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What’s scaring practice owners this Halloween season?


As you look ahead to Halloween, November, and beyond, here are some key financial compass points to follow as you shore up your own business.

 pumpkin stethoscope © splitov27 - stock.adobe.com

pumpkin stethoscope © splitov27 - stock.adobe.com

2023 has been a turbulent year by any stretch of the imagination. As the leaves change and the nights draw in, the festive season of Halloween approaches. Business owners of physician-owned practices have much to worry about, including an economy that — according to the Federal Reserve — is continuing to deal with the aftereffects of the COVID-19 pandemic.

Shortages in key areas of strategic importance, including labor for intensive industries like healthcare, as well as continued inflationary pressures on consumers, have all driven many businesses to prepare for the worst.

As you look ahead to Halloween, November, and beyond, here are some key compass points to follow as you shore up your own business.

Conserve Liquidity and Maintain Adequate Cash

Many business owners have opted to cut operating expenses to bulk up their cash and cash equivalents balance. With short-term investments like U.S. treasuries and money market funds yielding in the mid-to-high single digits in the latter half of 2023, this seems like a smart move.

It is recommended that business owners maintain or build additional cash reserves beyond what is typically needed to fund their business’ working capital needs as the economy continues to move through the current credit cycle.

Mitigate Employee Turnover During Difficult Times

A report from the Work Institute stated that voluntary employee turnover cost U.S. companies over $630 billion in 2019. While most of the damage has been done and hiring has slowed substantially in 2023, there has been a permanent shift in employee loyalty norms from the times prior to the pandemic.

Even as your business emphasizes cost savings on the opex line, continue to foster an inclusive, positive company culture. Offer competitive compensation packages and continuous learning opportunities, and prioritize employee well-being above all else — and insofar as it’s possible, give your team opportunities for upward mobility in titles and compensation.

Businesses that hold on to their valuable human capital through the end of 2023 can be well-positioned for success as the economy rebounds through the next cycle.

Weighing the Exit Decision

According to a UBS report from earlier in 2023, 40% of U.S. business owners “regret not selling their business in the previous two years, which saw increased M&A activity and valuations, and 61% fear they will receive a lower business valuation in today’s market.”

The exact timing of a critical decision like the one to sell involves careful consideration of many factors, including the current projected future cash flows and whether a suitable buyer can be found, given the current interest rate environment.

An advisor can help you answer this important question.

Look to the Professionals for Strategic Guidance

In murky economic times this Halloween season, working with a strategic advisor can provide enormous benefits, including:

Experience and Knowledge: Financial advisors often have deep knowledge about financial markets, capital structures, valuation methods, and strategic financial decisions.

Raising Capital: If a small business is looking to raise capital, either through equity (selling shares) or debt (borrowing), an investment bank can help structure the deal, identify potential investors or lenders, and negotiate the best terms.

Mergers and Acquisitions: Should an owner decide to sell the business, merge with another company, or acquire a competitor, an advisor can offer guidance. They can help with business valuation, identifying potential buyers or targets, and facilitating the transaction.

No matter what your plans might be this Halloween, enlisting the help of a seasoned professional who has navigated many types of economic environments is a prudent decision.

Russell Weber is a Financial Advisor with UBS Financial Services Inc. a subsidiary of UBS Group AG. Member FINRA/SIPC in 307 International Circle, 4th Floor, Hunt Valley, MD 21030. The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of UBS Financial Services Inc. If you would like to learn more about what businesses should be on the lookout for this fall, Russell can be reached at russell.j.weber@ubs.com.

This article has been written and provided by UBS Financial Services Inc. for use by its Financial Advisors.

UBS does not provide legal or tax advice and this article does not constitute such advice. UBS strongly recommends that persons obtain appropriate independent legal, tax, and other professional advice.

Important information about UBS brokerage and advisory services. As a firm providing wealth management services to clients, UBS Financial Services Inc. offers investment advisory services in its capacity as an SEC-registered investment adviser and brokerage services in its capacity as an SEC-registered broker-dealer. Investment advisory services and brokerage services are separate and distinct, differ in material ways and are governed by different laws and separate arrangements. It is important that you understand the ways in which we conduct business and that you carefully read the agreements and disclosures that we provide about the products or services we offer. For more information, please review client relationship summary provided at ubs.com/relationshipsummary.

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Review Code: IS2306210

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