Having just finished the project management for professional series on the Ndarala Group blog, we have started a new series, Contracting Woes.
This new series will look at the often vexed relationships between contractors and consultants on one side, both groups and clients on the other. This is an area on considerable interest to Ndarala because so many of our members are self-employed professionals.
I would like to encourage you to follow and to contribute to the discussion.
Showing posts with label self employed professionals. Show all posts
Showing posts with label self employed professionals. Show all posts
Wednesday, January 24, 2007
Tuesday, July 04, 2006
Selling your practice: the self employed professional case
In my last post I spoke of the difference between the self-employed professional and those trying to build a professional services business. I suggested that one key difference lay in the attitude to final sale.The self employed professional does not think of sale, the business builder does.
One of the things I try to do is to get my self-employed professional to consider the sales option.
I recognise that sale of practices has become more difficult in many areas. The doctor who used to think of sale of practice as an integral retirement option may now struggle to find a buyer because of changes in the profession. The aging principal in many smaller engineering or legal practices may conclude that he (it is still usually a he in these cases) has no choice but to close the pratice.
Yet despite all these difficulties, sale is still a far realler possibility than many people realise. The key need is to identify and test the possibility well in advance. You can then put it aside or, alternatively, start planning for it.
One of the things I try to do is to get my self-employed professional to consider the sales option.
I recognise that sale of practices has become more difficult in many areas. The doctor who used to think of sale of practice as an integral retirement option may now struggle to find a buyer because of changes in the profession. The aging principal in many smaller engineering or legal practices may conclude that he (it is still usually a he in these cases) has no choice but to close the pratice.
Yet despite all these difficulties, sale is still a far realler possibility than many people realise. The key need is to identify and test the possibility well in advance. You can then put it aside or, alternatively, start planning for it.
Self-employed professionals vs business builders
Discussions last week with one of my colleagues raised again the difference between the self-employed professional and those trying to build professional services businesses. Why is this important?
Well, in the case of my colleague, one core issue was the nature of the different exit strategies.
The self-employed professional is not trying to build an asset for later sale. Rather, his/her focus has to be on maximising the value of cash flow since investment from this provides the base for later exit.
The business builder is in a different position. He/she wants to get a return not just from immediate cash flow but also from business sale. So the focus has to be in part on investment from cash flow to build longer term business sale value.
Sounds simple, but the difference leads to quite profound behavioural differences.
Well, in the case of my colleague, one core issue was the nature of the different exit strategies.
The self-employed professional is not trying to build an asset for later sale. Rather, his/her focus has to be on maximising the value of cash flow since investment from this provides the base for later exit.
The business builder is in a different position. He/she wants to get a return not just from immediate cash flow but also from business sale. So the focus has to be in part on investment from cash flow to build longer term business sale value.
Sounds simple, but the difference leads to quite profound behavioural differences.
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