August 20, 2025 • 41 mins
Selling your business isn’t something you decide on Monday and complete by Friday — it’s a strategic, multi-step process that can take 12 months, 18 months, or even years to get right. In this episode of Built to Sell | Built to Buy, host Sam Penny sits down with returning guest Sally Stuart, one of Australia’s top business brokers specialising in healthcare, allied health, aged care, and NDIS businesses.
Together, they go list-to-list, comparing their Top 10 Must-Do Items before taking a business to market. From the broker’s vantage point to the business coach’s perspective, you’ll hear where they agree, where they differ, and how each point can significantly impact your sale price.
What You’ll Learn in This Episode:
- Why defining your reason to sell should be the very first step.
- The role of professional valuations — and why “what you think it’s worth” isn’t enough.
- How to clean up your financials and avoid scaring off buyers.
- Legal and compliance essentials that can derail a sale if ignored.
- Documenting your SOPs to increase value and reduce risk.
- The dream team of advisers you need before you go to market.
- Marketing materials that make your business irresistible — including the IM and pitch deck.
- Identifying and resolving key person and operational risks.
- Why removing owner dependency opens the door to more buyers.
- Managing employee and customer impact for a smooth transition.
Why Listen?
If you’re a business owner even thinking about selling in the next 2–3 years, this episode could be worth hundreds of thousands of dollars to you. Sam and Sally unpack practical, actionable strategies you can start implementing today to boost your valuation and make your business irresistible to the right buyer.
Connect with Sally Stuart:
- LinkedIn: Sally Stuart
- Email: sally.stuart@linkbusiness.com.au | sally.stuart888@gmail.com
- Phone: 0437 082 045
Resources & Links:
- Follow the podcast so you don’t miss the next episode.
- Download both Sam’s and Sally’s checklists from this episode to start preparing your own sale-ready blueprint -> CLICK HERE
- Want to work 1:1 with Sam? Exclusive coaching for podcast listeners: CLICK HERE
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome back to Built to Sell, Built to Buy, the show where we take you inside the dealmaking world, whether you're preparing to sell your business or looking to buy one the
smart way.
I'm your host, Sam Penny.
And today we've got one of my favourite guests.
She's returning.
It's business broker extraordinaire, Sally Stuart.
Now today's episode, it's a little bit different.
(00:20):
We're going to go head to head or maybe list to list.
We're talking about the brokers checklist.
10 things to do before you list your business.
I've put together my top 10.
These are the must do's I think from my perspective before taking your business to market.
And Sally's done the same from her years of experience selling companies across Australia.
(00:41):
We're going to compare, debate and unpack each point.
So by the end of this episode, you'll have a clear actionable blueprint for getting yourbusiness sale ready and maximising your valuation in the process.
So let's dive in.
Let's see where our lists match.
and where we might disagree.
Sally, welcome.
Thank you for the kind introduction.
(01:01):
think it's a great topic and a great way to unpack actually what are the main top 10.
Excellent.
Now, before we dive in, a quick intro.
Sally, who are you?
What do do?
Sure, so thanks.
I'm Sally Stuart I'm a specialist business broker.
I only work with Drs Dentists Allied Health, Aged Care and NDIS business owners.
(01:23):
When it comes time for them to sell because they want to buy bigger, buy smaller, retire,maybe they've had a partnership breakdown at home or in the workplace and it's time for
them to sell.
I'm the deal facilitator so I can help their dreams come true so long as they've got agoal to work towards which is what my first point is, Sam.
(01:44):
So people need to have a reason to sell.
And sometimes it's not till their backs to the wall.
They get sick.
Someone suddenly passes away or there's a breakdown.
Don't wait.
So develop a sales plan.
That would be my first point.
You need to define your why.
Why do I want to sell?
What is your goal?
What do I want to do after the settlement when I hand my keys over?
(02:08):
What will the future look like?
Once you've defined your goals and your why,
you need to then understand the market and establish some timelines to allow you to reachthat goal.
Now you might say, well, at that stage and age in my life, I'm going to be 60.
Can I retire then?
This gives you time to work with your financial advisor and planner to make sure thatyou're doing the right things and you have the right strategies to sell your business for
(02:37):
the best price at a time that suits you.
And you get time and chance and opportunity to understand all the restrictions from acapital gains tax.
Where are you going to put your money?
How hard is your business?
How hard is your money going to be working for you when you sell it?
And what are you going to do when you're not working there?
So don't come to me and say, want to sell tomorrow.
(03:03):
Take your time.
Develop a sales plan.
That's my number one tip.
Sam, does it match yours?
I actually didn't have that on there.
And I really liked that because it is such an important place to start, isn't it, Sally?
Selling your business isn't an overnight thing.
It's not even six months.
It takes 12 months, 18 months, three years to sell your business.
(03:24):
You've got to get the whole business structure right.
And when we're looking at the valuation of the business, we've got two sides to theequation if we're going for the EBITDA multiple.
We've got the profit side and we've got the multiple side.
And I think...
What you touched on there is why do you want to sell?
And because that is generally one of the first questions that a potential buyer is goingto ask, why are they selling?
(03:51):
And there's often so many good reasons.
There really isn't a wrong answer with why you want to sell, but it does give some insightinto how the business is running.
If they've lost their energy, if they've lost their mojo, or they can't see.
the opportunity for that business to scale further, they just find it too overwhelming.
(04:12):
My first actually, Sally, on my list was to get a valuation done.
Because I think that from a valuation perspective, it gives you a clearer picture on whatyour business is currently worth, but also what things can you put in place so that you're
not missing out on hundreds of thousands of dollars when it comes to that sale.
(04:36):
I have that as number two.
So I'm not a registered business value.
I can't give you a to the cent number.
So I'm a broker and I can give you a market indication of the value of any of the practicethat you're looking to sell.
But I agree with Sam.
It is an idea at the beginning of your process to know where your business sits.
(04:58):
Find out, determine your EBITDA, your earnings before interest tax depreciation andmortisation.
And then look at your weighting factors as Sam indicated.
So it's going to be your profit multiple multiplied by the weighting factors, which willgive you the profit.
Sorry, your EBITDA multiplied by the weighting factors outcome, which gives you yourprofit multiple and your range price for your sale.
(05:20):
Now these weighting factors, might be where is your business located?
How long has it been established?
What is the risk profile of this business in particular?
What is the risk profile of the industry?
What are
What is the potential buyer demand?
So you can see some of these are black and white.
How long has it been established?
You can't fudge that.
(05:41):
Some of them are subjective.
What is the risk profile of this industry?
Out of five, it might be a four.
It might be a four and a quarter.
It might be a three and three quarters.
So there is a little bit of malleability and you can tweak those because it is going totweak your sales price.
You don't want to come up with a multiple that's just silly.
Like no one is going to pay 10 times.
(06:02):
um And you can just use those weighting factors in to tweak your sales price.
Some are subjective, some are black and white.
We come up then with a range price.
And then, know, right, I know now that without adding value, as Sam can allude to, withoutadding any value now, if I was to sell now, my business might sell for, say, $500,000.
(06:24):
But if I then have a plan and I have a business coach or a mentor to help me over the nextthree years,
and then I sell in 2029, my business might sell for an additional $250,000, for example.
And if that's going to go straight into your super, not registered to give a tax advice,please talk to your accountant.
(06:44):
But whatever you do with that money, it's going to be more.
So certainly have a look at what it's worth now.
Make a plan.
Think how long you're going to give yourself because you're developing a sales plan first.
And then in
X many number of years, how much will it be worth?
Is the juice worth the squeeze?
Maybe, maybe not.
(07:04):
But that's only an answer that you can come up with yourself once you've worked out whereyour goals are.
Yeah, certainly and building that expectation right at the start uh really heads off a lotof those uncomfortable discussions you have to have with the business owner of, well, I
want a million dollars and then the broker and also the buyers.
(07:28):
Yeah, exactly.
Yeah, and when we look at how a business is valued, particularly on the EBITDA multiple,the EBITDA, the profit is...
rear focus, it's looking at what is in the past, whereas the multiple is looking into thefuture.
And it's that multiple which really does provide the confidence to the buyer because atthe end of the day, the buyer is buying confidence that that business is going to continue
(07:56):
on or improve into the future.
Especially if you include a SWOT analysis, which I think we might come up with a chatabout later.
Well, number two on my list, Sally, is to clean up your financials.
Get in the backyard, tidy.
There we go.
(08:17):
You must say it's so often uh when a business owner comes to you, financials are indisarray, they've got personal expenses in there.
Their accountant has tried to do some, nice, fancy, creative accounting to minimise theprofitability in it.
But when you're minimizing the profitability, it is counter to what that valuation isgoing to be.
(08:41):
Yeah, so I say to business owners, I have to do exactly the opposite of what youraccountant has done.
So I need to undo what he's done, put a mirror on it and back everything out to work outwhat the real profit is, because we want to maximise your profit to maximise your sales
price.
The other thing that I've seen recently, Sam, is a business go from a partnership to aproprietary limited company partway through a year.
(09:09):
So we looked
If we looked three years in the rear, the 2023 year was a partnership, 2024 was acombination of a partnership and a proprietary limited company, and 2025 was a proprietary
limited company.
So it has taken me probably two months for a buyer's accountant and banker to becomecomfortable with what it is that they're seeing.
(09:37):
So potentially had that
business owner waited another two years until there was three years of financials thatwere all matching and easy to read and easy for all the third party advisors to understand
and get their heads around.
It may have taken less time.
But again, it goes back to what's your goals.
He wanted to retire now, his business owner doesn't.
(10:00):
We're on the market, but we do have an agreed contract now and we are going to thelawyers, which is great.
Excellent.
Right.
Now what's next on your list?
Let's see if we align still.
uh Legal and regulatory compliance.
Okay, that isn't on my list.
It is in a way, uh which is more about the IP side of things.
(10:23):
Obviously, legals and just like you highlighted there where you've got a partnershipmoving into a PTY LTD, the legal structures of the organisations, the legalities around
contracts with suppliers, employees, there's so many uh legal things that need to be tiedup.
(10:45):
Exactly.
The conversation I had before this one was it was a business owner wanting to think abouthis options to come to market.
And I said, can you tell me about your doctors?
Yes, we've got four and half full time equivalent.
None of them are on contracts.
I'm like, OK.
And I don't get why a lot of doctors don't want to sign contracts, because I was aroundworking with doctors when one of the large GP corporates had
(11:13):
242 internal legal cases with their own doctors that were trying to get out of bindingcontracts early or what they thought was on time and still not being able to leave.
So I get it that doctors don't want to sign contracts.
But with the current uh spotlight that we have on payroll tax and are you an employee orare you an independent contractor?
(11:35):
I think it's so important in this day and age to have the appropriate and correctcontracts.
for each of your people, be they independent contractors or employees, just to becompliant.
ah It's not just uh service agreements, it's also licences.
Do you have the right permits in place?
So I sold a business last year.
(11:56):
It was business and building last financial year and they built it.
I think they maybe bought off the plan, but they didn't have their OC, their occupationcertificate.
So they came to market without the right permits and approvals in place.
So that was another couple of months of delay and they were really tired.
They were ready to retire and it just delayed the whole process.
(12:20):
When it came to the time to be getting that council document, it was around Christmas, NewYear closes and the lawyers are gone.
They pack up and go to the beach from the middle of December and they don't come back tothe end of January.
So it's really difficult to get things done with councils or lawyers.
depending on the time of the year.
So it's so important to have all your regulatory compliance before you come to market.
(12:43):
Oh, yesterday I had a vendor.
ah He's still got two things on the PPSR of the business that he's selling and we're goingto contract.
So there's all these little things to think about.
So there is a lot and that's why you need a plan and a timeline because there's so manythings to get right before you come to market and you want to get one chance to do this.
(13:04):
So ideally make sure it's done perfectly.
Yep, excellent.
Now, next on my list is document your systems and processes, your SOPs, which really allowso much freedom within the business, but also structure in how the day to day operates.
Particularly if you're doing a task more than once a week, that really should be part ofan SOP, all of those repetitive tasks.
(13:30):
But it also makes it easy to bring new staff in, whether they're a doctor, whether they'rereceptionists, whether they're
people out in the field, the way that they operate day to day should be managed through agreat set of SOPs.
And if you want to scale your business, you can only scale with clarity and structure witha great set of standard operating procedures in place.
(13:57):
uh It's not on my list, Sam, I guess because it's in my space, it's almost a given.
If you're an accredited clinic, you have to have all those documents completed.
But it did come up during the practice success collective and also with the imaging uhgrow and scale that once you've created the perfect footprint, then you can grow and
(14:21):
scale.
So once you get it all documented, all the steps.
All the SOPs, as you said, ideal for training.
There's an amazing dental training system uh which all dentists can use and it's like eachone teach one.
So each one, each time a uh person is accredited and signed off as being able to do thatskill, then they become the trainer.
(14:44):
So everyone has a skill set that they're fantastic at.
Not everyone can do everything, but what you're great at, you train.
I really like that system.
All right, what's next on your list?
my next one is tax implications.
So doctors work, doctors, dentists, health, aged care, NDIS, the people that I supportwork so hard to get to where they are.
(15:06):
So many years of training, so much education, so much time, energy and effort.
So as I said, you want to get one chance to sell this business for the best possibleprice.
You don't want to lose half of it in tax.
So we touched on earlier, Sam, about the structure of your business.
Make sure that the structure
of your business that you're selling is set up to give you the best possible returns.
(15:30):
Make sure you think about your age and stage in life when it comes to sale time.
Talk to your accountant.
So have a dream team around you.
You need to have the best broker.
You need to have the best accountant.
You need to have the best lawyer.
So don't engage a criminal or a family court lawyer to do commercial work.
Equally, don't engage a
(15:54):
a bookkeeper to do, for example, supporting you doing a share sale of your company.
So make sure you've got the specialist in the field around you, because those taximplications can mean the difference of several hundred thousand dollars in your pocket
versus going to the ATO.
And it might be aligned with the dates of your birthday.
(16:19):
If it's business, if it's building, there's different implications.
So in order for you to maximise um the money in your pocket, please understand the taximplications when it comes time to sell by chatting with your accountant.
Again, I'm not registered to give you tax advice, but I strongly encourage you to go andchat with your accountant.
I love the constant drops of disclaimers in here, Sally.
(16:42):
Now, I think, yeah, I could imagine.
Now, it's very clear, Sally, from so far, we're only up to about number four on the list,but it's very clear that people need to prepare a long way out if they want to sell.
They need to be looking 18 months, three years ahead if they want to be in that positionto maximise their return.
(17:06):
Like you say, getting the dream team around you, getting the right advice in early on toensure that you've built this baby.
It's your pride and joy in a lot of cases.
And you spent years building your practice, building your business.
uh There's no point having the tax man take half of it or leaving so much on the tablebecause he didn't do the basics early on of
(17:35):
Things like getting your SOPs in, all your agreements and contracts, those kinds ofthings.
So that was actually my next one, getting the dream team around you, the right broker, theright legal counsel and specialist accountant to guide you through the sales process.
Was that on your list, Sam?
It is.
I've got engaged the right advisers early.
(17:56):
Yep, perfect.
Start talking.
um Generally, the initial conversations with anyone doesn't cost you anything.
So talk to people, get referrals.
Who did you use?
Were they great?
Were they ordinary?
Did they charge you?
So someone told me yesterday, Sally, I've started talking to a lawyer, but they'recharging me for every conversation, every email and every text message.
(18:18):
So yes, some lawyers will.
um Other lawyers will give you a fixed fee.
Talk to, I always say, ring three lawyers, ring three accountants if you don't have agreat one, ring three brokers, find the best one, find the specialist, find the one that
talks your language.
You want to work with someone that doesn't have the God complex.
You want to have someone that you can pick up the phone to and say, hey, this kept meawake last night.
(18:38):
Can you put some clarity on it for me?
They need to be approachable.
yeah, that's right.
And also, for example, working with someone like myself, a business coach who can work onthe profitability over the next 18 months, two years, but also working on the multiple
side of things of increasing that valuation and all the other advisors like theaccountants, like the lawyers who ensure that that value that you've created in that
(19:06):
business stays in your pocket.
All right.
What do you got next?
Marketing materials.
So creating a comprehensive marketing prospectus or information memorandum to help you toattract the potential buyers.
Now, I will we will get graphic designers to create this.
But if people start thinking, what are the selling points of my practice?
(19:29):
Then they can, with your help, grow those, enhance those.
And you do a SWOT analysis as part of your marketing brief.
So I started talking with a couple of doctors up in Brisbane.
They came to me with three documents like this.
Sally, we've had a crack.
We've put some things down on paper.
What do you think?
This is the history of the practice.
(19:49):
This is how it was.
This is what it was like when we bought it.
This is what it is now.
These are the important steps that we've undertaken during the last 25 years.
This is what it used to look like.
This is what it looks like now.
I said, that's a great base because that will give me a lot of information.
It will help the graphic designer to create something beautiful.
when we actually are ready to go to market.
And it gives you a sense of, I know when I write something down and you think about it,it's different to typing it.
(20:15):
If you're writing it, um think about what it is you're writing and then think about, isthat the best?
Is that the best way to sell my practice?
Could I rephrase that?
Could I change that?
Is time going to change that?
But certainly put down your thoughts on your business now.
Think about whether, so SWOT analysis is...
(20:37):
strengths, what are the strengths of your business?
You can list a few of those.
What are the weaknesses?
And then maybe with Sam's help, you might be able to reduce that list and they mightbecome strengths of the business.
What are the opportunities?
What can you galvanize?
What can you enact and start and finish between now and when you bring that business tomarket?
(20:57):
And you can actually implement some of those opportunities to add value.
Like we said, we're increasing the sales price.
Strengths, opportunities, weaknesses, threats.
So threats, who's your threat?
Can you do anything to mitigate that?
Can you bring them in?
Can you amalgamate?
Is there options to remove that threat altogether?
What can you do to protect yourself against that threat?
(21:20):
So even if it's a threat being something large like cyber security, what are you doingwith your staff?
Can you implement twice yearly cyber security education and training for them?
How can you make yourself, your business stronger?
yeah, preparing some marketing material before you come to market will give you an idea ofwhat you can change.
(21:42):
Yep, I definitely had an IM on my list.
And also a strong part of that is creating a compelling pitch deck.
And one of the greatest pitch decks ever written, I believe, is the Airbnb pitch deck.
You can go and Google it.
It's only about eight pages, 10 pages, but so compelling.
And one of the things that a lot of business owners overlook, I believe, Sally, is thatthey don't understand what their core values are because their core values
(22:10):
is really what drives a lot of their business, whether it's hiring, firing, the type ofcustomers they attract, the partnerships that they have, the messaging in their marketing,
but also that then starts to come through in the IM, in the pitch deck.
And when you've got a buyer who's aligning on the values, you're going to have a greater,more in-depth discussion.
(22:37):
but also they'll see more value in the business because they can picture themselvesstepping into the owner's shoes.
and might make for a quicker sale at a higher value because they can see it's beenunpacked for them.
um If you can remove red flags, like what we want to do is for buyers to see a glossybusiness they really want to acquire.
(22:59):
What we don't want is for a great buyer to look at it and all they see is red flags.
So if you can do anything, um help make the red flags go away.
Yep, definitely.
Now I had identify and resolve key risks, which touched on your SWOT analysis.
uh I think it's always important.
And this is what a business buyer is looking for.
(23:21):
They're looking for clarity and openness in the discussions.
If you're trying to hide something as the business owner, it's always going to throw upred flags.
And if you try and hide something, the business buyer is just going to think, well, gee,what else are they hiding?
Yep.
So being upfront with any of the key risks and not identifying them, I think that reallydoes detract from what the ultimate sale is going to be.
(23:53):
So I had addressed the key person risks as well, Sam, so we can agree on that one.
Identifying these allows you to mitigate them.
So the other thing I think that you could almost think in there is identify a key riskperson, but then have a plan or a succession plan for that person.
(24:14):
So you might have the most amazing practice manager, but they are reaching retirement ageand potentially sometime in the next.
three years, if you're getting a business ready to sell, they might take off uh and not bearound for a whole lot of time because they're using their long service leave before they
eventually in the fullness of time retire.
And then you need to have someone who can step into that role whilst they're on longservice leave and in preparedness for their retirement and transition out of the business.
(24:42):
Because a lot of the time we see practice managers who are
absolutely so fundamental in the clinic or business that you're selling.
If they retire and leave, if they have a heart attack, drop dead, if they get hit by abus, God willing, they don't.
What's happened with that IP?
If there's no one coming through, coming through the ranks, being trained, if there's noone being up skilled, if no one has been under that person's wing, then you've really got
(25:12):
a risk there.
If you don't identify and do something about it, then it's going to leave a massive holein your business.
And a lot of people don't know what the practice manager knows.
So same with your your lead GP, your practice principal or your clinical director.
Do you have uh an exit strategy for that person?
(25:34):
Do you have someone coming up behind them?
So certainly I say to people, look, you need to sack yourself before someone else does.
So if you're the only person that knows about everything, then you need to change that.
Yeah, and I think that this touches on a couple of points.
uh One of our points that we both agreed on was the standard operating procedures.
(25:57):
By having a very detailed standard operating procedures for the entire operation meansthat if any of these circumstances arise, a key person going on leave, for example, for an
extended period, then someone can step into their shoes and fulfill
the day to day.
(26:17):
uh But also securing key relationships and contracts as well.
And it's not just with your staff, it's with suppliers and customers.
And obviously, in your industry, in medical industry, Sally, GPs obviously aren't going tohave contracts with their customers, the patients.
(26:39):
But there is certainly a lot of other contracts that should be in place with things suchas suppliers.
lease agreements for one and any other any other supplies that are out there that are keyto the operations where you don't have an alternative for example your lease agreement you
don't have an alternative to that if you're running a bricks and mortar
(27:01):
Yeah, so in the last couple of years, we saw a uh worldwide shortage of carbon dioxide.
So one of the people that had to get the priority for that was the medical centres.
So make sure that you've got an agreement with your gas provider.
So that is something that can transfer across.
(27:21):
You don't think it's a big thing until you haven't got any.
So yeah, I agree with you, Sam.
exactly.
And securing these contracts early on in the process really then will give the buyer a lotof confidence and future in what the revenue is going to look like, the stability of that
revenue.
Because remember, the buyer is buying confidence.
(27:44):
They're not buying how you've performed the last three years.
They're buying how you believe you're going to perform in the next five, 10 years, howeverlong they own that operation.
Alright, what else have you got on your list?
Understanding your buyers motivation, which taps into exactly what you've just said then.
They want to see the potential of the business.
If you've done everything, if you've maximized the utilization of all your rooms, ifyou've done all of the things you possibly can to make this the best business ever,
(28:13):
they're going to look at it and go, well, how can I add value?
So think about what your buyer will be looking for.
Understand their goals and
what they value in a business.
And it may be buying a business that is set and forget if they're an investor and it's afully managed business, happy days.
(28:33):
But if you want to sell to a buyer that is going to come in and replace you as a clinicaldirector of your business and the lead supervisor of any junior doctors coming through the
FSP program or any of the other registered training programs, then that might not be what
Everyone wants.
(28:54):
So think about who do I want to sell to?
That should be part of your planning as well.
Do I want to sell to a corporate?
Do I want to sell to an entrepreneur?
Do I want to sell to a doctor by who's going to work in the clinic?
Because that might impact on the things that you're going to do with a business coachbefore you bring your business to market, for example.
(29:15):
Excellent, excellent.
uh One of the things that I've got on my list, Sally, is to tidy up your premises andassets.
Because too often, I think, I do feel that the workplace is a great reflection of how abusiness is run.
And you would see it many times.
The waiting room might be tidy, but if you go out the back, it's an absolute disarray.
(29:39):
And that is a clear indication, usually, of how that business is run.
Sam, I remember once I went into a clinic and it had an orange carpet and it had plasticrolled out walkways.
So it was directing you where to walk on the plastic over the orange carpet and everythingwas in filing cabinets.
(30:00):
So they hadn't migrated across using um online practice management software.
So I walked in and it was straight away red flag and I said, maybe I'm not the best brokerfor your business.
I'm sorry, I don't think I can help you.
Because no one is going to buy that.
You know, I've been into clinics where the wallpaper has been ripped off by the kids thathave been sitting in the waiting room on all the chairs which are mismatched that they
(30:25):
look like have come from garage sales.
I've been into clinics.
I've been selling one at the moment.
ah It's like having a step back in time to some of these clinics.
And I say to people, I want you to look at the clinic as if it was Sally's eyes.
What would Sally say?
So is it grubby?
Does it have dead pop plants in it?
Is everything mismatched?
(30:47):
Does it present beautifully?
Do you have rooms full of stock you don't need?
Do you have rooms full of old hanging patient files?
Can we get them out of here?
Can we get them scanned?
Look, this is again back to step number one, develop your plan because it takes time toscan an old patient file, have it on the cloud.
(31:09):
Are you going to have it on the cloud or is it going to be stored on-prem?
Think about your IT.
So there's so many things to think about.
Do I have enough capacity to store all these old patient files, which I need to keepbecause I had a lot of pediatric patients and I need to keep them for X many years longer
than a regular patient?
So yeah, there's so much to think about, Sam.
(31:31):
Yeah.
And I think it's always important for the business owner to put themselves in the shoes ofthe buyer and looking at it from their perspective.
If I was going to buy this business, would I?
And I think that quite often when you can shift the focus and change your thought, yourmindset in, okay, if I'm the buyer, would I buy this?
(31:56):
What would I change?
What's throwing up red flags?
That
there alone can really help the buyer understand their business a lot better.
The vendor.
vendors when they're coming to me with a perhaps an unrealistic price, I've said to peoplemultiple times in the past, would you buy your business for that sales price?
(32:18):
And then I think about it, there's a lot of silence and I've had some people go, maybe.
But if you can reframe, there's a lot of value in that.
Yeah.
Now, one thing on my list, Sally, is to remove the owner dependency.
And it's, it is the holy grail because when you can remove the owner from the day to day,when you can have a truly owner independent business, it opens the business up to a lot
(32:48):
more different types of buyers.
You've not just got the, the practitioner, the mechanic.
You've also got then the investors who are looking to buy that business.
Yeah, yeah.
So I mentioned that earlier, sack yourself before someone else does.
And I had a vendor very successfully, he said to me, I would go away and I would takeholidays and I would find out what my people couldn't do without me being there.
(33:13):
And then I would address that.
And then I'd go on holidays again and then something else would happen.
And then I'd address that.
So it was important way of him being able to replace himself.
ah before he sold his business, which he did very successfully for a very good price at avery high profit multiple.
So there's a lot of value in what you just said, Sam, yes.
(33:35):
Excellent, excellent.
Now, I think it's important to point out there are different valuation methods forbusinesses, but for the majority of businesses, they're getting valued on profit times a
multiple because they're generally a steady state business.
There might be increases, say 10, 20 % in revenue year on year.
(33:57):
But if you can increase your profit by say $100,000 and you've got a multiple of
three, for example, yeah, you there's another $300,000, in value.
Now, if we can then increase the multiple again, by improving the confidence and reducingthe risk in that sale to the buyer, we can quite easily be adding even more hundreds of
(34:24):
thousands of dollars onto that business through things like everything we've been speakingabout, SOPs, contracts.
Mm.
Mm.
Mm.
Mm.
And I think too many business owners neglect to see that they're leaving a lot of money onthe table.
And another good thing to tie into that is do an appraisal first and then keep doingannual appraisals.
(34:51):
Sally, can you update my appraisal?
I've got my new year's numbers ready, new financial year.
So it's easy to just add another year and then we can look at, yeah, I'm growing in thatdirection.
Actually, your income is growing, but your expenses are not being addressed.
So you need to.
As you grow your income, really need to focus on those expenses.
(35:13):
And here's the line that's growing the most.
um What can we do about that?
How can we tackle that?
Alright, have you got anything else on your list, Sally?
Yes?
is consider employee and customer impact.
So you're thinking about how you're going to communicate the style to employees andcustomers to ensure a smooth transition.
Now, if it's a share sale, uh the only thing that changes is the directors and people maynot know that there's been a change at all.
(35:41):
If it is a business sale of assets being the goodwill of the practice, the goodwill of thepractitioners, as well as any plant and equipment, then yes, people will know.
I had a conversation earlier this week with a business owner who owned an NDIS businessand she felt that if she was no longer there, some of her participants would go elsewhere.
(36:04):
So think about, and this goes back to the key person risk, how are you going to be able tohave that conversation with participants or patients or customers?
And is it going to be negative or positive?
And is there anything you can do to mitigate that before the time happens?
Yeah, I agree with that.
And I think there's a couple of things that lead into this is firstly, establishing yourcore values.
(36:30):
And if you have a buyer who is aligned with the values of the business, the transition isgoing to be a lot easier.
But also something that we just touched upon was making the business owner independent.
So that...
The risk in the transactions of suppliers and customers walking away is greatly reduced.
(36:55):
And clearly defined core values is going to provide so much greater loyalty from allsides, suppliers, customers, and employees.
When everybody is aligned, they're all part of that shared vision of, what gets us up dayto day?
How does this business operate?
(37:16):
What do we stand for?
What do we hate?
What do we like?
Once you've got a real entrenched set of core values, it's going to provide so muchgreater value at that ultimate sale time.
I agree on all those points.
And while you were chatting then, Sam, I just thought of two other things that I wanted tobring up just before we finish today.
(37:38):
ah Have your contracts current.
So don't come to sell your business without having current contracts.
So I lost a big sale last year because they had five contracts.
ah Three of them weren't current and they were waiting on clinical directors or clinicalheads of hospitals.
(37:59):
private hospitals who were in a state of flux to be able to get to that document.
So don't become because we don't have any value if there's no contract signed.
And this goes back to your legal and regulatory compliance without signed contracts.
You don't have anything to sell.
And the final thing was workers comp.
(38:20):
If you've got workers comp in your business and you're having a share sale, then it's ared flag again.
So that just goes, I guess, to key person risks.
If you've got a workers comp person, um get that person well, get them back to work ortransition them out of the business, ideally before it comes to market.
(38:43):
Again, it's just another red flag we can do without.
Excellent.
Thank you very much, Sally.
Well, Sally, I reckon we align pretty well.
What do you think?
uh And it's great seeing your list from the broker's perspective and my list from thebusiness coach's perspective.
We're both looking at businesses from a different lens, but at the end of the day, thealignment is absolutely fantastic and it just works.
(39:10):
Sally, as always, this has been gold.
I love that even though our lists overlap in a lot of areas, you've brought in some realbroker specific insights that most business owners probably wouldn't even think about
until it's too late.
Now, for those listening, remember, selling a business isn't just about finding a buyer,it's about making your business irresistible to the right buyer.
(39:33):
And that starts well before you hit the market.
Now, Sally.
Where's the best place for people to connect with you if they're thinking about selling?
Sure.
So I'm on LinkedIn, Sally Stuart, S-T-U-A-R-T.
You can call me, you can email me, sally.stuart@linkbusiness.com.au,sally.stuart888@gmail.com or 04 370 820 45.
(39:59):
I look forward to hearing from you soon.
Fantastic.
And I'll put all of those details of Sally's into the show notes along with both ourchecklist so you can start working through them today.
Now, if you found this episode valuable, make sure you hit follow on your podcast app soyou don't miss the next one.
And if you know a business owner who's thinking about selling in the next couple of years,please send them this episode.
(40:22):
could be worth hundreds of thousands of dollars to them.
Until next time, I'm Sam Penny, and this has been Built To Sell, Built To Buy, helping yousell smart.
buy right and build something extraordinary.
Welcome back to Built to Sell, Built to Buy, the show where we take you inside the dealmaking world, whether you're preparing to sell your business or looking to buy one the
smart way.
I'm your host, Sam Penny.
And today we've got one of my favourite guests.
She's returning.
It's business broker extraordinaire, Sally Stuart.
Now today's episode, it's a little bit different.
(00:20):
We're going to go head to head or maybe list to list.
We're talking about the brokers checklist.
10 things to do before you list your business.
I've put together my top 10.
These are the must do's I think from my perspective before taking your business to market.
And Sally's done the same from her years of experience selling companies across Australia.
(00:41):
We're going to compare, debate and unpack each point.
So by the end of this episode, you'll have a clear actionable blueprint for getting yourbusiness sale ready and maximising your valuation in the process.
So let's dive in.
Let's see where our lists match.
and where we might disagree.
Sally, welcome.
Thank you for the kind introduction.
(01:01):
think it's a great topic and a great way to unpack actually what are the main top 10.
Excellent.
Now, before we dive in, a quick intro.
Sally, who are you?
What do do?
Sure, so thanks.
I'm Sally Stuart I'm a specialist business broker.
I only work with Drs Dentists Allied Health, Aged Care and NDIS business owners.
(01:23):
When it comes time for them to sell because they want to buy bigger, buy smaller, retire,maybe they've had a partnership breakdown at home or in the workplace and it's time for
them to sell.
I'm the deal facilitator so I can help their dreams come true so long as they've got agoal to work towards which is what my first point is, Sam.
(01:44):
So people need to have a reason to sell.
And sometimes it's not till their backs to the wall.
They get sick.
Someone suddenly passes away or there's a breakdown.
Don't wait.
So develop a sales plan.
That would be my first point.
You need to define your why.
Why do I want to sell?
What is your goal?
What do I want to do after the settlement when I hand my keys over?
(02:08):
What will the future look like?
Once you've defined your goals and your why,
you need to then understand the market and establish some timelines to allow you to reachthat goal.
Now you might say, well, at that stage and age in my life, I'm going to be 60.
Can I retire then?
This gives you time to work with your financial advisor and planner to make sure thatyou're doing the right things and you have the right strategies to sell your business for
(02:37):
the best price at a time that suits you.
And you get time and chance and opportunity to understand all the restrictions from acapital gains tax.
Where are you going to put your money?
How hard is your business?
How hard is your money going to be working for you when you sell it?
And what are you going to do when you're not working there?
So don't come to me and say, want to sell tomorrow.
(03:03):
Take your time.
Develop a sales plan.
That's my number one tip.
Sam, does it match yours?
I actually didn't have that on there.
And I really liked that because it is such an important place to start, isn't it, Sally?
Selling your business isn't an overnight thing.
It's not even six months.
It takes 12 months, 18 months, three years to sell your business.
(03:24):
You've got to get the whole business structure right.
And when we're looking at the valuation of the business, we've got two sides to theequation if we're going for the EBITDA multiple.
We've got the profit side and we've got the multiple side.
And I think...
What you touched on there is why do you want to sell?
And because that is generally one of the first questions that a potential buyer is goingto ask, why are they selling?
(03:51):
And there's often so many good reasons.
There really isn't a wrong answer with why you want to sell, but it does give some insightinto how the business is running.
If they've lost their energy, if they've lost their mojo, or they can't see.
the opportunity for that business to scale further, they just find it too overwhelming.
(04:12):
My first actually, Sally, on my list was to get a valuation done.
Because I think that from a valuation perspective, it gives you a clearer picture on whatyour business is currently worth, but also what things can you put in place so that you're
not missing out on hundreds of thousands of dollars when it comes to that sale.
(04:36):
I have that as number two.
So I'm not a registered business value.
I can't give you a to the cent number.
So I'm a broker and I can give you a market indication of the value of any of the practicethat you're looking to sell.
But I agree with Sam.
It is an idea at the beginning of your process to know where your business sits.
(04:58):
Find out, determine your EBITDA, your earnings before interest tax depreciation andmortisation.
And then look at your weighting factors as Sam indicated.
So it's going to be your profit multiple multiplied by the weighting factors, which willgive you the profit.
Sorry, your EBITDA multiplied by the weighting factors outcome, which gives you yourprofit multiple and your range price for your sale.
(05:20):
Now these weighting factors, might be where is your business located?
How long has it been established?
What is the risk profile of this business in particular?
What is the risk profile of the industry?
What are
What is the potential buyer demand?
So you can see some of these are black and white.
How long has it been established?
You can't fudge that.
(05:41):
Some of them are subjective.
What is the risk profile of this industry?
Out of five, it might be a four.
It might be a four and a quarter.
It might be a three and three quarters.
So there is a little bit of malleability and you can tweak those because it is going totweak your sales price.
You don't want to come up with a multiple that's just silly.
Like no one is going to pay 10 times.
(06:02):
um And you can just use those weighting factors in to tweak your sales price.
Some are subjective, some are black and white.
We come up then with a range price.
And then, know, right, I know now that without adding value, as Sam can allude to, withoutadding any value now, if I was to sell now, my business might sell for, say, $500,000.
(06:24):
But if I then have a plan and I have a business coach or a mentor to help me over the nextthree years,
and then I sell in 2029, my business might sell for an additional $250,000, for example.
And if that's going to go straight into your super, not registered to give a tax advice,please talk to your accountant.
(06:44):
But whatever you do with that money, it's going to be more.
So certainly have a look at what it's worth now.
Make a plan.
Think how long you're going to give yourself because you're developing a sales plan first.
And then in
X many number of years, how much will it be worth?
Is the juice worth the squeeze?
Maybe, maybe not.
(07:04):
But that's only an answer that you can come up with yourself once you've worked out whereyour goals are.
Yeah, certainly and building that expectation right at the start uh really heads off a lotof those uncomfortable discussions you have to have with the business owner of, well, I
want a million dollars and then the broker and also the buyers.
(07:28):
Yeah, exactly.
Yeah, and when we look at how a business is valued, particularly on the EBITDA multiple,the EBITDA, the profit is...
rear focus, it's looking at what is in the past, whereas the multiple is looking into thefuture.
And it's that multiple which really does provide the confidence to the buyer because atthe end of the day, the buyer is buying confidence that that business is going to continue
(07:56):
on or improve into the future.
Especially if you include a SWOT analysis, which I think we might come up with a chatabout later.
Well, number two on my list, Sally, is to clean up your financials.
Get in the backyard, tidy.
There we go.
(08:17):
You must say it's so often uh when a business owner comes to you, financials are indisarray, they've got personal expenses in there.
Their accountant has tried to do some, nice, fancy, creative accounting to minimise theprofitability in it.
But when you're minimizing the profitability, it is counter to what that valuation isgoing to be.
(08:41):
Yeah, so I say to business owners, I have to do exactly the opposite of what youraccountant has done.
So I need to undo what he's done, put a mirror on it and back everything out to work outwhat the real profit is, because we want to maximise your profit to maximise your sales
price.
The other thing that I've seen recently, Sam, is a business go from a partnership to aproprietary limited company partway through a year.
(09:09):
So we looked
If we looked three years in the rear, the 2023 year was a partnership, 2024 was acombination of a partnership and a proprietary limited company, and 2025 was a proprietary
limited company.
So it has taken me probably two months for a buyer's accountant and banker to becomecomfortable with what it is that they're seeing.
(09:37):
So potentially had that
business owner waited another two years until there was three years of financials thatwere all matching and easy to read and easy for all the third party advisors to understand
and get their heads around.
It may have taken less time.
But again, it goes back to what's your goals.
He wanted to retire now, his business owner doesn't.
(10:00):
We're on the market, but we do have an agreed contract now and we are going to thelawyers, which is great.
Excellent.
Right.
Now what's next on your list?
Let's see if we align still.
uh Legal and regulatory compliance.
Okay, that isn't on my list.
It is in a way, uh which is more about the IP side of things.
(10:23):
Obviously, legals and just like you highlighted there where you've got a partnershipmoving into a PTY LTD, the legal structures of the organisations, the legalities around
contracts with suppliers, employees, there's so many uh legal things that need to be tiedup.
(10:45):
Exactly.
The conversation I had before this one was it was a business owner wanting to think abouthis options to come to market.
And I said, can you tell me about your doctors?
Yes, we've got four and half full time equivalent.
None of them are on contracts.
I'm like, OK.
And I don't get why a lot of doctors don't want to sign contracts, because I was aroundworking with doctors when one of the large GP corporates had
(11:13):
242 internal legal cases with their own doctors that were trying to get out of bindingcontracts early or what they thought was on time and still not being able to leave.
So I get it that doctors don't want to sign contracts.
But with the current uh spotlight that we have on payroll tax and are you an employee orare you an independent contractor?
(11:35):
I think it's so important in this day and age to have the appropriate and correctcontracts.
for each of your people, be they independent contractors or employees, just to becompliant.
ah It's not just uh service agreements, it's also licences.
Do you have the right permits in place?
So I sold a business last year.
(11:56):
It was business and building last financial year and they built it.
I think they maybe bought off the plan, but they didn't have their OC, their occupationcertificate.
So they came to market without the right permits and approvals in place.
So that was another couple of months of delay and they were really tired.
They were ready to retire and it just delayed the whole process.
(12:20):
When it came to the time to be getting that council document, it was around Christmas, NewYear closes and the lawyers are gone.
They pack up and go to the beach from the middle of December and they don't come back tothe end of January.
So it's really difficult to get things done with councils or lawyers.
depending on the time of the year.
So it's so important to have all your regulatory compliance before you come to market.
(12:43):
Oh, yesterday I had a vendor.
ah He's still got two things on the PPSR of the business that he's selling and we're goingto contract.
So there's all these little things to think about.
So there is a lot and that's why you need a plan and a timeline because there's so manythings to get right before you come to market and you want to get one chance to do this.
(13:04):
So ideally make sure it's done perfectly.
Yep, excellent.
Now, next on my list is document your systems and processes, your SOPs, which really allowso much freedom within the business, but also structure in how the day to day operates.
Particularly if you're doing a task more than once a week, that really should be part ofan SOP, all of those repetitive tasks.
(13:30):
But it also makes it easy to bring new staff in, whether they're a doctor, whether they'rereceptionists, whether they're
people out in the field, the way that they operate day to day should be managed through agreat set of SOPs.
And if you want to scale your business, you can only scale with clarity and structure witha great set of standard operating procedures in place.
(13:57):
uh It's not on my list, Sam, I guess because it's in my space, it's almost a given.
If you're an accredited clinic, you have to have all those documents completed.
But it did come up during the practice success collective and also with the imaging uhgrow and scale that once you've created the perfect footprint, then you can grow and
(14:21):
scale.
So once you get it all documented, all the steps.
All the SOPs, as you said, ideal for training.
There's an amazing dental training system uh which all dentists can use and it's like eachone teach one.
So each one, each time a uh person is accredited and signed off as being able to do thatskill, then they become the trainer.
(14:44):
So everyone has a skill set that they're fantastic at.
Not everyone can do everything, but what you're great at, you train.
I really like that system.
All right, what's next on your list?
my next one is tax implications.
So doctors work, doctors, dentists, health, aged care, NDIS, the people that I supportwork so hard to get to where they are.
(15:06):
So many years of training, so much education, so much time, energy and effort.
So as I said, you want to get one chance to sell this business for the best possibleprice.
You don't want to lose half of it in tax.
So we touched on earlier, Sam, about the structure of your business.
Make sure that the structure
of your business that you're selling is set up to give you the best possible returns.
(15:30):
Make sure you think about your age and stage in life when it comes to sale time.
Talk to your accountant.
So have a dream team around you.
You need to have the best broker.
You need to have the best accountant.
You need to have the best lawyer.
So don't engage a criminal or a family court lawyer to do commercial work.
Equally, don't engage a
(15:54):
a bookkeeper to do, for example, supporting you doing a share sale of your company.
So make sure you've got the specialist in the field around you, because those taximplications can mean the difference of several hundred thousand dollars in your pocket
versus going to the ATO.
And it might be aligned with the dates of your birthday.
(16:19):
If it's business, if it's building, there's different implications.
So in order for you to maximise um the money in your pocket, please understand the taximplications when it comes time to sell by chatting with your accountant.
Again, I'm not registered to give you tax advice, but I strongly encourage you to go andchat with your accountant.
I love the constant drops of disclaimers in here, Sally.
(16:42):
Now, I think, yeah, I could imagine.
Now, it's very clear, Sally, from so far, we're only up to about number four on the list,but it's very clear that people need to prepare a long way out if they want to sell.
They need to be looking 18 months, three years ahead if they want to be in that positionto maximise their return.
(17:06):
Like you say, getting the dream team around you, getting the right advice in early on toensure that you've built this baby.
It's your pride and joy in a lot of cases.
And you spent years building your practice, building your business.
uh There's no point having the tax man take half of it or leaving so much on the tablebecause he didn't do the basics early on of
(17:35):
Things like getting your SOPs in, all your agreements and contracts, those kinds ofthings.
So that was actually my next one, getting the dream team around you, the right broker, theright legal counsel and specialist accountant to guide you through the sales process.
Was that on your list, Sam?
It is.
I've got engaged the right advisers early.
(17:56):
Yep, perfect.
Start talking.
um Generally, the initial conversations with anyone doesn't cost you anything.
So talk to people, get referrals.
Who did you use?
Were they great?
Were they ordinary?
Did they charge you?
So someone told me yesterday, Sally, I've started talking to a lawyer, but they'recharging me for every conversation, every email and every text message.
(18:18):
So yes, some lawyers will.
um Other lawyers will give you a fixed fee.
Talk to, I always say, ring three lawyers, ring three accountants if you don't have agreat one, ring three brokers, find the best one, find the specialist, find the one that
talks your language.
You want to work with someone that doesn't have the God complex.
You want to have someone that you can pick up the phone to and say, hey, this kept meawake last night.
(18:38):
Can you put some clarity on it for me?
They need to be approachable.
yeah, that's right.
And also, for example, working with someone like myself, a business coach who can work onthe profitability over the next 18 months, two years, but also working on the multiple
side of things of increasing that valuation and all the other advisors like theaccountants, like the lawyers who ensure that that value that you've created in that
(19:06):
business stays in your pocket.
All right.
What do you got next?
Marketing materials.
So creating a comprehensive marketing prospectus or information memorandum to help you toattract the potential buyers.
Now, I will we will get graphic designers to create this.
But if people start thinking, what are the selling points of my practice?
(19:29):
Then they can, with your help, grow those, enhance those.
And you do a SWOT analysis as part of your marketing brief.
So I started talking with a couple of doctors up in Brisbane.
They came to me with three documents like this.
Sally, we've had a crack.
We've put some things down on paper.
What do you think?
This is the history of the practice.
(19:49):
This is how it was.
This is what it was like when we bought it.
This is what it is now.
These are the important steps that we've undertaken during the last 25 years.
This is what it used to look like.
This is what it looks like now.
I said, that's a great base because that will give me a lot of information.
It will help the graphic designer to create something beautiful.
when we actually are ready to go to market.
And it gives you a sense of, I know when I write something down and you think about it,it's different to typing it.
(20:15):
If you're writing it, um think about what it is you're writing and then think about, isthat the best?
Is that the best way to sell my practice?
Could I rephrase that?
Could I change that?
Is time going to change that?
But certainly put down your thoughts on your business now.
Think about whether, so SWOT analysis is...
(20:37):
strengths, what are the strengths of your business?
You can list a few of those.
What are the weaknesses?
And then maybe with Sam's help, you might be able to reduce that list and they mightbecome strengths of the business.
What are the opportunities?
What can you galvanize?
What can you enact and start and finish between now and when you bring that business tomarket?
(20:57):
And you can actually implement some of those opportunities to add value.
Like we said, we're increasing the sales price.
Strengths, opportunities, weaknesses, threats.
So threats, who's your threat?
Can you do anything to mitigate that?
Can you bring them in?
Can you amalgamate?
Is there options to remove that threat altogether?
What can you do to protect yourself against that threat?
(21:20):
So even if it's a threat being something large like cyber security, what are you doingwith your staff?
Can you implement twice yearly cyber security education and training for them?
How can you make yourself, your business stronger?
yeah, preparing some marketing material before you come to market will give you an idea ofwhat you can change.
(21:42):
Yep, I definitely had an IM on my list.
And also a strong part of that is creating a compelling pitch deck.
And one of the greatest pitch decks ever written, I believe, is the Airbnb pitch deck.
You can go and Google it.
It's only about eight pages, 10 pages, but so compelling.
And one of the things that a lot of business owners overlook, I believe, Sally, is thatthey don't understand what their core values are because their core values
(22:10):
is really what drives a lot of their business, whether it's hiring, firing, the type ofcustomers they attract, the partnerships that they have, the messaging in their marketing,
but also that then starts to come through in the IM, in the pitch deck.
And when you've got a buyer who's aligning on the values, you're going to have a greater,more in-depth discussion.
(22:37):
but also they'll see more value in the business because they can picture themselvesstepping into the owner's shoes.
and might make for a quicker sale at a higher value because they can see it's beenunpacked for them.
um If you can remove red flags, like what we want to do is for buyers to see a glossybusiness they really want to acquire.
(22:59):
What we don't want is for a great buyer to look at it and all they see is red flags.
So if you can do anything, um help make the red flags go away.
Yep, definitely.
Now I had identify and resolve key risks, which touched on your SWOT analysis.
uh I think it's always important.
And this is what a business buyer is looking for.
(23:21):
They're looking for clarity and openness in the discussions.
If you're trying to hide something as the business owner, it's always going to throw upred flags.
And if you try and hide something, the business buyer is just going to think, well, gee,what else are they hiding?
Yep.
So being upfront with any of the key risks and not identifying them, I think that reallydoes detract from what the ultimate sale is going to be.
(23:53):
So I had addressed the key person risks as well, Sam, so we can agree on that one.
Identifying these allows you to mitigate them.
So the other thing I think that you could almost think in there is identify a key riskperson, but then have a plan or a succession plan for that person.
(24:14):
So you might have the most amazing practice manager, but they are reaching retirement ageand potentially sometime in the next.
three years, if you're getting a business ready to sell, they might take off uh and not bearound for a whole lot of time because they're using their long service leave before they
eventually in the fullness of time retire.
And then you need to have someone who can step into that role whilst they're on longservice leave and in preparedness for their retirement and transition out of the business.
(24:42):
Because a lot of the time we see practice managers who are
absolutely so fundamental in the clinic or business that you're selling.
If they retire and leave, if they have a heart attack, drop dead, if they get hit by abus, God willing, they don't.
What's happened with that IP?
If there's no one coming through, coming through the ranks, being trained, if there's noone being up skilled, if no one has been under that person's wing, then you've really got
(25:12):
a risk there.
If you don't identify and do something about it, then it's going to leave a massive holein your business.
And a lot of people don't know what the practice manager knows.
So same with your your lead GP, your practice principal or your clinical director.
Do you have uh an exit strategy for that person?
(25:34):
Do you have someone coming up behind them?
So certainly I say to people, look, you need to sack yourself before someone else does.
So if you're the only person that knows about everything, then you need to change that.
Yeah, and I think that this touches on a couple of points.
uh One of our points that we both agreed on was the standard operating procedures.
(25:57):
By having a very detailed standard operating procedures for the entire operation meansthat if any of these circumstances arise, a key person going on leave, for example, for an
extended period, then someone can step into their shoes and fulfill
the day to day.
(26:17):
uh But also securing key relationships and contracts as well.
And it's not just with your staff, it's with suppliers and customers.
And obviously, in your industry, in medical industry, Sally, GPs obviously aren't going tohave contracts with their customers, the patients.
(26:39):
But there is certainly a lot of other contracts that should be in place with things suchas suppliers.
lease agreements for one and any other any other supplies that are out there that are keyto the operations where you don't have an alternative for example your lease agreement you
don't have an alternative to that if you're running a bricks and mortar
(27:01):
Yeah, so in the last couple of years, we saw a uh worldwide shortage of carbon dioxide.
So one of the people that had to get the priority for that was the medical centres.
So make sure that you've got an agreement with your gas provider.
So that is something that can transfer across.
(27:21):
You don't think it's a big thing until you haven't got any.
So yeah, I agree with you, Sam.
exactly.
And securing these contracts early on in the process really then will give the buyer a lotof confidence and future in what the revenue is going to look like, the stability of that
revenue.
Because remember, the buyer is buying confidence.
(27:44):
They're not buying how you've performed the last three years.
They're buying how you believe you're going to perform in the next five, 10 years, howeverlong they own that operation.
Alright, what else have you got on your list?
Understanding your buyers motivation, which taps into exactly what you've just said then.
They want to see the potential of the business.
If you've done everything, if you've maximized the utilization of all your rooms, ifyou've done all of the things you possibly can to make this the best business ever,
(28:13):
they're going to look at it and go, well, how can I add value?
So think about what your buyer will be looking for.
Understand their goals and
what they value in a business.
And it may be buying a business that is set and forget if they're an investor and it's afully managed business, happy days.
(28:33):
But if you want to sell to a buyer that is going to come in and replace you as a clinicaldirector of your business and the lead supervisor of any junior doctors coming through the
FSP program or any of the other registered training programs, then that might not be what
Everyone wants.
(28:54):
So think about who do I want to sell to?
That should be part of your planning as well.
Do I want to sell to a corporate?
Do I want to sell to an entrepreneur?
Do I want to sell to a doctor by who's going to work in the clinic?
Because that might impact on the things that you're going to do with a business coachbefore you bring your business to market, for example.
(29:15):
Excellent, excellent.
uh One of the things that I've got on my list, Sally, is to tidy up your premises andassets.
Because too often, I think, I do feel that the workplace is a great reflection of how abusiness is run.
And you would see it many times.
The waiting room might be tidy, but if you go out the back, it's an absolute disarray.
(29:39):
And that is a clear indication, usually, of how that business is run.
Sam, I remember once I went into a clinic and it had an orange carpet and it had plasticrolled out walkways.
So it was directing you where to walk on the plastic over the orange carpet and everythingwas in filing cabinets.
(30:00):
So they hadn't migrated across using um online practice management software.
So I walked in and it was straight away red flag and I said, maybe I'm not the best brokerfor your business.
I'm sorry, I don't think I can help you.
Because no one is going to buy that.
You know, I've been into clinics where the wallpaper has been ripped off by the kids thathave been sitting in the waiting room on all the chairs which are mismatched that they
(30:25):
look like have come from garage sales.
I've been into clinics.
I've been selling one at the moment.
ah It's like having a step back in time to some of these clinics.
And I say to people, I want you to look at the clinic as if it was Sally's eyes.
What would Sally say?
So is it grubby?
Does it have dead pop plants in it?
Is everything mismatched?
(30:47):
Does it present beautifully?
Do you have rooms full of stock you don't need?
Do you have rooms full of old hanging patient files?
Can we get them out of here?
Can we get them scanned?
Look, this is again back to step number one, develop your plan because it takes time toscan an old patient file, have it on the cloud.
(31:09):
Are you going to have it on the cloud or is it going to be stored on-prem?
Think about your IT.
So there's so many things to think about.
Do I have enough capacity to store all these old patient files, which I need to keepbecause I had a lot of pediatric patients and I need to keep them for X many years longer
than a regular patient?
So yeah, there's so much to think about, Sam.
(31:31):
Yeah.
And I think it's always important for the business owner to put themselves in the shoes ofthe buyer and looking at it from their perspective.
If I was going to buy this business, would I?
And I think that quite often when you can shift the focus and change your thought, yourmindset in, okay, if I'm the buyer, would I buy this?
(31:56):
What would I change?
What's throwing up red flags?
That
there alone can really help the buyer understand their business a lot better.
The vendor.
vendors when they're coming to me with a perhaps an unrealistic price, I've said to peoplemultiple times in the past, would you buy your business for that sales price?
(32:18):
And then I think about it, there's a lot of silence and I've had some people go, maybe.
But if you can reframe, there's a lot of value in that.
Yeah.
Now, one thing on my list, Sally, is to remove the owner dependency.
And it's, it is the holy grail because when you can remove the owner from the day to day,when you can have a truly owner independent business, it opens the business up to a lot
(32:48):
more different types of buyers.
You've not just got the, the practitioner, the mechanic.
You've also got then the investors who are looking to buy that business.
Yeah, yeah.
So I mentioned that earlier, sack yourself before someone else does.
And I had a vendor very successfully, he said to me, I would go away and I would takeholidays and I would find out what my people couldn't do without me being there.
(33:13):
And then I would address that.
And then I'd go on holidays again and then something else would happen.
And then I'd address that.
So it was important way of him being able to replace himself.
ah before he sold his business, which he did very successfully for a very good price at avery high profit multiple.
So there's a lot of value in what you just said, Sam, yes.
(33:35):
Excellent, excellent.
Now, I think it's important to point out there are different valuation methods forbusinesses, but for the majority of businesses, they're getting valued on profit times a
multiple because they're generally a steady state business.
There might be increases, say 10, 20 % in revenue year on year.
(33:57):
But if you can increase your profit by say $100,000 and you've got a multiple of
three, for example, yeah, you there's another $300,000, in value.
Now, if we can then increase the multiple again, by improving the confidence and reducingthe risk in that sale to the buyer, we can quite easily be adding even more hundreds of
(34:24):
thousands of dollars onto that business through things like everything we've been speakingabout, SOPs, contracts.
Mm.
Mm.
Mm.
Mm.
And I think too many business owners neglect to see that they're leaving a lot of money onthe table.
And another good thing to tie into that is do an appraisal first and then keep doingannual appraisals.
(34:51):
Sally, can you update my appraisal?
I've got my new year's numbers ready, new financial year.
So it's easy to just add another year and then we can look at, yeah, I'm growing in thatdirection.
Actually, your income is growing, but your expenses are not being addressed.
So you need to.
As you grow your income, really need to focus on those expenses.
(35:13):
And here's the line that's growing the most.
um What can we do about that?
How can we tackle that?
Alright, have you got anything else on your list, Sally?
Yes?
is consider employee and customer impact.
So you're thinking about how you're going to communicate the style to employees andcustomers to ensure a smooth transition.
Now, if it's a share sale, uh the only thing that changes is the directors and people maynot know that there's been a change at all.
(35:41):
If it is a business sale of assets being the goodwill of the practice, the goodwill of thepractitioners, as well as any plant and equipment, then yes, people will know.
I had a conversation earlier this week with a business owner who owned an NDIS businessand she felt that if she was no longer there, some of her participants would go elsewhere.
(36:04):
So think about, and this goes back to the key person risk, how are you going to be able tohave that conversation with participants or patients or customers?
And is it going to be negative or positive?
And is there anything you can do to mitigate that before the time happens?
Yeah, I agree with that.
And I think there's a couple of things that lead into this is firstly, establishing yourcore values.
(36:30):
And if you have a buyer who is aligned with the values of the business, the transition isgoing to be a lot easier.
But also something that we just touched upon was making the business owner independent.
So that...
The risk in the transactions of suppliers and customers walking away is greatly reduced.
(36:55):
And clearly defined core values is going to provide so much greater loyalty from allsides, suppliers, customers, and employees.
When everybody is aligned, they're all part of that shared vision of, what gets us up dayto day?
How does this business operate?
(37:16):
What do we stand for?
What do we hate?
What do we like?
Once you've got a real entrenched set of core values, it's going to provide so muchgreater value at that ultimate sale time.
I agree on all those points.
And while you were chatting then, Sam, I just thought of two other things that I wanted tobring up just before we finish today.
(37:38):
ah Have your contracts current.
So don't come to sell your business without having current contracts.
So I lost a big sale last year because they had five contracts.
ah Three of them weren't current and they were waiting on clinical directors or clinicalheads of hospitals.
(37:59):
private hospitals who were in a state of flux to be able to get to that document.
So don't become because we don't have any value if there's no contract signed.
And this goes back to your legal and regulatory compliance without signed contracts.
You don't have anything to sell.
And the final thing was workers comp.
(38:20):
If you've got workers comp in your business and you're having a share sale, then it's ared flag again.
So that just goes, I guess, to key person risks.
If you've got a workers comp person, um get that person well, get them back to work ortransition them out of the business, ideally before it comes to market.
(38:43):
Again, it's just another red flag we can do without.
Excellent.
Thank you very much, Sally.
Well, Sally, I reckon we align pretty well.
What do you think?
uh And it's great seeing your list from the broker's perspective and my list from thebusiness coach's perspective.
We're both looking at businesses from a different lens, but at the end of the day, thealignment is absolutely fantastic and it just works.
(39:10):
Sally, as always, this has been gold.
I love that even though our lists overlap in a lot of areas, you've brought in some realbroker specific insights that most business owners probably wouldn't even think about
until it's too late.
Now, for those listening, remember, selling a business isn't just about finding a buyer,it's about making your business irresistible to the right buyer.
(39:33):
And that starts well before you hit the market.
Now, Sally.
Where's the best place for people to connect with you if they're thinking about selling?
Sure.
So I'm on LinkedIn, Sally Stuart, S-T-U-A-R-T.
You can call me, you can email me, sally.stuart@linkbusiness.com.au,sally.stuart888@gmail.com or 04 370 820 45.
(39:59):
I look forward to hearing from you soon.
Fantastic.
And I'll put all of those details of Sally's into the show notes along with both ourchecklist so you can start working through them today.
Now, if you found this episode valuable, make sure you hit follow on your podcast app soyou don't miss the next one.
And if you know a business owner who's thinking about selling in the next couple of years,please send them this episode.
(40:22):
could be worth hundreds of thousands of dollars to them.
Until next time, I'm Sam Penny, and this has been Built To Sell, Built To Buy, helping yousell smart.
buy right and build something extraordinary.
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