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Wellness Capital Management is pleased to offer an in-depth complimentary 30-minute Wellness Business Consultation.

 

Keeping the Buzz

How inspired and passionate do you feel when you leave a trade show, retreat or conference? As I head for the airport, my mind is full of fresh ideas and information. Then what happens? It's quickly back to business and into the routine. Two days later, your massage therapist was late, your guest was cranky, the computer system blows up and all of the sudden this newfound motivation wanes. It feels as though your passion fades as the plane leaves the tarmac. Let's change this. Last year showed that we're attending trade shows again. As we head into the spring trade show and conference season, the opportunity to renew is upon us once again. It's important for us to see new things, sample new products and to listen to what the industry leaders have to say. 

It's no secret that we've had a tough year and that our industry has changed. Our guests have less money to spend and they want more for less. If we don't adapt, we can't move forward and grow. 

Business grows on relationships. We must constantly implement new and creative ways to engage our guests and create loyal relationships. The good thing is this type of business promotion doesn't cost you money. Programs and services that focus on relationships don't require advertising, and if they are advertised, appear contrite and insincere. The cultivation and promotion of these services requires intention, caring and common sense.

A Fair Deal
I recently completed brokering a transaction for the sale of a medical clinic. A fair value was determined, and there was a sustained and growing profit that could be sold and in part used to service the debt that the buyer would be servicing to purchase the practice. Business and practice sales are an interesting dance-a game of push and pull. Seller has something of value to sell, operationally and financially. Buyer views this as an opportunity they want to pursue. Initially, both parties have the same goal with opposite intention. The seller wants the highest possible price and feels their business is worth "x". Regardless of asking price, the buyer wants to pay "y". The value of what someone buys is in the profit and equity of the business. Without profit, there is no money to pay debt. The value is determined in part by the risk involved, investment, and motivation of the parties. Financing is available but tough to find. In this case, the seller was able to get a higher price because they were willing to be the bank and carry a note for part of the purchase price. 

The initial steps of this dance should be respectful listening. Transactions are a series of presenting and verifying facts. They work best when the parties trust and respect each other. Is this an opportunity that meets both parties objectives? Are the intentions of both parties in sync? As the business evaluation begins, these objectives and intentions are tested. Respect leaves the buyer-seller relationship and the transaction takes on the energy of a cat fight when one party decides that their objectives are more important than those of the other party and stops listening and is unwilling to learn from their counterpart. 

It is important for the buyer to see themselves in the role of owner, and to determine what aspects of the profitability of the business are embedded in the personality and strengths of the seller. A business that is dependent on the personality of the seller is tough to emulate. A business that operates with limited seller involvement is more likely to maintain a similar financial performance after the business is sold. If the buyer can emulate this and, in time, replace this dependence, the transaction has a chance for success. Again, whether the buyer is willing to do this is a matter of respect.