Should I Close down or Keep Trying to Sell?

Discussion in 'Growing and Managing a Business' started by Gm Raining, Feb 2, 2020.

  1. Gm Raining

    Gm Raining
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    I run a series of medical clinics and I am a doctor myself. All 4 of them are spaced in nearby towns, while the other is about a 5 hour drive away from the others. While three of them are doing quite well, (let's call them location A, B, and C) one is doing really bad (location D), especially due to its poor visibility and location. To be clear, location D, the one that is doing bad is one of the clinics that IS close to the others.

    I am a doctor and the owner, and I could easily bring in patients and be fully booked out every day. I have doing this for more than a year now and the stress is getting to me. The problem is finding another doctor to come in to this location. I am loosing money by keeping location D running, as even if I see patients booked out each day (bulk billing practice) there are more expenses.

    To make situations worse, it turns out the lease that was signed was a horrible one. I'm talking 15+ years (I know it's bad!). The price I am paying monthly is absolutely ridiculous, and when I signed I really thought doctors would be lining up to work here, I was wrong.

    I have attempted to negotiate with the landlord, but every time I call or schedule a meeting its always his agent that shows up on his behalf. Despite this I managed to bring down the lease price by around 20%.

    Even with this slight reduction, I am still loosing large amounts of money by keeping this clinic running. I have thought of just closing the whole thing down, so then I would only be paying for the lease, instead of the lease + other expenses such as doctor/software/electricity fees, reception wages, etc.

    I have attempted to sell with more than 6 people coming in to have a look and everything but nobody is serious. What are some sites I could try selling on?

    As you can see I really don't know what I should do. I told the landlord that I will most likely be shutting down and he just isn't responding.

    What should I do?

    Any response will be greatly appreciated.
     
  2. VITS USA

    VITS USA
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    In this situation, you should consult with a lawyer who could guide you legally regarding how you can discontinue the other clinics who is not profitable for you.
     
  3. Expert Coder

    Expert Coder
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    Since location D is losing money and causing you stress just close it. I was in a similar situation in 2009 just after the housing crisis. I had a business that was profitable for years but started losing money. I had another business that was still doing well. I clung to the first business as long as I could, until I was forced to close. In retrospect, I would have been far better off closing it a year earlier. When I finally closed the business that was tanking, my stress level went down unbelievably and I had more time to concentrate on the profitable business. Closing the first business was in effect pruning a dead limb from a tree so the rest of the tree could prosper. Sometimes less is more. I hope this helps.
     
  4. RobertFoster1977

    RobertFoster1977
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    At what point would you need to close down your business:)?
     
    #4 RobertFoster1977, Aug 12, 2020
    Last edited: Aug 13, 2020
  5. ApexHomeServices

    ApexHomeServices
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    If I understand right the location would work if it had a doctor. Seems odd you cannot interest a doc to go there when it is near your other locations that presumably you have been able to staff. To help you it would be necessary to know what doctors don't like about that location. For example, if it is because they think the location will not pull patients then you should put your practice there and backfill the location that does well with a new doc. But that depends upon the problem.

    If there really is no way to make it profitable and you cannot sell it then I would suggest sub-leasing it to some other kind of business that will work. I think you need to be strategic about what you do and not panic.
     
  6. PugwashEQ

    PugwashEQ
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    Hey OP- my first post, so please be gentle!

    It seems you have two connected but different issues
    1. Intrinsically D is unprofitable
    2. You have an onerous lease

    2. needs to be dealt with first. Have the lease reviewed by a proper commercial property lawyer (if you don't know one, i can recommend,Louise Crook at HCR law in Worcester). Whoever advised you on the initial lease, really should have shown you a chunk of caution over a 15 year lease. From the landlords perspective if you have a 15yr lease with no break clauses (which is very very unusual), then he won't care if you close the business or not- you will still have to pay the lease. What you need to know from a lease review are:
    1. On what basis can you break
    2. What happens when/if you break
    3. Is it a protected lease?
    4. can you sub-contract the lease
    5. What liability do you have if you stop paying the lease? (ie dliaps etc)
    6. If necessary can you undertake a Section 110 reconstruction and move the lease liability sideways so it doesn't damage the rest of the business?
    7. Who is the landlord- this will dictate their response to your demands.

    As to the profits- do you know why its not profitable? it seems strange that its busy, but making no money compared to the others? If you don't know exactly why,you really need to find out before you take any major steps. How does the branch P&L compare to the other branches?
     

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