Case Study


Linda would like to exit her practice as soon as possible
if she is able to maintain the same lifestyle she lives today

The Background

Linda, 57, has been the sole owner of her private practice for 28 years.  She leases a 5,000 sq ft clinic with 6 full time employees and 25 independent contractors.  

She learned in the early years of her practice that younger therapists were excellent at patient care.  However, these therapists would often leave the practice within a few years for various reasons (to start a family, to start their own practice, moving out of state after completing school).  Frustrated by the consistent turnover, Linda thought there must be a better way to operate her practice.

Her business model evolved into building a management team with each employee having a specific expertise in one part of the practice’s patient process.   She built detailed, documented processes and information systems that could be easily followed by a therapist whether she’d been with the company for 5 days or 5 years.  Linda can attract top talented therapists by offering the highest hourly wage in the county. She does not offer benefits and prefers these SLPs work as independent contractors.

She has completely modernized her practice by reinvesting into her business.  She uses an EMR system to record all patient notes and IEPs. As the clinic was reaching maximum caseload, she adopted telepractice to continue growing while not having to find a new clinic space.  

Linda has begun to feel burnt out from working 60+ hours per week for nearly 3 decades.  She has accumulated savings during her career but is uncertain how to use those assets, and any proceeds from the sale of her practice, to produce income for the rest of her life.

Linda is single and has one adult child, Jennifer.  Jennifer is an attorney who lives out of state and has no interest in acquiring the practice from her mother.  While Linda views her 6 critical employees as indispensable to the success of the practice, they have all explicitly stated that they do not want to own the business. 

The Challenges

  • Linda does not know of any interested party in buying her practice.
  • She would like to sell the practice sooner than later.
  • Linda has never had a valuation calculated for her business. She knows what other practices in the county have sold for in recent years but is uncertain how that applies to her practice.
  • Linda does not know if she can afford to retire.
  • Linda is grateful for her 6 key employees’ loyalty and would like them to stay involved with the practice.

The Conclusion

Based on the background details that we learned about Linda and her practice during our Plan of CARE meetings, we knew that this practice was a prime candidate for a 3rd party sale.  Essentially, a 3rd party buyer looks to acquire a business for its people and processes that has the owner as little involved in the day to day operation as possible. A strategic buyer may offer to pay cash upon purchasing the business.  This would enable the practice owner to receive a lump sum payment for the business and use those proceeds to fund their income in retirement.

Working together with Linda and her team of professionals, the practice was sold to a strategic buyer 3 years after identifying the appropriate exit strategy.  We implemented the following deliverables as part of her retirement and exit plan…

  • Conducted pre-sale due diligence prior to going to market.  This prevented avoidable mistakes and interested buyers from eliminating their interest.  
  • Calculated a valuation for the practice that set the baseline for negotiation with the prospective buyer.  
  • Structured employee retention strategies that kept Linda’s management team employed with the practice through the acquisition and post-sale.
  • Analyzed Linda’s financial resources (i.e. assets, practice value, investment accounts income streams) to determine how she can produce her desired level of annual income once the practice sold.
  • Identified the optimal time for Linda to claim social security benefits

The sale price was for more than originally anticipated because the buyer placed a premium on the systems Linda had implemented into her practice.

She continues to work with the Utterly team for the following to manage her investment portfolio and strategically withdraw money from her different accounts in retirement.

All scenarios and names mentioned herein are purely fictional and have been created solely for training purposes. Any resemblance to existing situations, persons or fictional characters is coincidental. The information presented should not be used as the basis for any specific investment advice.

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