Dr. Allen Nazeri, a dentist and MBA, teaches clinic owners how to systematically improve operations and governance to increase practice valuation. He argues that most dental practices sell at 3x EBITDA when they could reach 10-12x through deliberate value engineering, whether you're planning an exit, raising capital, or scaling.
Chapters
Value engineering strategies to 10x the value of your clinic and dominate the market.
I am Dr. Alan Nazeri, DDS, MBA and this book is for all clinic owners who are looking to scale and grow their practice.
Dedication and Acknowledgement I would like to acknowledge all of the founders I have met and mentored over the last three decades, sharing their challenges and rewards in building their companies. I would also like to dedicate this book to all healthcare professionals around the globe who work hard at building a practice but rarely benefit and exit at a premium value.
Introduction Healthcare businesses are being rolled up across the globe by professional investors unlike any other time in history because of the relaxed laws allowing non medical professionals to own and operate medical establishments. Whether we are for or against the idea of corporate healthcare, regulators across the globe are starting to realize the importance of leaving commercial decisions and to business professionals and clinical care to healthcare practitioners. This way of thinking improves the quality of care as well as the quality of experience for patients. I did not want to write another book about valuation methods and related accounting practices. There are undoubtedly several excellent books on this subject already. This book is on growth strategy using valuation framework outlined as a tool to increase the valuation of any healthcare practice up to 1000% or 10x its current worth.
I refer to this process as value engineering. Yes, it is a process requiring time and effort to create the desired valuation, but I will share the steps founders and their management team can take to improve the their current situation with an eye for a future exit. These steps are all about protecting the present value and systematically enhancing its investment value from a professional investor's perspective.
Over the years consulting clients, I have realized many don't even understand what valuation means. Generally, owners learn about valuation, but when they're talking to a practice broker or looking to raise money through debt or equity financing. Business valuation is an appraisal that reflects the health and sustainability of any business practice. Owners seldom think it is necessary to know their business's value until they are ready to transfer ownership at some time in the distant future. However, one lesson I like to leave with readers is not to delay getting a current appraisal and learning all the factors that could help improve their valuation.
The tactical steps explained in this book are more than merely finally having a big payday. Every action we take in investing, creating, recruiting and marketing affects the final results. Therefore, operating from this knowledge improves operational performance, resulting in higher revenues and profitability, which are the ultimate value indicators. The framework explained in this book will make the difference between an investor paying three times a company's profit EBITDA versus 10 to 12 times of EBITDA.
Whether we decide to sell off our practice.
Use part of our equity to raise additional funds to expand or become a publicly listed company.
Earlier we begin engineering this process, we can realize Higher Dividends when my clients become familiar with the necessary actions they must take to improve valuation, they will not only end up receiving much higher offers for their businesses, but also become more logical than emotional, vital, entertaining offers. The sad truth is, most healthcare practices never sell and those that do sell, the owners walk away with lot less than they could have realized. However, those who follow the framework outlined in this book will end up building large and successful businesses that become an acquisition target while others retain control and enjoy a very lucrative passive income for several generations.
For the past 30 years I have been a dentist, serial entrepreneur, an angel investor, an investment banker and a practice management consultant, helping medical and dental groups develop, scale and exit from their businesses. In countries like the United States, the United Kingdom, Canada and Australia, practices often change hands through a business broker. Typically, the business brokers are good at finding a willing buyer and negotiating a transition with a business attorney's help. However, most brokers have minimal or no operational knowledge in scaling a business. Thus they are rarely able to offer advice what Founders can do to Increase Value However, I am here to share strategies that you can implement immediately improving operational performance while thoroughly preparing for an exit. If you already have listed or are thinking of listing your company, the results gained from implementing the steps outlined in this book may dissuade you from exiting your business. These proven strategies are guaranteed to help your business grow to the next level no matter its current stage. You can be confident these strategies will bring more accountability systems and stability essential in transforming a family operated company into a professionally run enterprise. The more stability with better systems within a company, the more value it can demand from the marketplace. Whether you are looking to retire off into the sunset or raise the necessary capital to grow further. However, putting scalable systems in place is a process requiring advanced planning and implementation. It is often best done under the coaching or supervision of an experienced advisor familiar with professional investors valuation metrics. This necessity in planning is why many companies add outside directors or advisors to their board to navigate them through this process. Unfortunately, most owners consider selling in whole or part of their business, often due to unexpected events, often late, without a proper plan. Being in this vulnerable position forces founders to accept the best offer at hand, robbing them of sometimes millions of dollars from their years of sweat equity and hard work.
This is the end of part one acknowledgment and introduction section, please proceed to part two.
