exit your practice, or not.
Lamar Rutherford, MBA: And we can do an assessment and kind of, you know, highlight some of these things that might be potential problems.
One thing too is like if there’s two partners or they’re buy, sell agreements, because if something happens to one, what happens? Any of the doctors, you know, what happens if something happens to you? We talked a little bit beforehand about the five D’s death, disability, divorce, disaster, disagreement, and I think the stats are 50% of business owners over 55 are impacted by those five Ds, and so you, they add five Ds again.
Death, disability, divorce, disaster and disagreement. Oh, wow. Okay. So, you want to make sure you’re just, you’ve thought about that, like what happens if something happens to you and it can be a divorce. How do, what do you do if you have to, you know, share your practice? Proceeds with your ex, that kind of thing.
But more frequently I see that if there’s any kind of partnership that you know, what happens, suddenly you might be partnered with your ex-partners wife or kids, you know, So you want to make sure that there’s an opportunity to buy out in that case. So yeah, I always raise that, just to think about that.
The, the, be prepared for the five. And sometimes it’s keyman insurance. Sometimes, you know, if you have a, a key. Producer, maybe it’s another doctor. Do you have insurance if something happens to them? So, so just, you know, be mindful of some of those things that can impact your business.
Catherine Maley, MBA: Would you say most surgeons just try to sell it on their own, or do they use a broker person like you?
Or how, how do they normally, if someone’s even thinking about in reference to how to exit your practice. Do they want to contact you now and, and do a consult with you and then later on when they’re ready, ready, you come back? Like, how does that work, in regards to how to exit your practice? I don’t even know how you get started on selling a practice. All I heard is, call you.
Lamar Rutherford, MBA: Yeah, exactly. That’s what I recommend. Call me. And there’s different scenarios, different situations. So, if you have a. Then we, you know, would help you work through that transaction. If you want to be prepared, we can do an assessment and evaluate kind of what you need to do to prepare If you are already ready, know you want to sell, then we talk about what’s the best strategy to sell your business.
So, I think that answers your question, what to do.
Catherine Maley, MBA: So, one last question for me, on the topic of how to exit your practice, is how different is the price that the doctor thinks his practice is? Versus what, you know, you could maybe get for it, you know? So, is there a big discrepancy normally, and if so, do you know why?
Lamar Rutherford, MBA: Yes. Most doctors don’t factor in the fact that it’s all dependent on them, and that’s the biggest factor, but it, it all depends on what’s in their books.
I’ll give you an example. One business owner we looked at his books and did evaluation and the valuations are often multiples of, what’s it called? Adjusted ebitda or seller’s discretionary earnings, which is kind of a proximity for cash flow. So, when we were looking at that, we thought the value would be, you know, a multiple of that.
But then when we looked closer, it turns out he was not paying rent to himself. And so, it was an expensive building. That rent was over 200 grand a year, and so that had a huge impact on his valuation. So, there are things like that that can make a difference. You want to make. You know, you’re evaluating your business based on market value of rent if you’re not paying yourself rent.
So there, there’s, you know, some, the Devil’s in the details with, with some of these valuations. But generally, we can do a valuation for any company. We do it for a couple grand. It doesn’t cost much. If you ever want to know what your value is, I think it’s valuable because, First of all, you understand what the value is, and then you also know how it’s calculated so you can kind of structure your business around that, although I’ve given you a lot of the information you need.
But so values, Yeah. A lot of times owners think the value is higher than it is because they might hear from someone who sold a much bigger business. And larger businesses tend to sell for higher multiples or they may just not know the details that might cause the value to be lower. Things like the rent or the dependency on themselves or, or other factors.
Catherine Maley, MBA: Well, I know I did have a surgeon that did a huge build out in a penthouse on the top floor of this gorgeous building in San Francisco, and it cost him 800 grand at the time, many, many years ago. And he thought he was going to recoup that from the sale, and nobody, nobody else was going to pay for it.
Like, they were like, No, I’m just paying my, And I think he got like 200 grand when it was all said and done. But I, so, I, So no one’s going to pay for your renovations, you know, like they, they’re going to stay, in regards to how to exit your practice.
Lamar Rutherford, MBA: If the renovations drop to the value on the bottom line, then they’ll pay for it. But it has to show up in the profits.
Yeah. And this, like, I have a plastic surgeon that has some IP they invested in technique and. But they haven’t seen the value of that yet, so they don’t have it. So what’s the value? Probably the legal expense that you went through. But once that’s up and running and you’re starting to get a revenue and profit stream from it, then you get the value.
Mm-hmm. . Or sometimes there’s some kind of trademark or patent that has been in operating for years. Well, you’re not going to get extra value for that because it’s already showing up in your numbers. So, some of that matters sometimes.
Catherine Maley, MBA: Another really big one. This is my last one, is Goodwill. A lot of the surgeons, I mean, and I get it, they went through hell to become a surgeon.
They went through decades of staff issues you know, landlord issues, building issues. I mean, it’s just issues. And they want to get paid for that, in terms of how to exit your practice.
Lamar Rutherford, MBA: What do you say to that? The goodwill shows up in the numbers. Mm-hmm. So, if you know your assets are worth, I don’t know, let’s say half a million, but when we look at the numbers and your profits say the business is worth 1.2 million, then 700 grand of that is the goodwill.
So that’s how it shows up.
Catherine Maley, MBA: I completely agree, in terms of how to exit your practice. I really appreciate this. I think you offered a ton of value there, and I highly recommend my audience to hire you for that assessment. How important is it for you to know how much is the value your practice right now? That might be a, a huge awakening to you, or a surprise or something that, or maybe it’s even worth more than you even thought.
So highly recommend that assessment. How would they get ahold of you, if they wanted?
Lamar Rutherford, MBA: You can always email me: [email protected] It’s like “excellent” except an “S” instead of a “T”.
Catherine Maley, MBA: Google like “Excellens” with an “S”, and then Lamar, you pop up.
Lamar Rutherford, MBA: Do you want me to give my phone number? I’m happy to give that too. Okay, it’s (619) 333-6296.
Catherine Maley, MBA: Everybody that’s going to wrap it up for us today, a Beauty and the Biz and this episode on how to exit your practice.
A big thanks to Lamar Rutherford, MBA for sharing her treasure trove of knowledge on how to exit your practice.
And if you have any questions or feedback for me, you can go ahead and leave them at my website at www.CatherineMaley.com, or you can certainly DM me on Instagram @CatherineMaleyMBA.
If you’ve enjoyed this episode on Beauty and the Biz, please head over to Apple Podcasts and give me a review and subscribe to Beauty and the Biz so you don’t miss any episodes. And of course, please share this with your staff and colleagues.
And we will talk to you again soon. Take care.
-End transcript for the “How to Exit Your Practice — with Lamar Rutherford, MBA.”
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