Join us on this enlightening episode of the Medical Sales Podcast, where we delve into the dynamic world of healthcare business transactions with our esteemed guest, Jerry Diza. As a seasoned business broker with a unique journey from law enforcement to the medical sales industry, Jerry offers a wealth of knowledge on buying and selling medical-based businesses. From urgent care centers to medical spas, discover how to navigate the intricacies of the market, identify potential buyers, and leverage financing strategies.

Throughout the episode, Jerry shares his personal career transitions and highlights the promising opportunities within the evolving healthcare sector. Gain insights into ownership structures that attract diverse buyers, including non-doctors, and learn about the potential of absentee-run businesses. Whether you’re a medical sales professional looking to invest in a healthcare venture or aiming to sell an existing business, Jerry’s expertise will equip you with the tools needed to make informed decisions.

Explore additional income streams through medical sales rep referral programs in the mergers and acquisitions space. Jerry also emphasizes the importance of clean financial records, strategic branding, and buyer qualification to ensure a successful business sale. With practical advice and real-life examples, this episode is packed with actionable strategies to help you thrive in the medical sales industry and transform your career trajectory. Don’t miss this opportunity to learn from one of the industry’s leading experts.

Meet the guest:

For history, I’m the managing partner of Pacific Reliance medical M&A advisors. We sell medical-based businesses with annual revenues between $1m-$20m nationally. Businesses include medical practices, medical equipment suppliers, and medical labs.

Our buyers consist of high-net-worth investors, strategic buyers, and private equity groups.

We have been selling businesses for over 11 years.

Connect with him: LinkedIn

Phone Number: (949) 427-0304 – Text first before calling

Website – https://pacificrb.com/home

Email – jdiza@pacifcrb.com

This Podcast offers a pathway to continuing education via this CMEfy link: https://earnc.me/496i3w

Join this event! https://evite.me/EYS_IgniteNexus_WinterBash

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Episode Transcript

00:07 – Samuel Adeyinka (Host)
Hello and welcome to the Medical Sales Podcast. I’m your host, Samuel, founder of a revolutionary medical sales training and mentorship program called the Medical Sales Career Builder, and I’m also host of the Medical Sales Podcast. In this podcast, I interview top medical sales reps and leading medical sales executives across the entire world. It doesn’t matter what medical sales industry from medical device to pharmaceutical, to genetic testing and diagnostic lab you name it you will learn how to either break into the industry, be a top 10% performer within your role or climb the corporate ladder. Welcome to the Medical Sales Podcast and remember, I am a medical sales expert, sharing my own opinion about this amazing industry and how it can change your life. Hello and welcome to the Medical Sales Podcast. I’m your host, Samuel, and today we have with us Jerry Deza.

01:05
Now this is an episode you absolutely want to hear, especially if you’re someone that’s been in medical sales and you’re looking for your next opportunity. Maybe you want to get a business, maybe you want to sell a business, maybe you know people that want to get businesses and sell businesses, aka your customers. This is the episode you want to hear. Jerry Deza is a business broker in the healthcare space and the opportunities he has privy and knowledge of are amazing, and there are opportunities you’re going to want to know. So, as always, we do our best to bring you innovative guests that are doing things differently in the medical space. Make sure you listen to this episode, tune in, pay attention, and I really do hope you enjoy this interview.

01:44 – Jerry Diza (Guest)
So we sell medical, medical based businesses nationally with revenues between a million to 20 million a year. So we’re lower, lower market MNA. So that would be. So we would sell like medical practices, urgent care centers, medical spas, weight loss clinics. We sell medical equipment supply companies, you know, like lab lab supply companies. We sell staffing agencies for the for medical, anything, medical based Cause my, our buyers are strategic buyers and and private equity buyers. So, and they’re national. Yeah, that was my question. Who are your buyers? Yep, okay, so, yeah, so it’s private equity, it’s it’s a strategic buyers and it’s high net worth clients, just investors that have a lot of money, that are looking to buy profitable companies.

02:24 – Samuel Adeyinka (Host)
Are they mostly doctors? Are they mostly business professionals?

02:27 – Jerry Diza (Guest)
Not necessarily no it’s a good mix. You know, money doesn’t discriminate. So if you’re not a doctor and you’re looking to buy a medical practice, there’s ways around it. I mean, I’m not, you know it’s. There’s different entities you can form to buy a medical practice. That’s why there’s a lot of investors that own urgent care centers. Right, they’re not doctors, but they run it as a business and they have a medical director on staff.

02:51 – Samuel Adeyinka (Host)
This is a little off topic, but is it. Is it? I mean, can some of these businesses that people buy from you? Are they passive or are most of the sales you make when they get the business? They are fully involved. You know pretty much running it like a CEO.

03:05 – Jerry Diza (Guest)
So it’s probably 60% absentee run, meaning that the owners aren’t there every single day working, and maybe the other 40% is, yeah, the owner is more hands-on. So you’re going to get a higher multiple, higher evaluation when it’s absentee run, right, when the owner’s, not when he’s at the golf course.

03:23 – Samuel Adeyinka (Host)
So think of it like Can you give me an example of I mean, you got me curious. Can you give me an example of an absentee run business that just doesn’t require that person that much?

03:34 – Jerry Diza (Guest)
Well, yeah, for example, like I had a doctor, he owned three urgent care practices, right, three urgent care centers, but he’s not the guy meeting patients anymore, he’s strictly admin. He’s managing the doctors under him, right, and he’s overseeing, you know, the labor. He’s overseeing cost of goods, he’s overseeing the management, but he himself is not at the practice himself. He’s not seeing patients anymore. He’s strictly admin.

03:59 – Samuel Adeyinka (Host)
Now, and okay, okay, so just let’s. Let’s just talk about it. So let’s say I’m a businessman and I want to get one of these businesses, maybe an urgent care center. I’m just trying to just have an idea. What are we talking about here? What is the revenue? If it’s absentee especially? What am I looking to on the average make yearly? That’s making me even want to invest in this.

04:26 – Jerry Diza (Guest)
That ranges right. I mean you can find a little small. Yeah, I’m just going to use urgent care, for example urgent care center. You know, maybe in a rural area, maybe it’s doing $600,000, $700,000 a month in revenue, a year in revenue, right. But then you can get another urgent care center, let’s say in LA. Right, it’s doing three million in revenue. Well, the multiples and the way it’s going to be totally different. There’s no. I can’t just say, well, yeah, this is what the average goes for.

04:53 – Samuel Adeyinka (Host)
But can you say on average, you know you’re making 20 percent profit, 50 percent profit?

04:57 – Jerry Diza (Guest)
Oh, yeah, yeah yeah, yeah, no, yeah. On profit margin, I mean you’re doing good at 25% to 30%, like med spas. That’s typically what they shoot for is 30%. It depends on what level, too right. If your revenues are only, let’s say, $700,000, $800,000 a year, versus another same practice at $2 million a year, your profit margin is going to be a lot bigger at the $2 million level because your labor costs are the same. So my labor cost is fixed now, but what’s going to change is my cost of goods. But everything else my rent, my utilities, my labor, so so it also goes depends on how is it being run right? How good is the owner running the practice?

05:37 – Samuel Adeyinka (Host)
Do you, uh, do you guys consult there, or is it? You just broker the deals and it’s yeah, we’re advisors too.

05:44 – Jerry Diza (Guest)
We provide advisory services.

05:47 – Samuel Adeyinka (Host)
Okay, what are the minimal investments? If I want to get a med, spa or an urgent care, what am I looking at spending if I want to just get my feet wet with this?

05:59 – Jerry Diza (Guest)
See again, it’s like this Well, how much does a car cost? Well, it depends, right? No, no, I can answer that.

06:05 – Samuel Adeyinka (Host)
I can answer that I can say it Okay.

06:07 – Jerry Diza (Guest)
How do you answer that?

06:09 – Samuel Adeyinka (Host)
If you want a beater just to get some wear under $30,000.

06:12 – Jerry Diza (Guest)
A beater. How much how?

06:14 – Samuel Adeyinka (Host)
much If you want a beater, just to get some wear under $30,000.

06:29 – Jerry Diza (Guest)
If you want something high end, 60 and up, see, I just answered your question, okay, well, okay, I don’t know how to answer that because, again, every, every business is run differently, right, you can have the same exact business, literally a block down the road and it’s run completely different, I guess.

06:37 – Samuel Adeyinka (Host)
I’m asking I don’t know how to answer that what is the minimum amount for for what? For the kind of businesses you guys broker? What is the smallest investment someone can make to have one of these entities?

06:48 – Jerry Diza (Guest)
Okay, so we don’t have on our side a minimum price for a business, right? I mean, what we shoot for is again a business that has revenues between $1 million to $20 million a year. So let’s just say at $1 million a year. Okay, let’s just use just a blanket statement here A med spa making $1 million a year, how much would that cost? Okay?

07:02 – Samuel Adeyinka (Host)
let’s just use just a blanket statement here. A med spa making a million dollars a year how much would that cost?

07:05 – Jerry Diza (Guest)
Okay, a med spa making a million dollars a year. Let’s say it’s absentee run. Okay, the owners there may be two days a week providing injector work, or maybe one day a week. Okay, so semi-absentee run In a good location. So let’s say it’s located in a city by Beverly Hills, on a main thoroughfare, lots of traffic and it’s got good staffing to provide. You know, there’s no issues with the personnel and it’s running at a 25% profit margin.

07:34
Okay, so it’s making $250K a year out of a million. Okay, so that might sell for maybe a three to four X multiple. So three times $250K is $750, right, four times would be a million. So three times 250K is 750, right, four times would be a million. Now, depending on the buyer, different buyers will pay a different multiple right. So strategic buyers might pay a little bit less, private equity might pay a little bit more. Or that doctor who’s tired of working at Kaiser just says you know, I’m so burned out of working at Kaiser I want to go out on my own. I’m going to pay a premium. He’ll pay more because that specific med spot is located a block down the road from his house right.

08:09
He’s used to driving 45 minutes each way to get to Kaiser. Well, yeah, there’s value to that. So the price range will range between three to four X multiple, depending on the buyer.

08:21 – Samuel Adeyinka (Host)
Got it, got it. How often do people buy these businesses from you? All the time, all the time, and so how often is that happening? Is it usually what you see is what you get, or do you have a lot of scenarios where they invested in a med spa that was only doing less than a million, but because of their management, it’s now doing four or five million?

08:45 – Jerry Diza (Guest)
I mean that’s the goal. I mean that’s the ideal for a buyer is that they find an undervalued business right when they can come in there, do minor changes and then bring up the revenues, which brings up the value, brings up the multiple, and then they sell it down the road. Definitely, absolutely. I mean that’s what most buyers want.

09:02 – Samuel Adeyinka (Host)
Right, and do you guys, does your company? Because you’re saying you’re consulting, it sounds like you’re heavily involved. So are you guys getting a piece of that? And all the companies you’re working with you guys are getting a piece of those as well?

09:13 – Jerry Diza (Guest)
So there’s two routes, right? I mean, if we’re like, for example, my last client, she had a high volume med spa, you know, and I worked for for over a year. But more on, just you know, she would just call me, you know, once a month just to say, hey, what do you think about this, what do you think about that? So that was just very, you know, very, very minimal, right. But I gave her tips so that when we took it to market it would sell for top dollar. That’s different than where I have doctors that have hired me to do due diligence for them and go and deep dive into, let’s say, a medical spot that they’re looking to buy, right, and they’ll ask me to look into the labor costs and to the cost of goods and to the way it’s being run. That’s different. We charge for that but we don’t charge for the basic. Oh, you know, I’m thinking of selling my company next year. Can you give me some advice, right? Or tell me how it’s running?

10:09 – Samuel Adeyinka (Host)
Because it it’s running because it’s not as time consuming for us, but either way, they’re going to get help from us because obviously our goal is to get the business to top value so that when they do sell it down the road, right, everybody wins. Wow, this is fascinating, okay. So do you have situations where someone’s like hey, I have half a million, I want to buy a business. I have no idea what I want to buy. I want to buy something that’s going to make me some money. I want to be in healthcare and I love the reputation you guys have built. Let’s talk. Do you guys do something like that? Or the person needs to have more people Not so much.

10:31 – Jerry Diza (Guest)
Yeah, that’s not something Only because we don’t have the time to do that right. That’s very time consuming, and I’ve, so it’s hard when you come to me. Basically, we have listings, right. If you go to our website, you’ll see what we have for sale. If one of those fits your criteria, then great, let’s talk, but I can’t guide you as to what business you should buy.

10:56 – Samuel Adeyinka (Host)
That’s so subjective, right, right, right. But you will guide. If they buy any of those businesses on your site, you will work with them to make sure it gets profitable.

11:08 – Jerry Diza (Guest)
And you know what you guys negotiate as a working yeah. Yeah, I mean, you know, I try to be as transparent as possible and I tell them what I think is happening in the business and what they can possibly do to increase revenues. But the reality is most of my buyers are high net worth clients and they’re very sophisticated, financially astute. They don’t they know what they’re already going to do without before I even talked to them.

11:23 – Samuel Adeyinka (Host)
Gotcha.

11:23 – Jerry Diza (Guest)
Especially strategic buyers. Strategic buyers they might already own two or three med spas. They know what they’re doing. They don’t need me, they just need me to find the deal.

11:32 – Samuel Adeyinka (Host)
Gotcha, gotcha, that’s cool. And then when you say find the deal, if I wanted to buy a med spa and I trusted you guys would be the range, can you make it happen? And then you guys will work to try to make that happen.

11:45 – Jerry Diza (Guest)
Yeah, that’s more of a search fund type thing, where you’re coming to us to help you search for a business. So we’ve done that in the past. But we charge for that, right, because it takes additional time for me to take my resources to put someone on that and track that down. But yeah, we do that type of stuff but and track that down. But yeah, we do that type of stuff, but typically we find, okay. So most of my clients are all my clients are sellers, right they’re. We are looking actively, looking daily for businesses that are looking to sell. Okay, that’s what. So we’re sell side MNA, right we’re. We are on the sell side Cause that’s where the that’s where everything starts, without a listing you have nothing to sell.

12:25
Right Okay. So it’s important that that that’s where everything starts. Without a listing, you have nothing to sell, Right, Okay? So it’s important that that’s what we’re doing on a daily basis is looking for more good listings so we can help the buyer. Otherwise, we can’t help the buyer.

12:35 – Samuel Adeyinka (Host)
No, I get it. I get it and you tell you have a good mix. You have all kinds of business professionals. Do you ever have medical sales professionals as in, like a? A rep that you know made a lot of money and now he wants to branch out, do something different ever oh yeah, oh yeah, really yeah, okay.

12:54 – Jerry Diza (Guest)
So yeah it just it just goes back to the money, right. I mean, if you’re, you know, if you want to be a business owner, you’re going to buy business. You know the nice part is financing is it’s actually easier to get financing for a business than it is a house. Because when a buyer looks for a business, the bank, the SBA, lender, is looking at the business primarily Okay, what type of profit is it doing? Can it cover the debt service on the loan, right? And secondarily it’s the buyer. Now, of course, the buyer better have experience, right, he better you know you can’t be a restaurant owner and all of a sudden he wants to buy a medical practice. That that won’t fly, right. But you know, if you’re, you know, for example, like you said, a meds a sales rep, let’s say you’re a medical spa sales rep, you work for Galderma, you work for for, for Allergan, you know the industry you’ve been doing it for the last three years or whatever else that you’re, you’re already in the industry.

13:50 – Samuel Adeyinka (Host)
Yeah, no, this is um. Okay, how much you know and you don’t know exactly. But give me a percentage. What’s the percentage of medical sales reps that are your customers? Yeah, not so much not so much there. There probably I’ve ran into.

14:20 – Jerry Diza (Guest)
Well, in the last I’m trying, big restaurant deals that fell apart because buyers got scared. So I had to reinvent and re-pivot and say, okay, what businesses can we sell that’s recession-proof, sba-financeable and have a high net worth client base and of course it was medical.

14:38 – Samuel Adeyinka (Host)
Your business is cool it is I like it. You’ve been around for five years, but give us a story, man. How did you go from what was happening before the five years restaurants and then how did you get into this? Give us a story, Okay.

14:54 – Jerry Diza (Guest)
So, again, I started out in residential real estate, right. So back then, this was 20-some odd years ago I started in residential real estate. I was looking for a side hustle. So I started looking at pizza restaurants a small little pizza place and a Baskin Robbins franchise, right. And that’s when I came across business brokers and I thought, oh wow, what were you doing before that, before real estate?

15:15 – Samuel Adeyinka (Host)
Yeah.

15:17 – Jerry Diza (Guest)
Oh man. Well, I don’t know I did, I was I believe it or not. I was in law enforcement.

15:21 – Samuel Adeyinka (Host)
Okay, Okay. So you were a police officer, State investigator, so you went from school state investigator and then state investigator to real estate.

15:32 – Jerry Diza (Guest)
Well, it was actually from school to LA County Probation Department, probation Department to the state as an investigator, then investigator, then doing real estate and then eventually went straight into full-time real estate.

15:46 – Samuel Adeyinka (Host)
I always want to catch when the big pivotal moments happened that kind of led you up to the success you’re having today. So you know what happened, where it was state work, and then suddenly you’re saying no, I’m about to this real estate thing and go all the way oh, that’s a good question.

16:00 – Jerry Diza (Guest)
I wanted to move to hawaii and so when I moved to Hawaii right, I had you know that was my dream was to live in Hawaii. So obviously I gave up my stay job and then when I went to Hawaii I got into real estate, into mortgage loans and real estate, and that’s how, that’s where I learned the business.

16:18 – Samuel Adeyinka (Host)
Okay, how long were you doing real estate before you want to make another pivot, and why?

16:25 – Jerry Diza (Guest)
How long were you doing real estate before you wanted to make another pivot and why? Oh man, I’ve been doing real estate for over 20 years, 20, 25 years, and then I just got tired of the vaulted ceilings and the granite countertops and that type of thing, and I liked watching Shark Tank, I liked business and I thought you know what? Remember, I was looking at side hustles to begin with. I was looking at basketball and franchises. Begin with, I was looking at basket, robin franchises and pizza places, and that’s when I realized, wow, there’s people that sell this, and so I added business brokerage it’s called business brokering, right so into the real estate business. And then I kind of just slowly transitioned out of residential to businesses and then I decided to specialize in restaurants. So I have a company that’s still around Pacific Restaurant Brokers in Orange County, and so that’s what I did since 2015. And then again, when COVID hit, we had some nice deals in the pipeline restaurant deals and those fell apart because everyone’s scared right.

17:20
And that’s when I had to pivot the company and say, okay, what else can we sell Again? That’s COVID proof, easily financeable with the bank and good, high ticket items. So that was obviously medical.

17:36 – Samuel Adeyinka (Host)
And so in 2020 Hold on, hold on. You say obviously medical, because in your opinion, you just said medical, or you had a discussion with someone, or somebody highlighted that to you. How did you conclude on medical?

17:48 – Jerry Diza (Guest)
I just sat down and thought about it. Okay, what industry is recession-proof?

17:52 – Samuel Adeyinka (Host)
Well, everyone, you can’t shut down a medical clinic right.

17:57 – Jerry Diza (Guest)
So that was an obvious choice, right? You can’t shut down medical and they’re high net worth clients right, I mean think about the guy who buys an average $300,000, $400,000 restaurant right. I mean, they’re going to be their day-to-day. They’re not as financially sophisticated as someone like a doctor, right?

18:15 – Samuel Adeyinka (Host)
Actually, doctors are notorious for being the worst financially around. That’s true too. That’s true too.

18:21 – Jerry Diza (Guest)
But you understand what I’m saying in terms of the net worth, right.

18:24 – Samuel Adeyinka (Host)
It’s easier for them to buy their amount of resources, the resources they can spend. Yes, yes, that’s right.

18:31 – Jerry Diza (Guest)
And so it was just a natural. Oh yeah, medical is a clear choice.

18:37 – Samuel Adeyinka (Host)
So that’s when we pivoted. Tell me, first of all, how big is your team? We are five. Okay, five people. Yeah, was it a deal that happened, that you said okay, guys, we’re here, this is the space, this is the right space, all engines on this space. Like you know what happened.

18:58 – Jerry Diza (Guest)
Yeah, my first deal was it was a referral from a medical-based attorney. He referred me a medical me a lab supply company, so they supplied labs with reagents and supplies and they also did consulting for the labs. And that was my first sale in the industry. And after we closed that deal I thought, guys, this is it, man, this is where is where we need to be at. You know, some of my guys followed, some of them didn’t, and that’s okay. You know some people you get really comfortable with with, in this case, restaurants that they don’t want to. It’s hard for them to shift over, right.

19:35
You know, but I’m, I’m an entrepreneur, I go where I think that the deal’s so. But that was it. Yeah, that first deal, our first year. At that first deal, that was, that was my game changer. I said okay, I’m all in now. I mean you know once you’ve yeah, yeah, and you know cause it was.

19:51 – Samuel Adeyinka (Host)
It was a nice transaction, it was a six figure commission, you know after that, it’s hard to go back to the smaller, you know, but this is, this is fascinating. And at that time did you have a team of five?

20:04 – Jerry Diza (Guest)
No, it was, I think, me and a couple other guys back then. So actually I had a couple of sales reps from the medical spa industry that are working for me part-time. So they’re out there now making the transition.

20:20 – Samuel Adeyinka (Host)
Hence the focus on med spas. What’s that? Hence the focus on med spas.

20:24 – Jerry Diza (Guest)
Yes, for them, them it is. I also sell. Like I said, my first company was a lab supply company. I actually have another one for sale right now, yeah, and then I also have a medical lab for sale out in Texas. So there’s just different. It’s just whatever comes along in the medical space that I think that is something that I want to sell, I’ll take. So I’m pretty choosy. I don’t just take anything that comes across my, my, my doorstep. So a lot of brokers do I, just I’m not that type of broker.

20:50 – Samuel Adeyinka (Host)
Sure, sure, sure. So if I’m a medical sales rep and I’ve been in the game for 25 years, I have millions in retirement. I have maybe one or 2 million to spend and I’m thinking, you know what, I’m ready to exit. I want to go buy a business. I’m going to look up what to buy. Is the route you’re talking about a great route to like? Is that something someone should consider if they’re trying to figure out what to do next?

21:20 – Jerry Diza (Guest)
Or would you say? Not really, it’s very nuanced and it’s just case by case basis.

21:24 – Samuel Adeyinka (Host)
Oh no you mean become an M&A advisor. No, no, no. I mean to just be someone that become an entrepreneur that buys a business through an M&A advisor.

21:31 – Jerry Diza (Guest)
Oh, yeah, I mean, how else are you going to find a company, right? I mean, usually it’s through a business broker or an M&A advisor, depending on the size and the focus of the business. But yeah, I mean, otherwise it’s hard to find. I mean most if you go online. I mean there’s different business finding websites, right, most of those businesses are put on by business brokers and M&A advisors. Okay, but I thought you meant for a sales rep to become an M&A advisor. That, to me, is a good pivot.

22:02 – Samuel Adeyinka (Host)
Okay, we’ll talk about that too, but that wasn’t my initial question. So, with someone going to an M&A advisor to think about their next act, you talked about earlier how most people that find you or not even most, but a lot of people that find you they’re entrepreneurs. They’ve been doing this, they know what they’re doing and they’re like just find me the right deal or I like the deal that you have on your website. You know that doesn’t make sense. Is it all everything that I want? It is great, let’s go.

22:27
But then you also shared that you have people that want the help. Right, they want the support, they want the business, they have the funds, they know the industry, but maybe they haven’t ran a business before. Would you recommend? If I’m a sales rep and I’m on my outs and I’m looking for that next thing and I want to become an entrepreneur, is it as easy as well? I’m going to call Jerry. Jerry’s going to talk with me, I’m going to show Jerry I have the funds to pay to buy this and then Jerry’s going to help me take this company to the next degree, or not quite.

22:57 – Jerry Diza (Guest)
No, no, those are so people that do that are like consultants, like, like. For example again, I do specialize the medical spa space. If you go to our website, you’ll see under our resource page, we have consultants and that’s what they do, right, they like. If I get a client, a call from a client who says, hey, I want to sell my medical spa and and the revenues aren’t so good, I can give them some advice, but I’m not going to be there on a weekly basis with them to show them.

23:20
Okay, these, this is the nitty gritty stuff, right. There’s med spot consultants or just business consultants that specialize in certain sectors, that help with that, and then you can hire them. They’ll do a much better job than someone like me, cause my, my time is and focus is selling a business, not helping you run your business more efficiently Right. So helping you run your business more efficiently right. So I’m not the best fit for that, but there are consultants out there that will, for a fee, will, help you ramp up your business and take it to the next level.

23:47 – Samuel Adeyinka (Host)
Yeah, so there’s the old adage and maybe it’s not an adage, but there’s a saying that goes business is very hard to run and most businesses don’t make it past five years. From your vantage point and what you do, do you agree with that or disagree with that?

24:04 – Jerry Diza (Guest)
Yes, okay. So let’s qualify that the businesses that don’t make it past the first five years. Usually they’re startups, right? The guy just decided. He woke up one morning and says, okay, I want to start my own business, and now he’s doing everything from A to Z. That’s much different than someone who buys a business that’s already got a three-year history, has employees and has nice profit margins. Someone’s already did the hard work for you. That’s why you’re going to pay a premium for this business that’s already existing. It’s called an ongoing concern. Okay, a premium for this business that’s already existing. It’s called an ongoing concern, okay. The reason why is because the probability of that failing is way lower now because it’s been in business for the last three years. It’s a proven racehorse, okay. So yes, to answer your question, most startups fail within the first five years.

24:55 – Samuel Adeyinka (Host)
Okay, would we say that most proven racehorses succeed.

24:59 – Jerry Diza (Guest)
Yeah, well, they’re proven right. I mean, if you’re remember, right, If I’m buying a business and it’s already been running well, right, all I have to do is just continue working it. I don’t have to figure out the, I don’t have to reinvent the wheel.

25:13 – Samuel Adeyinka (Host)
Sure, now, you did say earlier that most of these people know this business well, but you also have people that don’t know the business well. Right, right, yep, how, how, what percentage of that of your, of your clientele is that?

25:29 – Jerry Diza (Guest)
so I’m going to answer it by this way it all depends on the size of the business that I’m selling. For example, when I’m selling a multi-unit medical practice, you already know it’s not going to be the first time business. Know it’s not going to be the first-time business owner. It’s not going to be the doctor who’s just tired of working at Kaiser and wants to buy up another practice, right? Because you’re talking it’s like this. It’s like learning to drive a Toyota versus learning to drive a Ferrari, right? People that jump into Ferraris are already skilled drivers, but the guy that’s jumping into a Toyota it his first car.

25:58
Right, so it depends on the business right On a smaller medical practice or a smaller business, you know, a medical supply company. It’s going to be maybe a guy who’s tired of working for the man and wants to go out there and start his own and buy a business and so to replace his income.

26:19 – Samuel Adeyinka (Host)
What takes up the most of your clientele? Is it people that, yeah, well, just go ahead and answer that.

26:24 – Jerry Diza (Guest)
Most of my clients are high net worth clients, very sophisticated.

26:28 – Samuel Adeyinka (Host)
Okay, so you have a percentage that are not sophisticated, lower net worth, and I guess my question is is their success looks similar, or do they fall back into that category of the startup, the person that’s not sophisticated?

26:55 – Jerry Diza (Guest)
No, no, because usually, remember so, usually the buyer who’s less sophisticated, is still going to be, is going to be, working that business very hard because he’s got a lot at stake, right, I mean that’s a lot of money, right, You’re, you’re in debt for a million bucks or whatever, whatever you finance it out. So they’re very conscientious of making the business run. So it’s very rare that that it goes sideways. I mean the buyer must’ve really done something really really bad. Right, Just got lazy and this happens. I’ve had it where we’ve sold businesses where next thing you know, the buyer’s not there anymore. I mean he’s completely hands off.

27:29 – Samuel Adeyinka (Host)
He’s at the golf course. Oh, yes, yeah.

27:33 – Jerry Diza (Guest)
And now he’s asking us to put it back on the market. It’s like, well, wait, what happened? You bought this thing for a million. I back on the market. It’s like, well, wait, what happened? You bought this thing for a million. I’m doing the valuation it’s only worth 700. What happened? How’d you lose a thousand in two years? Oh, I mean how often you go to the store. Well, I’m at the golf course all the time, okay, well, you know when you buy a small business like that.

27:50 – Samuel Adeyinka (Host)
You’re not joking like people wow, you have.

27:54 – Jerry Diza (Guest)
You know if you have to treat it like your baby right, it’s your baby.

27:58 – Samuel Adeyinka (Host)
So then, you know, I guess I want to know what is, out of all the businesses you sell, what is the most truly absentee business, and how much time does that person still need to spend?

28:14 – Jerry Diza (Guest)
Okay, so let’s put away with that. I mean, when we say absentee, right, remember there’s still got to be an. When we say absentee, right, remember there’s still got to be an owner at the top running the show right. Even though you have your employees there, even though you’re not there every day, even though you’re at the golf course, you better be checking in on your business, cause no, remember the saying no one watches your money more than you do.

28:33 – Samuel Adeyinka (Host)
No one cares about your money more than you do.

28:36 – Jerry Diza (Guest)
Exactly Right, so yes, even though you have staff, you have a good manager running it. You better be on top of your manager, right? You better be checking up on your PNLs monthly and look at your, your, your data, right? Why is my cost of goods running at such and such? Why isn’t my labor costs at such and such? Why? Why is it my revenue in certain categories going down on on such and such? You have to be at least at that level monthly, looking at your business, if you want to succeed. A lot of owners oh, I don’t get my P&L until the end of the year. Well, I’m like okay, well, you haven’t been watching your business. That’s why you wonder why your sales have dropped by 20%, 30%.

29:15 – Samuel Adeyinka (Host)
And the ones that fall into that category. It’s probably because they have enough other businesses that they just it’s not that big of a deal.

29:22 – Jerry Diza (Guest)
There’s a variety of reasons why people take their eye off the ball right. A variety of reasons. There’s no one it’s like. Why do some people sell businesses? There’s so many reasons why people sell businesses. Right, it could be a divorce. It could be health issues. It could be they’re moving to see, to be with their grandkids. It could be they’re moving to see what their grandkids. It could be burnout. It could be retirement.

29:40 – Samuel Adeyinka (Host)
I mean, there’s so many reasons. What’s the most common For selling?

29:48 – Jerry Diza (Guest)
for me it’s retirement, and what’s the most common for just not paying attention to the business. Other businesses, yeah, some owners. They have their hand in different businesses and they just, you know, are spread too thin Okay. Or they don’t have a good management in place, right. They’ve taken their ball off their manager and now the manager’s running the show and the manager’s pocketing money. Right, and if you’re not on your P&Ls monthly, you’re not going to know that.

30:13 – Samuel Adeyinka (Host)
Yeah yeah, yeah, okay. Now you said that the most common person that’s selling is retiring. So I’m already assuming that they’re baby boomers and Gen Xers and the person that’s trying to make it happen. Now, if you have this population retiring, then the one that’s buying the business is not the same population. It’s going to probably be the younger population, and so I’m saying, are you seeing that or is it not quite?

30:37 – Jerry Diza (Guest)
Oh, yeah, yeah, no, absolutely. We’re seeing a lot of the younger generation coming in now and buying these high net worth practices or businesses.

30:45 – Samuel Adeyinka (Host)
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31:42
Now. In addition to that, there’s a lot of technology Online. You can do so much. Is it easier now to run a business? And maybe absentee is just I’m not using that correct way. Is it easier now to run a business and just really not have to be there because you have the technology, you have the resources and you have a lot of clientele that’s like rarely there, but they run a good business.

32:04 – Jerry Diza (Guest)
Absolutely. I just sold a four-unit medical practice last year and the owner who was not a doctor, was a nurse practitioner ran everything from her laptop, barely went into the different facilities, but of course she was on top of her managers and so she did a very good job on it.

32:27 – Samuel Adeyinka (Host)
Wow. And are most of your clientele individuals or are there groups? Individuals.

32:33 – Jerry Diza (Guest)
The $1 million to $20 million a year in revenue is usually the individual.

32:39 – Samuel Adeyinka (Host)
Okay, okay, this is fascinating. You’ve piqued my interest, okay, so let’s talk about it. So I’m a medical sales rep and I have a business and it’s going fairly well, and now I want to buy another business and I have what is the lowest amount. I know you said it varies, but you know, do you have businesses that you’re selling for half a million, or is everything at least a million, or is everything at least two or three million? I mean what’s?

33:07 – Jerry Diza (Guest)
Yeah, but again, our target client is a business with revenues of a million to 20 million. So at a million, the assumption is it’s running a 25% profit margin. So at 25% profit margin, even if I give it a 3X multiple, that’s 250K times three is 750K, right. So that’s about the lowest that I’ll work with. Now there’s some exceptions. If I see like a med spa that has a lot of potential and it could do, I know it’s an easy transition to sell to somebody, I’ll take that on.

33:45 – Samuel Adeyinka (Host)
But generally speaking, if it’s got less than a million revenue, I won’t. I’m just too busy, I can’t. I’ll refer them to other business brokers that have that one. Yeah, yeah, right. So you know, talk to us a little bit about how this business works, in the sense of how do you find your deals? Are you just on the scene somewhere or part of a community somewhere and just does it all? How does it all?

33:59 – Jerry Diza (Guest)
no, there’s all different avenues, right? Uh, e-blast, right, when you blast a certain uh uh sector, uh, we get a lot of referrals to get. My first transaction was a referral from a medical base attorney. Uh, we get referrals from from reps, sales reps because we offer a referral fee. We offer up to one percent referral fee on a on a transaction. I mean the last referral fee. We offer up to 1% referral fee on a transaction. I mean the last referral fee I sent out was 15,000. So we have different ways of getting business.

34:28
But there’s no one way that’s better than the other. They all work.

34:31 – Samuel Adeyinka (Host)
Sure sure. So if I’m a medical sales rep and I see all these chiefs of surgery and chiefs of neurosurgery and just all these high net worth customers of mine and I talk about and I find out some of them actually do want to buy a business, I call you and say, hey, Jerry, I think this, this guy, someone you should talk to, and if you guys successfully get something going, I get 1%.

34:58 – Jerry Diza (Guest)
No, it’s, it’s so remember we’re sell side right. So when you’re out there and you’re successfully get something going, I get 1%. No, no, okay. So remember we’re sell side right. So when you’re out there and you’re talking to business owners the guy who owns a medical lab, the guy who owns a medical supply company, the doctor and they’re saying, hey, I’m just burned out, I want to sell my company, I’m thinking about retiring next year. Or, yeah, I’m having problems with my partner, I’m thinking about selling. That’s when you would call us. And then when we talk to them, we put on the market, we get it sold. When we get paid at close of escrow, then we cut you out of a referral fee. So it’s on the sell side, because without a listing it’s hard to make a sale.

35:32
In our industry people don’t cooperate, for example, in real estate, right, you may have an agent in LA who’s showing a client a house in Orange County and there’s. Well, I guess there used to be. I know things have changed now in real estate, but it used to be that they would, that both agents would cooperate. In our industry nobody cooperates, right, because we don’t know. It’s a totally different field in that I don’t know who the buyer’s agent is. I don’t know if they understand confidentiality. I don’t know if they understand how a business works. I’m not about to take my listing off the market to work with a broker who I don’t even know knows what they’re doing and the reality is I’m going to find my buyer anyways. Right, I mean because I only target certain types of companies. I know I’m going to find a buyer on my own.

36:15 – Samuel Adeyinka (Host)
Got it.

36:16 – Jerry Diza (Guest)
So the listing is the most important, unlike buying a house.

36:20 – Samuel Adeyinka (Host)
You’re saying that all the energy goes into making sure this is the appropriate buyer, and that’s where most of the work is. We know we can sell this easily. We know that we need to scrutinize every single buyer to the nth degree, and that’s the difference between like buying.

36:37 – Jerry Diza (Guest)
Yeah, yeah, we want to. It’s called. You know, we want to vet the buyer to make sure that they’re not only financially qualified but but operationally qualified.

36:45 – Samuel Adeyinka (Host)
So how does a medical sales rep that’s listened to this episode and that’s thinking to themselves this is fascinating. I have customers all over the place. I want to buy uh. Looking for businesses to buy Uh, and I want to. I would love to have a revenue stream that is working with someone like Jerry. What exactly are they doing and what would you say to that?

37:03 – Jerry Diza (Guest)
Well, like I said, so we’re sell side. So reverse that right. Say instead of oh, I have clients that are buyers. Think about, I have clients that are sellers or eventually want to sell. That’s where we can help you, because once we sell their company, then we can give you a referral fee.

37:20 – Samuel Adeyinka (Host)
Got it, got it, got it, got it. Do you have any relationships like that now with?

37:23 – Jerry Diza (Guest)
medical sales reps.

37:24 – Samuel Adeyinka (Host)
Yeah, I do. Okay, I mean, talk to us. How does that look? What can someone expect if they were to go that route?

37:31 – Jerry Diza (Guest)
Okay, so our referral fee, again, is 1% of the sale price. So let’s say it’s a million dollar practice, right? A million dollar business. Well, 1% is 10 grand, right? All you need to do is send us either an intro through email or text text both of us the seller and our company and we’ll take it from there. We’ll qualify them. First of all, we’ll send out a non-disclosure agreement right, because we want to make sure that the seller knows that everything we discuss is confidential.

37:59
Once we send out the non-disclosure agreement and we have a time to talk with them, then we’ll analyze your company. We’ll find out about the company, how it’s operating. We’ll do a valuation, a no-cost valuation. I know some companies, many M&A advisors, won’t analyze a company without charging a fee up front, and usually it’s $3,500. We don’t charge that fee, right? We just want to be a service to the business community. So we’ll do a no cost valuation and then we’ll tell them what we think we can sell for, based on today’s climate and market conditions. And if they want to go forward, great. Then we’ll set up the sale and put it in the market and vet buyers and so forth and take it from start to finish. Start to close a Vesco.

38:42 – Samuel Adeyinka (Host)
So if I had, if I sent you 15 business seminars in the healthcare by the end of the year and I said, okay, all these guys want to sell their businesses. These are my contacts, have at it. And all of them were interested in working with you. I now get 1% of each one of their businesses.

39:00 – Jerry Diza (Guest)
That sells. Remember, it’s got to sell. Yes, yes, yes, that sells. I get 1% of each one of them.

39:06 – Samuel Adeyinka (Host)
Wow, that’s right. Okay, that sounds amazing. So I got to know. Then you know, if it’s that easy to just refer you and get paid, do you have reps that have just turned this into like a consistent thing, or it just doesn’t shake out that way?

39:27 – Jerry Diza (Guest)
I’ve had reps that have come over to be full-time M&A advisors.

39:33 – Samuel Adeyinka (Host)
I’m going to give you one better. I’ve retired reps.

39:39 – Jerry Diza (Guest)
I’m going to give you something that’s going to blow your mind.

39:41 – Samuel Adeyinka (Host)
Yeah, yeah, please.

39:43 – Jerry Diza (Guest)
I know sales reps right, sales rep. The typical day for them is they’re on the road right Eight, 10 hours a day knocking on doors, trying to get behind the gatekeeper right.

39:52
Trying to get to the doctor and they’re competing against, right. They’re competing against 10 other reps in the same industry that’s trying the same thing. Right, in our business it’s a little different, right, everything on our side is done behind the computer, right? Our clients don’t want us, don’t want us coming to their business because of confidentiality, all right, so so we reach out to them different ways, like I said, right, e-blast, uh, referrals from professionals, referrals from reps, so we’re not out there pounding the pavement like a medical sales rep would be right, and there’s not a lot of people that do what we do.

40:30 – Samuel Adeyinka (Host)
How many advice do you have? Yeah, because you’re saying e-blast and I’m thinking there must be so much competition, but I guess not.

40:35 – Jerry Diza (Guest)
No, think about it. How many business brokers do you know? Right, when you go to a party, how many business brokers are there? Right, there’s very few of us. And even within that few, how many of them specialize in medical practices? Right, so it gets smaller and smaller, and that’s so. It’s kind of nice on our end, because I don’t have a lot of competition.

40:57 – Samuel Adeyinka (Host)
Sure.

40:58 – Jerry Diza (Guest)
So, and like I said so and so, like I said we, so we sell nationally. So, like I said, my last deal I’m here in California. My last transaction was in Tennessee. You think I was flying to Tennessee every week. No, everything was done online, right, zoom and and PDF docs, and you know, email, and that’s that business is done nowadays in our industry.

41:21
Okay, okay, so I’ve just you know, I’ve seen it’s all brain work. Okay, I got to figure out okay, what, how much is this business actually valued at what do I think I can actually sell it for Right? Then, once I have it, how do I make it attractive and appealing to a buyer? So when they look at it, they say, okay, I need to put an offer on that Right. And then, once they put an offer, I’ve got to make sure that when we get to the discovery call, that both parties are going to jive and that it’s going to go smoothly.

41:53
And then, once I get through the discovery call, then I’ve got to go into due diligence and make sure that when the buyers do their deep dive into the practice and the business, that everything is being provided smoothly to them, that they’re not getting scared away and that the seller is providing documents quickly. So I have to. I’m not going to say babysit, but I have to walk through, scared away, and that the seller is providing documents quickly, right, so I have to. I’m not going to say babysit, but I have to walk through this whole thing to make sure it doesn’t fall out.

42:04
Yeah, you have to facilitate the entire process Exactly Right, and during that due diligence process there’s a lot of things that go that’s going on right Lease transfers, employment agreements, non-compete clauses and I’ve got to make sure that everything goes smoothly and that that both buyer and seller don’t don’t get into an emotional, because it gets very emotional right when you’re doing your due diligence, when you’re buying a million dollar or 2 million, $3 million business, it gets very emotional. So you’ve got to be able to manage those emotions and keep everyone headed forward.

42:36 – Samuel Adeyinka (Host)
You’re the point person.

42:37 – Jerry Diza (Guest)
Yes, Because what happens is called deal fatigue. Right, by the second or third month, the seller’s tired of the buyer asking for all these documentations and all this data and stuff, right? And again they’re getting tired, right. So you’ve got to make sure that, okay, both parties are still seeing the light at the end of the tunnel.

42:57 – Samuel Adeyinka (Host)
You’re almost like a coach.

42:58 – Jerry Diza (Guest)
Yes, exactly, we’re a coach, we’re a psychologist, we’re everything. I can’t tell you how many times as an M&A advisor, I can’t tell you how many times I get sellers that just come to me Jerry, I’m so tired, I’m burned out. Blah, blah, blah. Remember, we’re almost there. Remember, this is your retirement. Remember you told me you wanted to sail off to the sunset. Okay, well, this is what it takes to make that happen. And remember, they’re paying millions of dollars for your business. So, yes, this is normal.

43:28 – Samuel Adeyinka (Host)
So there’s a lot of hand holding and a lot of massaging to make sure it gets to the finish line, right so, yeah, what are the and I know the answer is going to vary, but generally speaking, what are the standards that you would take on to try to sell? You know, like when do you say there’s no way I’m going to sell that business? Oh, okay, good question. Not obvious things like they’re losing money every year, but just like, if you know what are the detail, a little, a little more detail that says, nah, we probably wouldn’t do that yeah, good, good question.

43:58 – Jerry Diza (Guest)
So we have three. I look at three things right On the first call, first conversation, we ask okay, first of all, has the business been in business for more than three years? So if it’s a new business, it’s a startup. It just started a year and a half ago. Those are hard to sell because there’s a lot of risk still. So three-year mark, okay, three-plus years, plus years, revenues of a million plus. So it’s got to be a healthy business and it has to have staff staff of three or more, because now I know that the owner isn’t the superstar.

44:25 – Samuel Adeyinka (Host)
Sure.

44:25 – Jerry Diza (Guest)
Right, or he still may be the superstar, but I can advise him to transition and give more of his staff the work so he can spend more time at the golf course, which makes the business more valuable. So those are the three things that I’ll look at right off the bat.

44:42 – Samuel Adeyinka (Host)
Do you coach the businesses you take on? You just said that you’ll advise him, so that means there must be a period of you coaching the business to be more attractive.

44:52 – Jerry Diza (Guest)
Yeah, when I have that discovery call with the seller and they don’t meet either one of those two criteria, right, I will try to pinpoint what they need to do and give them advice on how to get there so that hopefully, a year from now, when we, when they call me, we’re sellable, got it Now. If you’re the owner now, it’s your choice whether you want to do that or not, but all I can do is give you some advice free advice, right, free advice that’s going to help your company sell down the road for a higher price.

45:40 – Samuel Adeyinka (Host)
So you’ve and you’ve done this for five years, so I’m going to gamble here You’ve probably seen a lot of what running a healthcare-related business looks like, doing it the right way or doing it the wrong way. You could probably assess that pretty easily. Talk to us. Talk to us. What are you know? What are the top three things? You believe any entrepreneur that is in trying to put themselves in a position to sell a business that you would definitely say that they have to have. Like if you, if you’re thinking about truly being a player that can sell your business, you got to see this.

46:15 – Jerry Diza (Guest)
Okay, first one is your, your financial records. They have to be clean. Okay, I can’t tell you how many times an owner has having their, their sister-in-law do the books. Okay, the bookkeeping right, and she’s doing it as a part-time thing. You know she’s probably working at target full-time and she’s doing this a part-time thing. You know she’s probably working at target full-time she’s doing this on the side.

46:33
It’s like, okay, when your revenues are, you know, are doing, when you’re doing a million dollars a year, you can afford a bookkeeper. Now, okay, you don’t need your sister-in-law, who’s doing this part-time after target, to do your book, because that’s the worst. Right, because all the numbers are all jacked up, okay. And then I, as the the advisor, have to have to sift through it, because when I take this to market and the buyer looks at it, they’re going to be scratching their head, right? So I’ve got to make sure that this document is readable, is legible for a buyer, right?

47:05
Okay so that’s number one. You’ve got to have clean books. Don’t be cheap on getting a bookkeeper. Don’t hire a bookkeeper once a year to do it at the end of the year. Have your books done monthly okay you need as an owner, you need to see your numbers monthly sure okay, that’s the biggest thing.

47:22
I advice I can give any, any. Any buyer, because I’m not a buyer. Any seller, because that’s the first thing a buyer is going to look at. Show me the books, show me the financials. Okay, number two make sure you’re not the superstar, right when, when I like, for example, I’ll just use a medical practice when I google that, the website for that medical practice, is it dr smith, you know, and associates, or is it uh la county? Uh medicine, right, it Don’t have the owner be the superstar.

47:56 – Samuel Adeyinka (Host)
Okay, so on that note, if you know a lot of businesses, the brand is just, the brand is just better than any business entity can be identified with. So you have Dr So-and-so, but when you look at the business, he’s very. He’s just not involved, but they’re using him for branding. Are you saying that? You know? How are you tying into what you just stated?

48:18 – Jerry Diza (Guest)
Okay, I’ll give you an example I had. I had a business just like that. Okay, it was Dr So-and-so, uh uh anti-aging clinic. The guy was killing, he was doing 4 million a year in revenue. I mean, that’s unheard of for this type of business. The problem was that it was his name everywhere. So I told him, Doc, you need to change this, we need to change this to, and he changed it. I won’t say the name, but, for example, LA Aesthetics Clinic Okay, that’s much more encompassing than Dr Joe’s Med Spa. Right, the perception now. Okay, this is not a little mom and pop, but it’s a bigger company.

48:55 – Samuel Adeyinka (Host)
Okay, so this is all pertaining to just what it needs to look like when you actually sell it. How do we just make it look that much more attractive? And from your experience, it looks way more attractive when it’s not just your name versus a business entity name.

49:12 – Jerry Diza (Guest)
Right. And the reason why is because, again, put yourself in the shoes of a buyer. If I’m buying a business and it’s Joe’s Hamburger Stand right, well, no, let’s go back to the practice. It’s Dr Smith’s. He’s the main person I go to see when I’m there. Well, what happens if Dr Smith moves on? What happens to the patient base? Well, you get a loose pie. You get 30% of them, right, because they were going there to see Dr Joe. He is the superstar, right? Secondly, when a buyer buys the company, let’s say again, you take Dr Joe out of the picture. How do they keep people coming back to that? Right, you’re going to have that attrition from clients. But when Dr Joe isn’t the superstar, he’s got providers under him. Okay, then it’s an actual business, right, the people are going to still keep coming to that business, regardless if Dr Joe is behind the, the, uh, the front desk or not, okay. So that’s what you want. You want a business that that’s not dependent on the, the owner or or the what employee okay, what’s?

50:24
number three well, number three wow, that’s a good one. Uh, you know, just make sure that you have you take care of any type of medical well, you have a clean business, meaning that you don’t have any issues with the medical board. You don’t have any issues with any patients that are trying to sue you for you know a botched procedure.

50:44 – Samuel Adeyinka (Host)
I see that a lot.

50:46 – Jerry Diza (Guest)
Yes, yes, in fact, I just got a call yesterday from a doctor who had his license revoked. So he wants to sell his medical spa, which is still sellable because, thank God for him, he wasn’t the superstar, right. So there you go. Lesson learned, yeah. So again, make sure there’s no medical board issue. Make sure there’s no workman’s comp issues. Make sure there’s no issues with the patients, right, because a buyer wants to buy a hassle-free business, okay. So those three things is what I would say right off the bat. Make sure that you’ve taken care of that before you, before we. Well, we have to take care of that before we take it to market.

51:22 – Samuel Adeyinka (Host)
Yeah, yeah, okay, okay. So those are the top three things that need to be there. What are the top three qualities you’ve seen in the people that are doing this? You know where and you’ve been doing this it seems like long enough where you can probably assess someone off of a short meeting and say, you know what, yeah, this guy’s probably going to deliver, or I don’t know about this one. What are those? You know character traits that you identified.

51:47 – Jerry Diza (Guest)
It’s people that that have the drive and the ambition, because this is, you know it’s. You’re going to get rejection as well, but not anywhere near as a medical sales rep. But you know you’ve got to be able to be very disciplined and make the calls and make the emails and get back to clients. Right, don’t spend half the day at the golf course. I mean, we have that. People in business brokers like they think, oh, I just and don’t get me wrong right, Like, for example, when you only do one or two deals and they’re big deals, you know, depending on how much you want to make. Well, okay, that’s how much you have to work, right. So it goes back to your first year. It’s going to be the hardest because you’re out there, you’re making a name for yourself, right, you’re getting your name out there, people, what you do. So it goes back to that discipline, that drive. We’re all independent contractors so we don’t get paid until we close the deal.

52:38
So, you’ve got to be able to hang on and I’ll be honest with you my first transaction didn’t close until, I think, eight months down the road, because it takes time to find the right business, and then it takes time to find the right business, and then it takes time to find the right buyer, then it has that due diligence period, right. But the payoff is when you close that first deal. You know it’s a six-figure commission.

53:00
Yeah so how many do you have to do in a year to make a comfortable living for yourself? And so it goes back to that mentality of okay, yeah, this is not a quick sale, You’re not going to get rich tomorrow, You’re not going to make, you’re not going to get rich tomorrow, You’re not going to make a living tomorrow, but it’s a career. Once you get your career off the off that ground the first year now, now.

53:19 – Samuel Adeyinka (Host)
it’s nice, right, you got to have the grit to see it through.

53:22 – Jerry Diza (Guest)
Yes, it’s a long term commitment and it pays off really well.

53:26 – Samuel Adeyinka (Host)
So I know that every deal is different, but what is the average sales cycle for these kinds of deals?

53:31 – Jerry Diza (Guest)
So when you say sales cycle, you mean the time to sell.

53:35 – Samuel Adeyinka (Host)
Yeah, how long does it take when you have somebody that has a business they’re ready to sell and it’s time to make it happen and you find qualified buyers? Is it overnight? Is it months and months, and months? Is it a couple of weeks?

53:46 – Jerry Diza (Guest)
It’s going to take. Okay, so we have. So let’s say, once you find the buyer right and you do the discovery call and both buyer and seller are agreeable, okay, then we go into the due diligence phase. That due diligence phase again, that’s where the buyer hires their CPA and their attorney to do a deep dive into the business. Typically speaking, on a smaller business, it’s between two to three months for due diligence. Now, on the bigger multi-unit businesses, like I said I’ve just, I sold a four unit medical practice that took nine, almost 10 months for due diligence because there’s so much data and so much to go into Right.

54:20
So there so. But of course the paycheck was a lot bigger, right? So it all goes back to the size of the business and how clean the books and records are. Remember I told you it goes back to how clean everything is right.

54:33
There’s no issues with the business. Okay, so yeah, but minimum. Like, for example, I have a well, lord willing, it’s going to close here in the next couple of weeks, but I just listed a med spa, not even a month and a half ago, and the buyer came in. He’s in the same industry, he’s paying all cash, he wants to close asap. Wow, that’s the exception.

54:58 – Samuel Adeyinka (Host)
that’s exception to the rule.

54:58 – Jerry Diza (Guest)
Yeah, okay, usually they don’t close within within a month, month and a half of sure, sure, okay, but this in this case? The two doctors know each other. They both work for, have been directors for, the same company at one time, and so they speak the language they know, they know what they’re doing and it’s a quick deal.

55:11 – Samuel Adeyinka (Host)
Nice, so every so often.

55:13 – Jerry Diza (Guest)
You get that Every so often, but that’s not typical, that’s not common Right?

55:16 – Samuel Adeyinka (Host)
Okay, so what do you have to have as a buyer? What are the three things that a buyer, if they’re showing up to buy from you, they better have A, they better have B and they better have C.

55:27 – Jerry Diza (Guest)
Right. So first thing we ask is a non-disclosure agreement. They’ve got to sign a non-disclosure agreement with us before we even talk to them. Number two is they have to show us proof of funds. We need to show that these guys are actually capable of purchasing the business that we have. Thirdly, we like to vet them, so we ask for a little bit about their bio, who they are and what they’ve done.

55:46 – Samuel Adeyinka (Host)
What are you vetting them for? You say vet them, what are you?

55:48 – Jerry Diza (Guest)
vetting. I want to make sure they’re a good fit for the business right, because the last thing I want to do is waste my time or my seller’s time by putting a non-qualified buyer just to kick the tires, got it Okay or doesn’t have the necessary skills to make the existing company perform. Because, remember, a lot of my deals are SBA finance, meaning small business administration. The buyer goes to the bank. They get a loan through a bank that’s SBA guaranteed, so the SBA is going to be looking at them as okay. Who is the buyer as well? Do they have experience in this industry? Do we feel that they’re going to be able to run this company and continue the same sales as the prior owner continued?

56:33
the same sales as the prior owner If they have proof of funds, meaning that they have the down payment. I still have to make sure they can get the loan based on their experience. Now, if they’re coming in all cash in their private equity group, that’s a different story.

56:49
If they got all cash and they have a, a fund of you know 10 million dollars and they’re looking for a business, that’s different. Okay, I can, I can. So again, I I vet the buyer to see who they are, what, what’s their composition, and it’s worth my time and my seller’s time. So what if it’s someone?

57:04 – Samuel Adeyinka (Host)
that wants to change industries, though what if you know they’ve been doing this for so many years and they wanted to shake things up? They’ve shown competency, but the business has nothing to do with what they’ve been doing. How did they get qualified to buy a business from you?

57:16 – Jerry Diza (Guest)
So I’ll ask them, like you know, I’ll ask them how do you plan on running this company after you take over?

57:20 – Samuel Adeyinka (Host)
it you specifically, you are actually sitting down and you’re running a business, Right.

57:24 – Jerry Diza (Guest)
Because, see, the people don’t understand. The advisors are the gatekeepers, keepers, right, I’m not gonna. These are my listings, right, these are my clients, my sellers. So I’m very choosy as to who I let in into into this business. Right, and that’s my job, that’s what, that’s what my sellers hire me for.

57:41
So I’ve got to make sure that that the buyer again is qualified, that that that’s not going to run the business to the ground. So if I find, if I feel that he has some experience or some knowledge in the industry, okay, okay, I’ll give him a shot. If I ask him, for example, to buy a medical practice in California, at least you have to be a doctor. So I’ll ask him are you a doctor? If they say no, I’m not well, then I’m sorry, I can’t help you. But then if he says, well, I do have an MSO, okay, now that changes everything, because that tells me, first of all for him to know what an MSO is. He’s sophisticated enough that he’s done his homework. Now I’ll talk to them, right, but I won’t throw out. Okay, here’s what you need.

58:19
An MSO is a management services organization, by the way. So it’s a different way of owning a medical practice in certain corporate practice of medicine states. So if they come up with some sort of intelligent answer as to how do you plan on running this if you’re not a doctor, that determines whether I present him to my seller or not. I’m not going to babysit a buyer. I don’t have the time and it’s a lot of risk for the buyer. If you don’t know what you’re doing, don’t be buying a million-dollar business because you’re going to lose.

58:50 – Samuel Adeyinka (Host)
Yeah, yeah, no, I get it, I get it, I get it. This is very refreshing, Jerry. You know I learned a lot today on how these kind of things work and I’m so fascinated that your industry is as small as it is. You know, there’s not a lot of players.

59:06 – Jerry Diza (Guest)
Why do you think that is? You know, I think part of it is. Remember I told you sometimes you may not get paid for another year, so you’ve got to have that wherewithal to make it happen and stay in the game. And a lot of people don’t have that. They’re looking for a job. They’re not looking for a career.

59:28
Now for me, when I first started out, when I jumped into my first straight commission job, I was working in this was the back of the day a toy store called Toys R Us. Straight commission job. I was working and this was the back of the day a toy store called Toys R Us. Right. So here I am with a master’s degree, working evenings and weekends, working at a freaking toy store. But I knew in my head hey look, this is what it takes to become financially free. This is what it takes to break away from that corporate grind. This is what it’s going to take for me to supply well for my family. So I was willing to pay the price. A lot of people are not willing to pay the price.

59:53 – Samuel Adeyinka (Host)
When does that show up?

59:53 – Jerry Diza (Guest)
I hear they say, they will, but they don’t. Yeah, yeah, when does that show?

59:57 – Samuel Adeyinka (Host)
up? When do they kind of give it away that this person is not in it for the long haul?

01:00:01 – Jerry Diza (Guest)
Oh, I’ll know it within the first month If I say look, you need to spend a minimum four hours a day, five days a week, looking for listings. If they don’t if I don’t have, if they don’t have a listing by the end of the month, that tells me they haven’t been working. Cause, how, how is it that you’re out there pounding the emails and the you know the phone and not find someone who’s looking to sell within a month? Right, it just tells me you’re not working it Cause, again, there’s businesses. Not, it’s not like real estate, right? Businesses sell more often than real estate because it’s just a job, it’s just a business. It’s not someone’s home, right? Eventually they’re going to get tired, eventually they’re going to go through a divorce, eventually they’re going to have sickness, eventually they’re going to want to retire. So you’re telling me you’re out there four hours a day, five days a week, and you haven’t found one person to say, yeah, I’m that. Okay, that doesn’t compute.

01:00:52 – Samuel Adeyinka (Host)
I get it. I get it, wow. Well, Jerry, thank you for spending time with us today and explaining this fascinating world of business brokering in healthcare.

01:00:59 – Jerry Diza (Guest)
Sure my pleasure.

01:01:00 – Samuel Adeyinka (Host)
My pleasure If I have, if sales are listening to this right now, or even doctors, and they’re thinking to themselves. I want to see about his businesses. They go to your website and they find all this good stuff. What’s your website and how do they reach you specifically?

01:01:15 – Jerry Diza (Guest)
Oh yeah, our website address is the name of the company. I’m sorry, pacificrbcom. So Pacific R like restaurant and B like broker, so it’s pacificrbcom. That’ll get you to our website. My direct email is jdiza at pacificrbcom and my telephone number is 949-427-0304. Probably best to text me first, because otherwise, if I don’t know who it is, I usually don’t answer. But, yeah, I’d be happy to answer anyone’s questions and give whatever I can to help the community.

01:01:51 – Samuel Adeyinka (Host)
Absolutely All that will be in the show notes, folks. Okay, Jerry, we have one more thing to do today before we wrap this up. Are you ready? Sure, this is called the lightning round. I’m going to ask you four questions.

01:02:00 – Jerry Diza (Guest)
You have less than 10 seconds to answer. Hey, hey, hey.

01:02:04 – Samuel Adeyinka (Host)
Wait a minute, all right. First question what’s the best book you’ve read in the last six months?

01:02:13 – Jerry Diza (Guest)
The Bible. I love reading scriptures.

01:02:15 – Samuel Adeyinka (Host)
Wow, 220 episodes. I’ve never heard that answer.

01:02:18 – Jerry Diza (Guest)
Really that’s cool yeah. I give everything to the Lord. I mean the Lord, Amen.

01:02:23 – Samuel Adeyinka (Host)
Amen, yeah, wow, okay. Second question what is the best TV show or movie you’ve seen in the last six months?

01:02:31 – Jerry Diza (Guest)
Oh man, I hate to admit this, but you’ve probably heard of Yosemite, right, or was it that one? It just came out Yosemite, I think it’s called.

01:02:44 – Samuel Adeyinka (Host)
Yosemite who’s the actor?

01:02:46 – Jerry Diza (Guest)
Kevin Costner.

01:02:48 – Samuel Adeyinka (Host)
Oh, yellowstone, that’s what you’re talking about Yellowstone. I thought it was going to say that that’s great, all right.

01:03:00 – Jerry Diza (Guest)
So you know, there’s a I think it’s called 1883, which is the history before Yellowstone. It was his family when they first came from, I guess from the east to the west.

01:03:12 – Samuel Adeyinka (Host)
And.

01:03:12 – Jerry Diza (Guest)
I’m watching that now and that’s just, it’s just incredible. It just talks about the hardship that settlers had to face, and I I’m not a western type of guy, right I don’t really find it fascinating, but this for some reason 1883 just caught my my attention.

01:03:24 – Samuel Adeyinka (Host)
Wow, this is something you can be pretty interested by. I get it. I get it. Wow, I haven’t seen 1883, but uh, but now that you’re saying it when it, when it’s time to relax, maybe I will there you go. Third question what is the best? We want the location, the item and the restaurant. What’s the best restaurant you’ve had in the last six best, I’m sorry, the best meal you’ve had in the last six months.

01:03:48 – Jerry Diza (Guest)
Oh man, okay, so there’s a little hole in the wall in Cerritos. It’s, look at it, a free plug for the restaurant, right? A free plug Original Thai barbecue. They have the best pad thai, the best chicken barbecue and the best beef satay. I mean, we’ll drive. We’re about 40, 45 minutes away and we’ll drive there just for the meal Original Thai barbecue. If they’re listening, I better get a royalty on this or something. What the heck.

01:04:17 – Samuel Adeyinka (Host)
And then, last but not least, what’s the best experience you’ve had in the last six months?

01:04:22 – Jerry Diza (Guest)
Wow, in the last six months Okay, I think I mentioned to you right that we had a little house fire, so we’ve been hopping around from different airbnbs and for the summer we were at this airbnb, uh, with an ocean view, gorgeous ocean view from the bedrooms and the kitchen, and you open up your window and you would hear the ocean crashing. So that was like being on vacation for the first summer. Yeah, that’s cool with my family, of course.

01:04:49 – Samuel Adeyinka (Host)
Yeah, right, right thanks again for the time. Jerry, this is fantastic, yeah, more from what you do as you continue to broker these businesses and With my family, of course.

01:04:52 – Jerry Diza (Guest)
Yeah, right, right. Thanks again for the time.

01:04:53 – Samuel Adeyinka (Host)
Jerry, this was fantastic. Yeah, Samuel, good More from what you do as you continue to broker these businesses and sell these healthcare entities.

01:05:00 – Jerry Diza (Guest)
Awesome. Thank you. I enjoyed hanging out with you and having this time with you.

01:05:04 – Samuel Adeyinka (Host)
And that was Jerry Deza. You know this is cool stuff. There’s a whole world out there that anyone can be a part of, with the brokering businesses within healthcare. When I see opportunities like this, I think of maybe it’s a rep, that you’ve been doing it for a while and you’re thinking I want to shake things up a bit, I want to try something else. This makes so much sense. Or maybe you want to be a rep but you’re not sure you want to do it. But because of where you’re coming from, you’re still open to other things. When you see an opportunity like this where you can be in healthcare broker healthcare businesses with individuals that have high net worth that can easily make it happen, it’s an exciting proposition to be a part of.

01:05:55
As always, we do our best to bring you guests that are doing things differently in the medical sales space. So if you’re interested in this opportunity, make sure you check our show notes and send us a message, or reach out to Jerry on his website and make sure you tune in next week for another episode of the Medical Sales Podcast. I hope you enjoyed today’s episode and remember I have a customized and personalized program that gets you into the medical technology industry as a sales professional or any type of role for that matter. Become a top performer in your position and masterfully navigate your career to executive level leadership. Check out these programs and learn more at EvolvingSuccesscom by visiting our site, filling out an application schedule some time with one of our account executives and allowing us to get you where you need to be. Stay tuned for more awesome content with amazing interviews on the Medical Sales Podcast.