Business Articles » The Marcus Welby, Dr. Kiley Method of Transferring Business Ownership | View all |
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For those of you too young to remember the television show Marcus Welby, M.D., let me take a moment to fill you in on the details. Marcus Welby was the only doctor in a small rural town. He knew he needed another doctor to enter his practice for a few reasons. One was to handle the growth of new patients. Another was to relieve him of some of his workload with existing patients.
But the most important reason was that if he wanted to retire and receive anything of value for his practice, he needed to transfer the “goodwill” of the business to another doctor over time. If he could not accomplish this task, when he was ready to retire, he would have to close his doors and receive nothing for over 30 years of service to the community.
So how did Marcus Welby handle his situation? After Dr. Kiley entered the practice, Dr. Welby introduced him to each and every patient when they came to the office. Dr. Kiley was introduced as being a “partner” in the practice and would be relieving Dr. Welby of some of his day to day workload. Dr. Welby assured each patient that they would continue to receive the same high level of personal and professional care from Dr. Kiley.
Over time the patients came to trust Dr. Kiley and had no objection to his treating them if Dr Welby was unavailable. Many stopped asking for Dr. Welby altogether and asked for Dr. Kiley instead. The transfer of goodwill had taken place, and now the medical practice had real value that could be sold to Dr. Kiley when Dr. Welby was ready to retire.
The same analogy can apply to any business where the buyer is concerned about losing employees, customers, clients and vendors after a sale takes place. If the current owner introduces the new “owner” to each customer, client, vendor and employee as a “partner”, the transition can go very smoothly. Over a reasonable period of time, the new owner will interact more with everyone he has met, and the seller will gradually wean himself off of daily communications and operations.
Then, after a mutually agreed upon period of “partnership”, whether it is 3 or more months, the seller can announce to all clients, customers, vendors and employees that his “partner” likes the business so much that he has made the seller an “offer too good to refuse” to buy the business. Since the seller will have successfully transferred all the “personal goodwill” to the buyer, this announcement should not concern anyone. And the business will have been successfully transferred with all parties pleased.
Author’s note. After helping sellers and buyers for more than 20 years, I have found that honesty, integrity, full disclosure, patience and a willingness to consider various alternatives makes the probability of success for all parties very high. In the above situation, the seller and buyer stretch the truth for the common good and peace of mind of everyone concerned.
Loren Marc Schmerler, CPC, APC is the former business advice columnist for Sam's Club. He has been a business broker since 1986 and works with business owners and business buyers in every state of the country. If you need assistance selling or buying a business anywhere in the United States, you can reach Loren at 404-550-1417, 24/7/365.
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| Article Submitted By:
| | Name: Loren Marc Schmerler |
| Company: Bottom Line Management |
| Website: www.BOTLINE.com |
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