The other day I had a meeting with a client who owns and operates primary health care clinics. He’s a small player in a vast industry but he must be doing something right. This is his second time around. He started and sold his first company which also owned and operated primary care clinics.
After he sold, the large company that bought his first venture didn’t want him. He didn’t fit their physician model. So they let him go and after his non-compete expired, he started another competing primary care clinic.
In just over two years, he has grown that business and now sees 50% more patients than the business he sold.
His success is mostly due to an incredibly high level of customer service. His facility is also in a good location and the owner is well-connected with the local community.
But with all the success he has seen, the owner is thinking about next steps and expansion possibilities.
And that’s the problem.
With other medical practice businesses that I’ve worked with (and with other small businesses in general), they tend to do well when the founder is directly involved. But the more they grow, the less the founder can be involved in day-to-day decisions.
And as this happens, the quality of the business tends to deteriorate.
And when they reach the point that the founder can no longer spend time in every location every day, that’s when they really seem to suffer.
My advice to this owner was that he can continue expanding using his current model in the current market. But if he wants to grow into new markets, he will need to make some radical changes to how the business is run. And he will need to spend money to bring in a significantly higher level of employee to manage the business.
This is not an uncommon problem that many successful entrepreneurs face.
Unfortunately, I’ve seen where the entrepreneur wants to continue growing the business but they’re not willing to make the necessary changes. Quickly, the business gets out of hand and they wind up needing to sell to keep it all together.
I was actually on the buying end of many of these businesses years ago.
I’m not sure what my client will decide but hopefully, I can help guide him through the process.
