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Make Sure You Understand Your Motivation for Selling

Are you thinking about selling your business?

This simple one-question quiz will help you to better understand your motivations behind this thought. A better understanding of your underlying motivations w

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

ill help you make the right decision.

Select the answer closest to your actual reason for thinking about selling your business.

A. "I'm selling my business because of the money I will make on the sale". B. "I'm just tired and it's not fun anymore." C.

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

"I have too many irons in the fire and can't keep up". D. "I'm ready to retire from owning my business".

A. "I'm selling my business because of the money I will make on the sale".

This is rarely a good answer if it is the primary answer. Most small busine

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

ses sell for 1 to 3 times yearly cash flow after adding back all owner salary, benefits, fringes, interest and amortization/ depreciation.

Larger mid-sized businesses generally sell for to 3 to 7 times cash flow after deducting for the cost of executive manag

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

ment. While this sum can be significant, it is usually only a few times what you will make this year.

Continuing on with the business will usually make you more money in the long run. On the other hand if you have an offer in hand from a public company at 2

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

times earnings, take it.

B. "I'm just tired and it's not fun anymore."

This question requires careful digging into the reasons for the thought. If you are really ready to get out of the business, then it is a good reason. If the real reason is that you a

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

e just tired under the current conditions and as soon as things improve you will get excited again, think long and hard.

Often during the sales process your broker, intermediary, or other advisor will provide coaching to improve obvious defects in the busines

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

s to make it more salable. Sometimes measurable improvements occur for the business. Suddenly the owner doesn't really want to sell now that things are moving again.

This is a bad situation for everyone. If what you need is coaching to get out of a rut, hi

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

e a coach; don't sell your business. But, if you are really mentally done, sell the business before you completely run it into the ground.

C. "I have too many irons in the fire and can't keep up".

This is a valid reason to sell a business. It is a somewha

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

common occurrence for multi-location operators who either buy one too many sites or just end up with one or two sites that are too far away to manage.

Often the constant attention you must diverte to an under-performing site will lower earnings of the whole

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

hain. Just remember when pricing the underperforming site for sale that if your not selling much in terms of profits or revenues your not going to get much in terms of price. An old adage that applies here is that the first loss is the cheapest loss. In thi

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

instance be prepared to take your loss and move on.

Another variation is the entrepreneur who has a new venture that is overtaking the older established business. Time constraints, management abilities, and variations in potential down stream financial retu

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

ns may make it desirable to sell the older business. This can free up resources allowing better overall financial returns.

D. "I'm ready to retire from owning my business".

This is the king of reasons to sell. Just make sure its true. Selling a business

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

often means walking away from it completely. Retiring sellers often want to think that they will be invited guests indefinitely.

Usually once the nuances of the business are understood the new owner will want to take the reins and run the business his way. A

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

t settlement you will sign an enforceable non-compete that legally and ethically obligates you to leave your old client base behind.

Another frequent issue is that the retiring owner has run the business "just to meet my needs" the last several years. In tho

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

e instances the lower performance is what the business sale price is going to be based on. If you as a retiring owner want the full price based on what the business could really do - generate those results yourself and sell the business when the numbers are s

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

rong.

In general buyers are the least suspicious about dealing with retiring sellers. If the retiring owner has run the business well up to the end they can often get a small premium on their price.

The Bottom Line

There are thousands of variants to these f

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

ur reasons to sell your business. Each variation comes down to the same underlying thought process-are you selling because of short term issues you will overcome or are you selling because it is time for you to get out? No one can answer this question for yo

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

but your future success and happiness may depend upon getting you it right.

If business is slow in your industry but you are hanging on, and you like the business as much as another career, then don't sell. Get the marketing, accounting, coaching or other h

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

lp to get out of your rut and make it to the good times.

If you are completely burnt out, it really is time to retire, or you have much better things on the horizon then sell the business while it is still performing well in order to maximize your sales price

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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