The 7 Biggest Mistakes You Could Make When Exiting Your Medical Billing Business
The 7 Biggest Mistakes You Could Make When Exiting Your Medical Billing Business
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It is very rare for the founder of an investment consortium specializing in the Medical Billing Industry to write this kind of report. Many other firms and brokers do NOT want you know this information. Please take the time to read it carefully. In fact, if you are – as I hope –interested in making sure that your exit from business works out to the best interests of you, your
clients, and your team members as possible, then...
I urge you to get comfortable, ask not to be disturbed, and STUDY this report – it IS that important! It reveals vital information that you NEED to know! **********************
Dear Friend,
It’s shocking but true.
Every day, the owners of medical billing companies make the decision to sell their businesses without doing a sufficient level of research about the person or firm actually making the purchase...
Which can result in failing to obtain a fair valuation and the compensation they deserve, while turning the company they’ve built and invested so much blood, sweat, and tears in – into a sad, hollow shell, nothing at all like the legacy of trust and service they hoped to create.
These and other factors can transform what should be the joyous, positive experience of exiting your medical billing business...
Into a process that’s DIFFICULT and STRESSFUL from start to finish. Why? Because here’s the undeniable truth:
THE OVERALL SUCCESS OF YOUR TRANSITION HINGES UPON YOU CHOOSING THE RIGHT PARTNER TO ACQUIRE YOUR FIRM
The investor and partner you choose to take over your firm is the “key” to you having the very best experience possible on a number of levels.
Making the wrong decision here can have multiple negative effects on a number of individuals – you, the clients you serve, and the people on your team.
This report is going to give you the inside-scoop on the very real risks you face when choosing to sell through brokers or sell to other potential buyers who don’t share your priorities in providing the most advantageous exit strategy for all parties concerned. You’ll be armed with the knowledge you need to make certain that your years of sacrifice and hard work have paid off when that time comes.
In just a minute, I’m going to reveal what the 7 Biggest Mistakes are and how you can avoid them, but first let me answer a couple of questions that are probably on your mind:
“Who Are You And Why Are You Revealing This Information?”
My name is Rosebell Mirugu. I was born in Kenya, moved to the US in 2001 and I’m now the Principal and founder of Capstone Medical Billing Holdings, LLC – an elite, high-performance team with over 450 completed transactions, and more than 300 years of experience in providing Management, Leadership, Healthcare, Mergers & Acquisitions, and IT.
Our mission is to serve the owners of established, profitable Medical Billing companies who are interested in exiting their businesses to move on to retirement or other opportunities in life.
I’m revealing this information because I’m passionate about small to medium-sized businesses and especially those in your industry. You’re on the front lines enabling doctors to provide the very best health care possible, by empowering them to focus on what they do best – serve their patients – while you take care of the nitty-gritty details associated with billing, insurance, and reimbursement.
And I treasure small businesses like yours because I used to be one. I understand what it feels like to deal with the kinds of challenges you face day in, day out – providing great customer service, delivering consistent value, managing employees, juggling payroll, working with vendors, and so on. I understand how overwhelming it can seem, particularly when the time comes to move from running your own firm to transitioning to something new and exciting in your life – whether it be a new opportunity, a new career, or retirement.
Okay, now that you know who I am and why I’m doing this, let’s talk about The 7 Biggest Mistakes You Could Make When Exiting Your Medical Billing Business...And How To Avoid Them!
BIG MISTAKE #1:
Not Getting The Valuation You Deserve
This is probably the biggest mistake you could make –
Many of the people we work with see exiting as their number #1 means to establish a successful retirement – and in all likelihood, they’ll probably never come back to the business world again. Their entire retirement strategy revolves around the sale of their medical billing business as the means to totally fund retirement from that point forward.
And if you DON’T get the valuation you deserve, when you sign on the dotted line and walk away to move on to whatever comes next, you’ll almost certainly leave with regrets.
You definitely do NOT want to spend your years always second guessing, always wondering, “did I do the right thing?” and “should I have gotten more?”
This is NOT a good way to set the stage for that next phase of your life, no matter what you had in mind – retirement, new business venture, or just taking some time off to do the things you really wanted to do.
Now it’s important to recognize that establishing an accurate business valuation requires more than just a quick look at your Profit and Loss Statement. It requires you to partner with a professional firm that understands the Medical Billing Industry, as well as how your specific business operates under current market conditions.
You want someone who recognizes the core assets your business brings to the table, which includes the technology you use, your existing customer base, marketing and sales processes, and of course your employees and their skillsets.
When you get the right valuation, you can exit the company knowing that you were able to reap the benefits of your hard work, so you can retire with pride, dignity, and something significant to show for all of that hard work.
BIG MISTAKE #2
Automatically Selling Out to a Private Equity Firm
So why is this a bad thing?
Well, I wouldn’t necessarily term it as a bad thing. I don't want to demonize private equity firms because they can absolutely play a role in some cases.
But as the business owner making the sale, you do need to recognize that their top priority is purely financial. As a rule of thumb, the values of a Private Equity Firm don’t typically align with small businesses like yours.
Why is this?
Well, bottom line is they simply don't care all that much about the seller – you as a person or your goals for your retirement, your clients, or your employees.
They only really care about the money.
Plus, the relationship dynamic between you and this kind of firm is very different.
Because their primary focus is maximizing profitability, odds are good they will downsize to improve profits, let go of your existing employees and fill in with their own – from their corporate entity, meaning from the holding company or from any other corporate entity that they have.
Now, what other options do you have?
Well, you could work with a firm like ours who specializes in serving owners in the medical billing industry. We care about you, your employees, and your clients. Our goal is to take a company to the next level without making massive changes to the team or clients.
BIG MISTAKE #3:
Overlooking the Not-So-Obvious Risks of Using a Broker
Okay – here’s the good thing about having a broker.
There’s a very good chance they will eventually find you a buyer.
On the other hand, the bad thing about using a broker is that you have to pay fees, which normally range from about three percent to about ten percent.
So that means you're having to split your net profits when you sell – and that’s money that I’m certain you’d rather see go into YOUR pocket, not theirs, when you exit.
And here’s the biggest risk with using a broker – they may misrepresent your company when presenting it for sale to potential buyers, particularly regarding things like valuation, overall profitability, and even profitability of specific clients.
This misrepresentation not only hurts your chances to obtain a solid deal, it impacts your perception in the marketplace.
Another bad thing is they might inflate the value of your company to a point where buyers are not interested. Or the buyers they bring in as interested at the beginning, based on inflated valuation documents, will later on – after due diligence – disappear once they find out the real truth.
This could go on for, let's say, about three or four months, only to find out towards the end the buyer drops off because they found out there's certain information that was exaggerated just to make the company's profitability look better.
So this scenario all adds up to more wasted time, wasted effort, and wasted money.
On the other hand, we don't charge any fees at all when you work with us. And even if you wind up not selling with us, you’ll still get the full benefit of finding out what valuation is assigned to your company.
Remember, this is your profit that you have worked so hard to earn. Why would you want to share that with someone who has not contributed via sweat equity or some other manner?
BIG MISTAKE #4:
Not Considering the Effects on Your Clients and Employees
Here’s something many owners never ask themselves before going down the path of planning their exit strategy – “What happen to my clients during the transition?”
Well – it all depends on who you partner with.
Clients could leave the company if they deem the person taking over is not a fit for them or if the company taking over changes the culture, and the clients or the employees do not agree with it.
In addition, your employees could very well leave the company for other opportunities if they don’t like their new management. Another very real possibility is the employees could be let go by the incoming company – remember, if the buyer’s ONLY interested in profitability, cutting headcount could be their very first move after closing the deal.
Doing this right means understanding and valuing your business’s unique corporate culture. There are two types of cultures that we look at:
• The employee culture.
• The client culture.
And in my opinion, both matter very much.
One thing we try to do when helping people like you plan and manage your exit is try to understand the business culture you’ve created and work hard to maintain that culture during the transition and after you’ve left.
This requires doing the leg work up front to make sure we understand your company’s culture as fully as possible. That way we can minimize any negative effects during your transition. This is important because the potential negative effects could very mean you lose employees and you’ll lose clients – and when that happens, you could very well also lose your business.
BIG MISTAKE #5:
An Overly Complex, Unclear Transition Process
Now, you may be wondering, why does making this as simple as possible matter?
It matters tremendously because a confusing transition process can quickly lead to the unnecessary attrition of employees and clients, which will result in low profitability. If the process remains confused and unorganized over time, it can destroy your company’s growth.
And in some instances, this could even cause your company to go out of business. That would definitely affect your future plans, wouldn’t you say?
You really want to work with someone who takes the time to craft a carefully designed transition process for your entire business, based around your existing clients, employees, services, systems, and much more.
That’s exactly the process we put in place with everyone we work with.
BIG MISTAKE #6:
Failing to Preserve Your Legacy
Make sure you preserve your legacy.
Over the years as I’ve worked with many different small to medium-sized companies, I’ve come to appreciate and respect the level of well-deserved pride their owners have in the businesses they’ve created and built.
You’ve put your heart and soul into creating a business... served clients with professionalism and integrity... built a team that truly cares about delivering incredible value.
You don’t want to see that legacy diminished or even abandoned when you leave and a new management team moves in.
But sadly, it happens all too often. And it’s a shame, because it doesn’t have to happen.
When we work with you, we recognize the importance of preserving your legacy, so you can hold your head high when you look back at what you’ve accomplished.
Your legacy involves a number of variables, which differ from company to company. And when we look at a company like yours, we consider everything – systems, processes, and mission – all of which we consider core to the building the overall strategic vision for your company’s next phase of growth.
The things that matter most to you are absolutely things that we work very hard to maintain as that business moves forward.
So whomever you choose to work with when you make that decision to exit, make sure they have a plan in place to maintain and build on your legacy.
It matters not only to you, it matters to us.
BIG MISTAKE #:7
Not Structuring Your Payout in the Best Way Possible
Now, I don't have time in this report to go into all the details associated with structuring a payout, because that structure depends on a number of critical variables, such as revenues, staffing, physical overhead, and much more.
However, the important point to recognize is that you don’t want someone who simply applies a payout “template” and attempts to squeeze your into their model. There’s no way that can work to your benefit.
In contrast, we are not one-size-fits-all. We strategize with the seller and we can make the payout fit their goals and their ambitions for whatever comes next after the transition to exit the business.
In fact, during our initial consultation, that’s essentially the key point we want to understand about you. After determining your business’s true value, we’ll work to structure the deal to deliver on considerations that matter most to you. Which means we make sure to factor in the one thing that matters most:
What’s next for YOU?
If you’re going to retirement, tell us your vision. And we can align that vision into how we structure the payout – which could involve seller financing or a simple lump sum.
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Well, there you have it.
Obviously, if you’ve done tons of research on this topic you may have already considered some of the points revealed in this report. Even so, I hope you found a few gems that you can use to ensure that your exit strategy – whenever and however it occurs – has been structured and managed in a way to delivers the outcome that you so richly deserve.
And here’s the easiest way to make sure this happens...
Schedule Your No-risk, Zero-Obligation “Compass to Retirement” Consultation Call
It’s a simple 15-minute call, just you and me, where together we’ll go through and blueprint the entire “compass to retirement” for you and your business.
This is perfect for you if you’ve ever said to yourself, "well, someday I could sell this company," but you really have no concept what that means.
During our call, I guarantee that within these 15 minutes, you will discover how ready your business is to consider an exit strategy – which could involve a simple buyout or possibly even a partnership scenario where we take on a significant financial interest while you maintain an important role doing what you love to do most.
This consultation saves you time, money, and worry – because when you engage with us, you’ll know the entire process involved with selling your business, how we determine valuation, and what you can look forward to before, during, and after.
Again, there’s no risk, no fee, no obligation.
Just call 214-846-9679 or email me at Rosebell@capstonemedicalbillingholdings.com to schedule your “Compass to Exit” Consultation call.
Best,
Rosebell Murigu
Principal / Founder
Capstone Medical Billing Holdings, LLC
P.S. One more thing – if you’ve already started down this road, it’s important to know whether you've found the right partner to move forward with. If I was a seller, I would question the intentions behind the buyer. What is motivating them to buy? What are they going to do with the business once they buy? Do they want your guidance in transition?
If they don't, that's a red flag as they will implement changes that might not align with yours.
We are focused on getting you the results you deserve. To find out more, schedule your free consultation by calling 214-846-9679 or email me at Rosebell@capstonemedicalbillingholdings.com now. There are only a limited number of spaces available, so don’t delay.