Own a Business – 324
In today's episode, John delves into the exciting world of clinician entrepreneurship, offering insights into various paths to business ownership and shining a spotlight on healthcare franchise opportunities.
Whether you're looking to create wealth, escape burnout, or take charge of your career, this episode unveils valuable strategies for clinicians seeking new horizons beyond traditional practice.
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Paths to Business Ownership
If you're a clinician considering a shift from patient care to business ownership, there are several routes to explore. These paths include starting your own business from the ground up, purchasing an existing business, or leveraging the power of established franchises. Each approach has its unique advantages and challenges, and making the right choice largely depends on your goals, resources, and level of risk tolerance.
- Starting from Scratch
This path involves creating a business entirely from the ground up. It allows for complete creative control but demands substantial time, effort, and financial investment. You have the opportunity to build a unique business from your vision. - Buying an Existing Business
Purchasing an established business is a way to bypass the initial setup phase. You'll still need to invest resources, but you inherit an existing customer base and revenue stream. It's essential to perform due diligence and ensure the business is a good fit for your goals. - Franchising
Opting for a franchise provides a shortcut to business ownership. You buy into a proven business model with established branding and support. This route generally offers a faster start-up, but it comes with franchise fees and rules you must follow.
Franchise Opportunities in Healthcare
The healthcare industry offers diverse franchise options. These categories include senior care businesses, urgent care centers, medical spas, weight loss clinics, and aesthetics businesses. Investing in a healthcare franchise can provide a higher chance of success as the business model is typically proven. Consider factors like your expertise and marketability when selecting the right healthcare franchise.
Remember, researching and thoroughly assessing each opportunity is crucial to ensure it aligns with your business goals and values.
Summary
John emphasized the importance of choosing a path of business ownership that aligns with your skills and interests while considering factors like scalability, profitability, and insurance complexities in healthcare-related businesses.
NOTE: Look below for a transcript of today's episode.
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Links for Today's Episode:
- How This Consulting Business Grew Directly From a Patient Need – 289
- How to Build a Terrific Freelance Consulting Business – 145
- How to Improve Your New Business Odds of Success by Buying a Franchise- 292
- Want to Buy Your Own Senior Care Business? – 314
- Entrepreneur and Business Owner – Interview with Dr. Mike Woo-Ming – 019
- How to Start and Grow a Profitable Cash Based Medical Practice – 293
- From Here to There: Leveraging Virtual Medicine
- NewScr!pt
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Transcription PNC Podcast Episode 324
What Is the Best Way to Generate Income and Create Wealth?
John: Here's a question. What is the best way to generate and accumulate wealth? I guess I could add as a clinician or as a physician. There are lots of ways people have done it in numerous ways. The bottom line is you either have a very well-paying job that you do for a long time, that you put away a high percentage of your income, and then invest that in real estate or stocks and bonds. And at the end of your 30 or 40 years, you will have quite a nest egg and you can retire or it can be a legacy for your family. The more you save, the more it will accumulate and also the faster it will grow, particularly if it's in the stock market in general over a long period of time. But that's kind of a generic answer. The first part of the answer was that you have to have a high paying job. So you can kind of do that if you're in an average type of level of payment.
But for the average person in general, the way that I would normally answer that question, thinking a little bit deeper, is to do one of two things. And that's either to start investing in real estate early because it's usually an appreciating asset. And eventually, although it might require some active management in the beginning eventually, later you can switch over to more passively managed real estate investments. And it has a lot of tax advantages, which by saving the tax money, that accumulates also and accrues to your wealth.
But the other one that's probably more common than actually real estate ownership as a category, and that's owning your own business.
The difference between owning a business and working for someone else, which is basically working for a business is generally as the head of that business, you're probably the highest paid person in the business. So, that's number one. Number two, you are creating something that if you do it right, you can leverage other people. You can sell products. In other words, the income isn't just based on the work that you're doing, but the value that you're creating. That's why it's so good at creating really even high levels of income.
And the third part is that, like real estate, it's an asset that you can sell when you are ready to stop working that business. Now you can hire someone to run the business and it can continue to be an income source even after you retire from that business. But what most business owners seem to do, unless they want to pass it on to their kids, which in that situation, you should probably sell it to your kids at a reasonable price. But anyway, most people generally are going to cash out. So, it's kind of like a substitute for a 401(k) or Roth IRA or something like that.
So, you get that cash out at the end. Now, it might have accrued in value quite a bit, but at least at the time that I am recording this, capital gains taxes are much lower percentage than income taxes. You actually prefer to have the money instead of coming as income over time, going into the business, growing the business more quickly, and then selling that and then paying the lower capital gains taxes.
Now, I'm not a real estate expert. I'm not an accountant or CPA. These are just things that I've learned that I think are in general true. And there might be certain nuances that I'm not really going to address today, particularly since there are different types of business, some in which you're selling a product, you have the cost of the product and then what you earn on it. And of course, all the money you spend purchasing the product for sale is part of your overhead and expenses, so on and so forth. And selling a business, depending on whether it's mostly a service business or a product producing business, can be quite different.
But let's focus for a few minutes on that. Let's say that you are working clinically, you're in a hospital or you're in a group, you're a physician, you're a nurse, an APN, a PA, pharmacist, a therapist of some sort, and you're getting burned out and you're thinking I've got to do something else.
And again, from an employment standpoint, I could say, well, if you can get into a job where you have the opportunity in a nonclinical position to move forward over a short period of time, hopefully, or medium, to more leadership, directorship management, ultimately let's say as a physician to chief medical officer or as another type of clinician going from manager to a VP level job, that's going to set you up pretty well over time to make an income that's in the top 1% or 2% and you could end up becoming the CEO of some healthcare organization. Perhaps you get another degree. Nurses are typically often found as CEO for a hospital, nursing homes, things of that nature.
But I think as a clinician, if you're a little bit burnt out and you know you're going to want to change, one of the things you might consider doing is owning a business. How do I get from A to B? From doing what I'm doing, working for someone else as a clinician to owning a business?
Now, I say owning a business because there's different ways to get to the point where you own a business. Now, if you're a physician or even an APN in many jurisdictions, does owning a practice count as owning a business when we're trying to answer this question that I posed at the beginning. And my answer to that is yes and no. The problem is owning a small practice, a one person practice or a partnership, it's basically like being a craftsman or being an artist, meaning that the only time you earn money is by providing the service that you are personally providing.
In a family medicine practice, for example, you earn money by seeing patients face-to-face, writing them prescriptions, ordering them tests, and then having them come back and discuss those results. And you get paid for seeing patients face to face. Now you can do that on telemedicine and telehealth as well. Sure, you might have a small lab, sure, you might do some procedures, but the reality is that's a kind of business that's almost impossible to sell.
In fact, there was a time back 15, 20, 30 years ago where medium to larger practices were being bought out by basically investment companies. And they were paying high dollars because they had this feeling that they could leverage all those patients they were collecting, so to speak by buying those practices.
But the reality is that the whole thing collapsed and they ended up all selling the practices back to those physicians. And even now, if you were to buy, let's say a practice of an internist or family physician or someone who's not a proceduralist, someone who doesn't own a lot of equipment, like as opposed to let's say a dentist or someone that's doing a minor surgery in their office and or even in a surgery center. A hospital can only pay you a small amount for your practice because there's no intrinsic value because they need to take all the earnings from the practice and pay someone to do what you were doing, which leaves no excess income. No real bottom line if all your money's going to the salary of the staff and to the physician that's seeing patients.
And so, it's not really a good business unless you can do two things among others. But these are the two most important in my mind. One is you need to be able to have that business generating income, whether you're there or not. So, you need to have maybe other types of providers, medical providers, or some type of service that they can do that doesn't depend on you doing it. And then you can actually run the business rather than work in the business yourself. So, that's one.
And the other big one is to have more flexibility in your pricing. Basically to me that means doing a job, maybe owning a practice of a different sort, particularly one that does not have to deal with insurance companies. Because you know that payers want to pay as little as possible. And whether it's Medicare or private payers, big national payers, they really have been lowering your payments. In that sense, medical practice is not a great standalone business when you compare it to other businesses. So, that's my answer to that part of the question.
Now let's say that you're in that practice or you're working for a large corporation and you want to start a business. You could break that down into four subcategories of ways to get going. One is to start a business from scratch. Obviously that takes a lot of time and it will take money, not only because the business will take money to set up, pay accountants and pay your accountant and your lawyer to set it up. That's minimal. But then to pay for staff and pay for supplies, depending on what business you're going to do. And businesses take a while till they get going if you start from scratch.
You can get a little bit faster traction if you have some money saved up. And that's to buy a business. So, to just go out there and look for maybe one of the businesses I'm going to talk about in a moment and just talk to a broker or go online and try to find a business that the owner is trying to sell. And there's a whole process for doing that.
And mainly for that, the time factor is not a big one, although there is a time involved in investigating and vetting the business and doing your due diligence before you actually buy it. But in that timeframe you can be well under a year. It might be up to a year, but it can be well under a year. And when you do that, you're basically taking on a business that's already generating a sizable either salary for the owner, if they're kind of an owner operator or a bottom line that you can use to pay yourself, or to continue to reinvest in the business so that it grows more quickly or both.
Now, there's one way to cut the timeframe on starting a business, and that is to start a franchise. Because a franchise is a business that has already been demonstrated to be successful. And if you're considering a franchise that's been around for a while, they've developed and perfected all the policies and procedures, they put together marketing plans, and they've done other things to get this off the ground. They'll explain to you what the business structure should be. If you're going to need an office, the size of the office, if you're going to need supplies, if you're going to have to hire. Everything will be spelled out for you. That cuts down the time of starting a business from scratch, particularly if you want to do it in a field where there are a lot of franchise opportunities.
And the way to really accelerate that even further is to buy a franchise. You would buy a franchise business from the current owner, and that current owner or whoever started the business already spent the first 2, 3, 4 or 5 years getting it to be profitable. Hopefully has put in another five years or so demonstrating that the profits are growing or the net income, if you want to call it that, is growing every year. And so, while the time factor there is quite a bit less, the cost could be quite a bit more because you're going to pay some premium for purchasing that. You could buy the rights to a franchise for $40,000 or $50,000 and then fund it as you go along.
Depending on what you're doing by investing over a period of a year $200,000 or $300,000, and not taking a salary during that sometimes, you can get things going. But when you buy a business that's generating, let's say a year salary plus, I don't know, $100,000 or $200,000 of net income, then that business is probably going to cost at least two and a half to three and a half times the combination of those two. So, if you're paying yourself $100,000 and you have a net income of $100,000 on top of that, then you're going to end up paying anywhere from two and a half to three times that amount, which would be, three and a half times, $600,000 or something like that.
Most people in that situation are going to get a loan, either an SBA loan or use your own cash or maybe if you own your home outright, you could use that as collateral and get a pretty low interest loan. Banks like the SBA loan. A lot of businesses are sold with 80% of the cost being an SBA loan, which has paid off up to over 10 years, I think is the average. You of course could pay it off quicker.
That's something really to consider when you're in this situation where you've made a decision something has to change as long as it's not urgent. If you can hopefully make some adjustments in your current position to where you get some free time to work on this over time. And if you do that and you decide to go with the buying a franchise route, then it's just a matter of really vetting that sale and verifying that the gross revenues are stable and increasing, that the expenses are under control. And that there is a bottom line net income also that's going up over time. And even with an SBA loan for five or 10 years you should be generating income over that time to offset the payments you'll have to make to pay back that loan. And when you're done, you'll own the business outright and it will be generating income and additional bottom line, hopefully for you and your family.
You do that for 5, 8, 10, 12 years. And if it continues to grow, then the asset that you're going to have at the end of that time is going to be at least double what you paid for the business. So let's say you paid $600,000, it'd probably be worth $1.2 million or $1.5 million depending.
Now, things don't always go as planned. Most businesses fail within a year or two. Using a franchise or buying a franchise has a much higher rate of success because it's been proven. They still fail sometimes, but they do have a much higher chance of success. I think if you do something in the realm of something you know or you have easy marketability. I'm thinking for someone in healthcare, there are many franchises that you can get into that have existed for years. And I did some research and I obviously know about senior care because I've talked about that before and my wife owns a senior care business, which is basically in the home health field but it does not involve nursing care. It's simply for seniors in home caregivers.
But you can look at these different things and find that there's at least five major categories that are very popular now, the categories themselves are growing. And if you think about it, and I learned this from Mike Woo-Ming, the most successful businesses generally fall into one of three categories. First is that they involve working in some kind of relationship related business. Number two would be health and fitness related business. And number three would be something that has to do with learning about money or investing your money.
These are the three big ones, for example, for courses, for podcasts, for online businesses, for coaching. Relationships, health and fitness, and weight loss you could throw in there. And then the other one would be money. Making more money, avoid losing money, things like that.
Some of the franchises that I saw that fell into each of these categories were pretty interesting. Let's see, I've got a list here. In the fitness realm, there are just dozens and dozens of very successful franchises that have been out there for a long time. I'll just list off some names here off the list I created earlier. There's an F45 Training. There's Anytime Fitness, there's the Exercise Coach, Club Pilates and D1 Training.
Another one would be all the home healthcare type businesses. That includes things like Home Instead, Homewatch CareGivers, Amada Senior Care, Visiting Angels. That's the one that seems to be doing a lot of national TV advertising. My wife runs Home Helpers and there are dozens of other ones. These are all franchises.
Now, there are franchises in urgent care. And the thing about urgent care is it suffers from the same issues that can be found in working in a small practice. You can get busy, you can get burnt out. But I think if you could come up with an urgent care where you limit the risks and you do a cash basis only, and you just say, "Look, we're not going to be billing Medicare and Public Aid and even the insurance companies, because I've got to add two staff to do the billing. You get into arguments, you get huge accounts receivable that can go on for years and years, and sometimes don't get paid at all."
And so, if you could do an urgent care type of business where walk-ins come in, they pay cash, you provide whatever services you feel are comfortable. And maybe you don't call it urgent care. Maybe you call it quick care, maybe you call it something like the Walgreens and CVS used to have. I don't know if they're still doing. MedExpress is an urgent care that is franchised.
And so, if you want to get into that and the really Colorado small niche, they'll show you how to do it and it tends to have a lot less headaches, particularly if you can avoid billing those insurance companies.
There's a lot of controversy about whether you should jump on the Med Spa bandwagon. In a really extensive or complex med spa you're doing a lot of procedures, you've bought a lot of equipment. At least two people on my podcasts have started their own med spas without a franchise. I might put that off of the franchise list, but you could buy an existing med spa. In fact, there's a lot of sales these days of med spas selling to other individuals or to private equity firms, something like that.
Weight loss has been around forever. There are franchises for weight loss clinics. Some of them have their own proprietary high protein solutions. Some use regular diets, but there's something called Physicians Weight Loss Centers, obviously designed for physicians. Medi-Weightloss, InShapeMD, which is a newer one. I'm not vouching for any of these, by the way, but there are plenty to choose from, and you should go through and look and see if any of those are attractive to you.
The other one is sort of related, it's the beauty industry. You might call it the skincare aesthetics industry. These kind of overlap. Palm Beach Tan is a franchise. So, it's basically a tanning salon, but they do other things related to the skin. You've got Body Bright, Heyday Skincare, The Lash Lounge, which deals mostly with eyelashes. There's always beauty/skincare, sort of related to med spa, where the med spas usually have some of the more invasive procedures, like even liposuction and things like that.
These are just some ideas and if you ever were in private practice and did enjoy the business side of it, then I think starting a business, starting a franchise, buying a business, buying a franchise, or somehow converting your practice if you are in private practice, either to concierge medicine or direct patient care, something where you can get rid of the billing part of it, you can get paid basically for your services in almost real time with maybe doing some billing and you might have an accounts receivable that would extend to 15 or 30 days. That's a lot better than fighting with Blue Cross Blue Shield over some bill from a year and a half ago that they clawed back their payment for, which is what they commonly do to hospitals.
When that happens, of course, the bottom line is the hospital is going to ultimately have to pay the physicians less or they'll go out of business. That's what usually happens, and that's why you're seeing 30 patients a day, five days a week, and doing medical records at night and on weekends. So, that's what you want to get away from.
All right, that is everything I have to say today.
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Transcription PNC Podcast Episode 324
What Is the Best Way to Generate Income and Create Wealth?
John: Here's a question. What is the best way to generate and accumulate wealth? I guess I could add as a clinician or as a physician. There are lots of ways people have done it in numerous ways. The bottom line is you either have a very well-paying job that you do for a long time, that you put away a high percentage of your income, and then invest that in real estate or stocks and bonds. And at the end of your 30 or 40 years, you will have quite a nest egg and you can retire or it can be a legacy for your family. The more you save, the more it will accumulate and also the faster it will grow, particularly if it's in the stock market in general over a long period of time. But that's kind of a generic answer. The first part of the answer was that you have to have a high paying job. So you can kind of do that if you're in an average type of level of payment.
But for the average person in general, the way that I would normally answer that question, thinking a little bit deeper, is to do one of two things. And that's either to start investing in real estate early because it's usually an appreciating asset. And eventually, although it might require some active management in the beginning eventually, later you can switch over to more passively managed real estate investments. And it has a lot of tax advantages, which by saving the tax money, that accumulates also and accrues to your wealth.
But the other one that's probably more common than actually real estate ownership as a category, and that's owning your own business.
The difference between owning a business and working for someone else, which is basically working for a business is generally as the head of that business, you're probably the highest paid person in the business. So, that's number one. Number two, you are creating something that if you do it right, you can leverage other people. You can sell products. In other words, the income isn't just based on the work that you're doing, but the value that you're creating. That's why it's so good at creating really even high levels of income.
And the third part is that, like real estate, it's an asset that you can sell when you are ready to stop working that business. Now you can hire someone to run the business and it can continue to be an income source even after you retire from that business. But what most business owners seem to do, unless they want to pass it on to their kids, which in that situation, you should probably sell it to your kids at a reasonable price. But anyway, most people generally are going to cash out. So, it's kind of like a substitute for a 401(k) or Roth IRA or something like that.
So, you get that cash out at the end. Now, it might have accrued in value quite a bit, but at least at the time that I am recording this, capital gains taxes are much lower percentage than income taxes. You actually prefer to have the money instead of coming as income over time, going into the business, growing the business more quickly, and then selling that and then paying the lower capital gains taxes.
Now, I'm not a real estate expert. I'm not an accountant or CPA. These are just things that I've learned that I think are in general true. And there might be certain nuances that I'm not really going to address today, particularly since there are different types of business, some in which you're selling a product, you have the cost of the product and then what you earn on it. And of course, all the money you spend purchasing the product for sale is part of your overhead and expenses, so on and so forth. And selling a business, depending on whether it's mostly a service business or a product producing business, can be quite different.
But let's focus for a few minutes on that. Let's say that you are working clinically, you're in a hospital or you're in a group, you're a physician, you're a nurse, an APN, a PA, pharmacist, a therapist of some sort, and you're getting burned out and you're thinking I've got to do something else.
And again, from an employment standpoint, I could say, well, if you can get into a job where you have the opportunity in a nonclinical position to move forward over a short period of time, hopefully, or medium, to more leadership, directorship management, ultimately let's say as a physician to chief medical officer or as another type of clinician going from manager to a VP level job, that's going to set you up pretty well over time to make an income that's in the top 1% or 2% and you could end up becoming the CEO of some healthcare organization. Perhaps you get another degree. Nurses are typically often found as CEO for a hospital, nursing homes, things of that nature.
But I think as a clinician, if you're a little bit burnt out and you know you're going to want to change, one of the things you might consider doing is owning a business. How do I get from A to B? From doing what I'm doing, working for someone else as a clinician to owning a business?
Now, I say owning a business because there's different ways to get to the point where you own a business. Now, if you're a physician or even an APN in many jurisdictions, does owning a practice count as owning a business when we're trying to answer this question that I posed at the beginning. And my answer to that is yes and no. The problem is owning a small practice, a one person practice or a partnership, it's basically like being a craftsman or being an artist, meaning that the only time you earn money is by providing the service that you are personally providing.
In a family medicine practice, for example, you earn money by seeing patients face-to-face, writing them prescriptions, ordering them tests, and then having them come back and discuss those results. And you get paid for seeing patients face to face. Now you can do that on telemedicine and telehealth as well. Sure, you might have a small lab, sure, you might do some procedures, but the reality is that's a kind of business that's almost impossible to sell.
In fact, there was a time back 15, 20, 30 years ago where medium to larger practices were being bought out by basically investment companies. And they were paying high dollars because they had this feeling that they could leverage all those patients they were collecting, so to speak by buying those practices.
But the reality is that the whole thing collapsed and they ended up all selling the practices back to those physicians. And even now, if you were to buy, let's say a practice of an internist or family physician or someone who's not a proceduralist, someone who doesn't own a lot of equipment, like as opposed to let's say a dentist or someone that's doing a minor surgery in their office and or even in a surgery center. A hospital can only pay you a small amount for your practice because there's no intrinsic value because they need to take all the earnings from the practice and pay someone to do what you were doing, which leaves no excess income. No real bottom line if all your money's going to the salary of the staff and to the physician that's seeing patients.
And so, it's not really a good business unless you can do two things among others. But these are the two most important in my mind. One is you need to be able to have that business generating income, whether you're there or not. So, you need to have maybe other types of providers, medical providers, or some type of service that they can do that doesn't depend on you doing it. And then you can actually run the business rather than work in the business yourself. So, that's one.
And the other big one is to have more flexibility in your pricing. Basically to me that means doing a job, maybe owning a practice of a different sort, particularly one that does not have to deal with insurance companies. Because you know that payers want to pay as little as possible. And whether it's Medicare or private payers, big national payers, they really have been lowering your payments. In that sense, medical practice is not a great standalone business when you compare it to other businesses. So, that's my answer to that part of the question.
Now let's say that you're in that practice or you're working for a large corporation and you want to start a business. You could break that down into four subcategories of ways to get going. One is to start a business from scratch. Obviously that takes a lot of time and it will take money, not only because the business will take money to set up, pay accountants and pay your accountant and your lawyer to set it up. That's minimal. But then to pay for staff and pay for supplies, depending on what business you're going to do. And businesses take a while till they get going if you start from scratch.
You can get a little bit faster traction if you have some money saved up. And that's to buy a business. So, to just go out there and look for maybe one of the businesses I'm going to talk about in a moment and just talk to a broker or go online and try to find a business that the owner is trying to sell. And there's a whole process for doing that.
And mainly for that, the time factor is not a big one, although there is a time involved in investigating and vetting the business and doing your due diligence before you actually buy it. But in that timeframe you can be well under a year. It might be up to a year, but it can be well under a year. And when you do that, you're basically taking on a business that's already generating a sizable either salary for the owner, if they're kind of an owner operator or a bottom line that you can use to pay yourself, or to continue to reinvest in the business so that it grows more quickly or both.
Now, there's one way to cut the timeframe on starting a business, and that is to start a franchise. Because a franchise is a business that has already been demonstrated to be successful. And if you're considering a franchise that's been around for a while, they've developed and perfected all the policies and procedures, they put together marketing plans, and they've done other things to get this off the ground. They'll explain to you what the business structure should be. If you're going to need an office, the size of the office, if you're going to need supplies, if you're going to have to hire. Everything will be spelled out for you. That cuts down the time of starting a business from scratch, particularly if you want to do it in a field where there are a lot of franchise opportunities.
And the way to really accelerate that even further is to buy a franchise. You would buy a franchise business from the current owner, and that current owner or whoever started the business already spent the first 2, 3, 4 or 5 years getting it to be profitable. Hopefully has put in another five years or so demonstrating that the profits are growing or the net income, if you want to call it that, is growing every year. And so, while the time factor there is quite a bit less, the cost could be quite a bit more because you're going to pay some premium for purchasing that. You could buy the rights to a franchise for $40,000 or $50,000 and then fund it as you go along.
Depending on what you're doing by investing over a period of a year $200,000 or $300,000, and not taking a salary during that sometimes, you can get things going. But when you buy a business that's generating, let's say a year salary plus, I don't know, $100,000 or $200,000 of net income, then that business is probably going to cost at least two and a half to three and a half times the combination of those two. So, if you're paying yourself $100,000 and you have a net income of $100,000 on top of that, then you're going to end up paying anywhere from two and a half to three times that amount, which would be, three and a half times, $600,000 or something like that.
Most people in that situation are going to get a loan, either an SBA loan or use your own cash or maybe if you own your home outright, you could use that as collateral and get a pretty low interest loan. Banks like the SBA loan. A lot of businesses are sold with 80% of the cost being an SBA loan, which has paid off up to over 10 years, I think is the average. You of course could pay it off quicker.
That's something really to consider when you're in this situation where you've made a decision something has to change as long as it's not urgent. If you can hopefully make some adjustments in your current position to where you get some free time to work on this over time. And if you do that and you decide to go with the buying a franchise route, then it's just a matter of really vetting that sale and verifying that the gross revenues are stable and increasing, that the expenses are under control. And that there is a bottom line net income also that's going up over time. And even with an SBA loan for five or 10 years you should be generating income over that time to offset the payments you'll have to make to pay back that loan. And when you're done, you'll own the business outright and it will be generating income and additional bottom line, hopefully for you and your family.
You do that for 5, 8, 10, 12 years. And if it continues to grow, then the asset that you're going to have at the end of that time is going to be at least double what you paid for the business. So let's say you paid $600,000, it'd probably be worth $1.2 million or $1.5 million depending.
Now, things don't always go as planned. Most businesses fail within a year or two. Using a franchise or buying a franchise has a much higher rate of success because it's been proven. They still fail sometimes, but they do have a much higher chance of success. I think if you do something in the realm of something you know or you have easy marketability. I'm thinking for someone in healthcare, there are many franchises that you can get into that have existed for years. And I did some research and I obviously know about senior care because I've talked about that before and my wife owns a senior care business, which is basically in the home health field but it does not involve nursing care. It's simply for seniors in home caregivers.
But you can look at these different things and find that there's at least five major categories that are very popular now, the categories themselves are growing. And if you think about it, and I learned this from Mike Woo-Ming, the most successful businesses generally fall into one of three categories. First is that they involve working in some kind of relationship related business. Number two would be health and fitness related business. And number three would be something that has to do with learning about money or investing your money.
These are the three big ones, for example, for courses, for podcasts, for online businesses, for coaching. Relationships, health and fitness, and weight loss you could throw in there. And then the other one would be money. Making more money, avoid losing money, things like that.
Some of the franchises that I saw that fell into each of these categories were pretty interesting. Let's see, I've got a list here. In the fitness realm, there are just dozens and dozens of very successful franchises that have been out there for a long time. I'll just list off some names here off the list I created earlier. There's an F45 Training. There's Anytime Fitness, there's the Exercise Coach, Club Pilates and D1 Training.
Another one would be all the home healthcare type businesses. That includes things like Home Instead, Homewatch CareGivers, Amada Senior Care, Visiting Angels. That's the one that seems to be doing a lot of national TV advertising. My wife runs Home Helpers and there are dozens of other ones. These are all franchises.
Now, there are franchises in urgent care. And the thing about urgent care is it suffers from the same issues that can be found in working in a small practice. You can get busy, you can get burnt out. But I think if you could come up with an urgent care where you limit the risks and you do a cash basis only, and you just say, "Look, we're not going to be billing Medicare and Public Aid and even the insurance companies, because I've got to add two staff to do the billing. You get into arguments, you get huge accounts receivable that can go on for years and years, and sometimes don't get paid at all."
And so, if you could do an urgent care type of business where walk-ins come in, they pay cash, you provide whatever services you feel are comfortable. And maybe you don't call it urgent care. Maybe you call it quick care, maybe you call it something like the Walgreens and CVS used to have. I don't know if they're still doing. MedExpress is an urgent care that is franchised.
And so, if you want to get into that and the really Colorado small niche, they'll show you how to do it and it tends to have a lot less headaches, particularly if you can avoid billing those insurance companies.
There's a lot of controversy about whether you should jump on the Med Spa bandwagon. In a really extensive or complex med spa you're doing a lot of procedures, you've bought a lot of equipment. At least two people on my podcasts have started their own med spas without a franchise. I might put that off of the franchise list, but you could buy an existing med spa. In fact, there's a lot of sales these days of med spas selling to other individuals or to private equity firms, something like that.
Weight loss has been around forever. There are franchises for weight loss clinics. Some of them have their own proprietary high protein solutions. Some use regular diets, but there's something called Physicians Weight Loss Centers, obviously designed for physicians. Medi-Weightloss, InShapeMD, which is a newer one. I'm not vouching for any of these, by the way, but there are plenty to choose from, and you should go through and look and see if any of those are attractive to you.
The other one is sort of related, it's the beauty industry. You might call it the skincare aesthetics industry. These kind of overlap. Palm Beach Tan is a franchise. So, it's basically a tanning salon, but they do other things related to the skin. You've got Body Bright, Heyday Skincare, The Lash Lounge, which deals mostly with eyelashes. There's always beauty/skincare, sort of related to med spa, where the med spas usually have some of the more invasive procedures, like even liposuction and things like that.
These are just some ideas and if you ever were in private practice and did enjoy the business side of it, then I think starting a business, starting a franchise, buying a business, buying a franchise, or somehow converting your practice if you are in private practice, either to concierge medicine or direct patient care, something where you can get rid of the billing part of it, you can get paid basically for your services in almost real time with maybe doing some billing and you might have an accounts receivable that would extend to 15 or 30 days. That's a lot better than fighting with Blue Cross Blue Shield over some bill from a year and a half ago that they clawed back their payment for, which is what they commonly do to hospitals.
When that happens, of course, the bottom line is the hospital is going to ultimately have to pay the physicians less or they'll go out of business. That's what usually happens, and that's why you're seeing 30 patients a day, five days a week, and doing medical records at night and on weekends. So, that's what you want to get away from.
All right, that is everything I have to say today.
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