How Can a Solo-preneur or Other Smaller Business Owner Be Appealing for Acquisition?

While this example is written about two mental health providers, it could be about a construction company, web designer, etc.

Fran and Frank had two different operational models and two very different prospects for sale.

Fran a mental health provider had completed her training and joined a large health system.  After five years she was ready to be on her own, no more organizational demands seeming to restrict and complicate her work.  She elected to open a mental health studio with multiple professionals, calling it West Mesa Mental Health for the Elderly.  Fran saw clients 1/2 time and oversaw all other functions of the practice and earning from the other provider’s work.  Patients/clients recognize the practice as having high quality.  Within a couple of years business was booming.

Frank’s path followed Fran’s, after he completed his education he joined a large health system.  He too became disenchanted with the environment but wanted to continue practice, on his own.  Frank was more attracted to a solo practice without the complications of staff, higher overhead, etc.  He opened under his own name and found success filling his practice within 3 years.  Patients/clients recognize Frank as being great at his work.

At the time they each elected to sell, both were taking home $90,000 in wages.

In spite of their seemingly similar success, the likelihood is that Fran will more readily sell her practice and at a higher price.  A buyer will see that she will benefit, be less at risk with the multi-provider business that Fran has built than the single-provider model of Frank’s.  The truth is that patients/clients deeply associated with a provider/business owner may elect to change to another if their trusted professional is leaving.  Only 1/2 of Fran’s time is seeing patients and the patient’s she sees know there are other providers in the practice.  If they elect to not work with the new owner, they may stay within the practice.

These are some of the key steps a solo- or otherwise small entrepreneur can take.  If you would like more detail about these, do email:

  • Clearly defined market, success, and capabilities
  • Strong and improving financials
  • Clients recognize the company, not the individual
  • Product/service strength can longevity
  • Demonstrable cash flow to owner
  • Cash flow strength to pay for the business purchase and the buyer’s living
  • Systems and staff that make the transition easier
  • Seller’s willingness to support through a reasonable transition
  • Industry strength
  • Future opportunity
  • Plan your exit plan well in advance

What models can you see working in your profession?