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NO B.S. Guide to Selling Your Company for Top Dollar 117CHAPTER 14 / INTERVIEW WITH STAN KINDERDQ%u0003RZQHU%u0003%u00c0JXUH%u0003RXW%u0003ZKHQ%u0003KH%u0003VKRXOG%u0003VHOO%u0003WKH%u0003FRPSDQ\\\other questions should he answer?STAN: Here are six big questions I like to discuss with the would-be seller:1. Why am I selling? Examples might include retirement, bringing in a growth partner, or diminishing the administrative burden, among any number of others.2. How does the sale of my practice integrate with my overall retirement planning?%u0016%u0011%u0003Do I want to continue working after the sale or do I prefer to sell and walk away?4. Would I consider working longer if I could unload the burdens of practice ownership?5. :KDW%u0003 LV%u0003P\\%u0003 WDUJHW%u0003 %u00c0QDQFLDO%u0003 RXWFRPH%u000f%u0003 DQG%u0003PRUH%u0003 EURDGO\\%u000f%u0003what is vitally important to me as I pursue a sale?6. What is my ideal timeline?Answering these questions will help you focus on the why, when, how, and who of your desired transition. This leads to the next consideration%u2014how to obtain maximum value at the time of sale.7KH%u0003%u00c0UVW%u000f%u0003DQG%u0003PRVW%u0003LPSRUWDQW%u000f%u0003WKLQJ%u0003WR%u0003XQGHUVWDQG%u0003LV%u0003WKDW%u0003WKH%u0003central foundation of value in selling your practice is free cash %u00c1RZ%u000f%u0003WKH%u0003GROODUV%u0003RQ%u0003\\RXU%u0003ERWWRP%u0003OLQH%u0011%u0003,W%u0003LV%u0003QRW%u0003\\RXU%u0003VWDWH%u0010RI%u0010WKH%u0010DUW%u0003IDFLOLW\\%u000f%u0003\\RXU%u0003ZRQGHUIXO%u0003VWD%u037f%u000f%u0003RU%u0003HYHQ%u0003\\RXU%u0003OR\\DO%u0003SDWLHQWV%u0011%u0003,Q%u0003WKH%u0003%u00c0QDO%u0003DQDO\\VLV%u000f%u0003WKHVH%u0003YDULDEOHV%u0003DUH%u0003LPSRUWDQW%u0003RQO\\%u0003WR%u0003WKH%u0003GHJUHH%u0003that they help or hinder the production of net income. There is a principle at the core of every approach to valuing a practice, and it is this%u2014WKH%u0003SULPDU\\%u0003GULYHU%u0003RI%u0003SUDFWLFH%u0003YDOXH%u0003LV%u0003WKH%u0003FDVK%u0003%u00c1RZ%u0003generated by the practice that will be available to the purchaser to pay himself a living income and to support the cost of the purchase. Consequently, net income is the basis for the purest Preview Copy | 59