20/20 Money Episode #360: The legal side of selling to PE: setting expectations the right way with Dr. David Cohen

Let’s discuss the legal intricacies of exiting a practice, particularly in the context of private equity transactions. On this episode, David Cohen and I explore the importance of managing expectations for sellers, understanding the valuation process, and the implications of debt and real estate ownership in practice sales. Our conversation emphasizes the need for thorough preparation and professional guidance to navigate the complexities of selling a practice successfully.

As a reminder, you can get all the information discussed in today’s conversation by visiting our website at integratedpwm.com and clicking on the Learning Center. While there, be sure to subscribe to our monthly “planning life on purpose” newsletter that’s filled with tips and ideas to help you plan your best life, on purpose. You can also set up a Triage conversation to learn a little bit more about how we serve in the capacity of a personal and professional CFO: helping OD practice owners around the country reduce their tax bill, proactively manage cash flow, and make prudent investment decisions both in and out of their practice to ultimately help them live their best life on purpose. If you’re interested in learning more about how OD Masterminds creates space for real conversations, real accountability, and real growth, please check out the link in the show notes of this episode to learn more.

And with that introduction, I hope you enjoy my conversation with David Cohen.

Resources:

20/20 Money Ultimate Financial Success Masterclass

OD Mastermind Interest Form

Takeaways

• You will exit your business at some point.

• Exiting to a corporate buyer is very different than peer-to-peer transactions.

• Sellers need a realignment of expectations regarding control and changes post-sale.

• Understanding the enterprise value is crucial for sellers.

• Debt must be paid off at closing, complicating the sale process.

• Real estate ownership can impact the sale and lease agreements.

• Negotiating lease terms is essential to maintain property value.

• Expectations around performance metrics must be managed carefully.

• Professional guidance is vital in navigating practice sales.

• Preparation is key to avoid pitfalls in the selling process.

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For past episodes of 20/20 Money with full companion show notes, please check out our episode archive here!