The Most Valuable Business Plan You Have Ever Created
Carter Schelling explains why PT business owners should build a written growth plan for after the sale, and how showing acquirers that plan can strengthen their position at the negotiating table.
Full transcript
Generated from the episode audio and lightly edited for readability.
Good afternoon. I'm Carter Schelling, director of business development at Martin Healthcare Advisors. For the last several years, my video production company has helped Paul create his terrific series of video interviews and presentations, many of which were shot right here in this studio. In addition to helping Martin Healthcare Advisors, I also run a consulting firm called 3655 Incorporated. And for the last 43 years, I've helped business owner clients create extraordinary companies in ordinary industries. You know, at this time of year, Paul normally does a series of shows on business planning because we believe firmly that you should have a written business plan for your company for 23.
And that plan should be ready to go in the first couple of weeks of January. So, now's the time to develop it. I asked Paul if I could stand in and do these shows with the help of him and his team because there's some things I've learned over the last decades of participating in and leading my clients business planning sessions that I'd like to share with you. One of them today is going to be, I think, pretty interesting and may change the way you look at preparing to sell your company.
The next five shows, we'll have Paul and his team join me to discuss the components of the most valuable business plan you'll ever create. The plan you'll use to prepare your company to get you the best possible deal when you sell it. And those components will have a number of elements that you're familiar with and perhaps some that you're not. I'm here today to talk about one of those that you may not be familiar with, even though it's what Tom Peters used to call a blinding flash of the obvious.
So, if you just say there's a there's a date at which you're going to sell your company and it's whether it's three months from now or six months from now or a year from now, it doesn't matter. On that day, you will have wanted to have been working on a specific business plan to we talk about steadily increasing your EBITDA and steadily decreasing your risk from where it is today. And in future episodes, we'll be talking about how we can help you do that so that on the day of your sale, your company is worth more than it is today.
What's interesting though is that alone may not get you the best possible deal because owners sometimes fall into the same trap that competitive swimmers fall into. Competitive swimming is one of Paul's favorite sports, but it's a really weird sport. It's the only sport I'm aware of where the finish line is a wall. Okay. So, those poor guys in the water are being asked to go full tilt into the wall and naturally there's a an instinctive reaction called whoa. And so, there's this phenomenon that coaches have to fight of like whoa, stopping right before they're done or at least slowing down.
So, there's a phrase in competitive swimming called swim through the wall. Swim through the wall. And that applies here because we ask our clients to swim through the wall because that will help them begin to look at this process not from their point of view as the seller but from the acquirer's point of view. You know, acquirers look at this a little differently. They're concerned about this process. This is good. But they're mostly concerned about what's over here, what's on the other side of the wall, what happens after the sale.
In fact, acquirers are mostly growth seeking missiles. They love growth. They're after growth. After the sale, sort of like YAC, right, in football, yards after the catch. How far does this character go after he catches the ball? How far can your company go? After we buy it. And the reason for that is that the only way they get paid back all that money they give you on the day of the sale is from your future growth. So they need to see this green line go up a lot.
Okay? They need they're up for how much growth can we get? Steady growth, reliable growth, profitable growth. But how much growth can we get after we buy you? And not that many owners spend real thorough time building a written plan to show them how much growth they're going to get. But acquirers really like that. Why? Because right now they have so many targeted opportunities in the marketplace for acquisitions. They don't want to pull people off those opportunities to stop and help an owner they've already acquired develop a growth plan.
They like owners who already have a growth plan for after the sale. It's sort of like that phrase just add water, you know, like I just want to add money and you'll do everything else they want the owner to say got it. I got this. I'll get the new patients. I'll get the new staff. I got it. Just give me the money. Just add water. That really catches their attention. And if you want to have the best possible deal, if you want to stand out, if you want to Paul talks about jump to the front of the line, you need to bring a written wellthoughtout plan that covers all the elements you have to address to be able to achieve this kind of growth after they buy you.
And when you do that, your position at the negotiating table will change. You'll move up to first class. And that's what we do for our clients. We focus them not only on preparing for the sale, but preparing for their success after the sale. I think you should think of yourself as not just selling the company but is growing the company in two different phases. And even in this phase, your people are still important to you. What your company stands for in the market, your reputation is still important to you.
And in today's world, you're probably still there and you have a deal that gives you more money when you grow. So, we're asking our clients to put focus in the beginning and the next phase of this process. As you'll see in the shows to come, there's a lot of work to be done here. But just like anything else, if you want to be the best, if you want to have the best possible deal, you're going to work hard and you're going to think about things most people don't think about, including the other side of that wall.
So, thanks for your time today. If you'd like to discuss any of the issues I've talked about today or others related to selling your company, please put your name and email in down below. We'd love to start a conversation. And see you next week.
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