Once you have developed a plan for attracting clients, invest in yourself and the relationships you need to start your own business.
Ross Landreth was forced out of the corporate nest in March of 2011. His division was terminated, but the head partner of the firm he was working for handed him his client folders and said good luck. Over the years Ross had been helping entrepreneurs get their start yet had never left the safety and comfort of the corporate life. He attributes his success to being fired. He says that, “it changes the way you feel about yourself, you have to search for your value”.
The shocking exit from the corporate world brought on the birth of Medical Valuations Inc., a full-service business appraisal firm specializing in the medical field. The majority of Ross’s contacts are in the dental world, but that doesn’t stop him from accepting assignments for various small businesses. “As an entrepreneur, I feel that I can better connect with other small business owners”.
The business appraisal world has consolidated so the alphabet soup of appraiser is now a bit easier to understand. Ross has an accredited senior appraiser (ASA) designation from the American Society of Appraisers. This designation allows him to work on appraisal assignments that certain organizations like the Small Business Administration and the IRS require qualified appraisers. It also ensures that he will qualify as an approved expert witness if a business break-up or divorce forces a court appearance.
Where did the idea for Medical Valuations come from?
Although the idea was a bit forced on me, I had had many clients ask why I work for “the man” when it was clear that I was the work horse. I took a great deal of inspiration from past clients. From there the keys to getting the business open were to invest in myself, through training and continuing education. I then need to spend some time developing the business models and tools needed to launch on my own.
What does your typical day look like and how do you make it productive?
When I first launched I spent a great deal of time coming up with a better valuation mousetrap. Building my models efficiently was my focus, which has allowed me to spend time on more important things. The early years required building up my referral base so that I could keep the business going without thinking about tucking in my tail and going back to work for someone else.
Fast forward to a couple of years and I had arrived at a place where I had enough work to meet my family’s life style demands. This allowed me a tremendous amount financial freedom and major stress relief. I then took the focus off growth and business and applied much of my time to my growing family.
As a business owner you get to choose where your time and energy go. I have chosen to take the stress-free route and allocate more time to my family than could have been possible working in the corporate world. Perhaps when my children are older, I’ll be able to share some tips on being a productive entrepreneur.
How do you bring ideas to life?
Well, this is kind of a funny story. One of my latest ideas came from a nightmare. In my dream I was being cross examined at a trial about how I use the Discounted Cash Flow method in nearly all my appraisals. I know this is getting nerdy but stay with me. There is a shorter & easier method to value a business and I needed to go to the black board to explain the math behind how they are the same if the growth rate of the business is constant.
Even in my dream I was helpless without a calculator. I knew that I was right, but I couldn’t prove it to the jury. I woke up and went straight to my computer and built a model to prove the math. In short, my fears drive me to build the tools that I need to properly do my job.
What’s one trend that excites you?
I’m not sure it is exactly a trend, but I feel like the recent tax cuts will give birth to many small businesses. Some of the rules are really clunky, and there is one that attempts to prevent small business owners who use pass through corporations (S corps, LLCs) to get the 20% corporate tax rate rather than their normal tax rate. The way that the rules are written it makes owning a passive business more lucrative than a professional service business.
If passive businesses can get taxed at 20%, I believe that you will see many business owners sell their businesses to their relatives, who can passively be owners. The result would be lower tax revenue for the government and more money in the pocket of these small owners. Of course, to structure something fun like that, a business owner would need a good accountant, lawyer, and an appraiser like me!
What is one habit of yours that makes you more productive as an entrepreneur?
I mentioned earlier that I build everything with efficiency in mind, but that’s not the key to my success. I DON’T procrastinate. When I have work on my desk, it gives me a bit of stress that I don’t like in my life. So, when I take on a client, I get all the busy work out of the way so that I can get to work on the appraisal the second I wake up in the morning. I find that my mind is fresh and that I can give 100% of my attention to the project in the early morning.
What advice would you give your younger self?
Once you have developed a plan for attracting clients, invest in yourself and the relationships you need to start your own business. After about a year of being self employed I knew that I would never go to work for another company again. It is a liberating feeling knowing that you are 100% in charge of your own destiny.
Tell us something that’s true that almost nobody agrees with you on.
I tried to buy a condo towards the end of the housing bubble. I couldn’t believe that people would pay more than listing prices the second that they came on the market. I said, “how do they know that I won’t come around and offer more?” My realtor said that it doesn’t matter since the properties won’t appraise for that anyway, so you need a ton of extra cash to pay more than the bank would loan you. I knew right away that something was wrong. I tried to talk all my friends into selling their rental properties. The only person who believed me was my mother, and I’m glad to say I kept her from going bankrupt like many of my friends.
Now I realize that it has been over 10 years since this happened, but it was the one time in my life where I knew I was 100% right and that everybody “knew” that I was crazy. I actually earned the nickname “captain negative” for my opinions on the subject.
As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?
Don’t procrastinate, cross as many things off your list as possible.
What is one strategy that has helped you grow your business?
My business is heavily focused on referrals. My secret is that I do a good job, in a timely matter, at a reasonable cost. That’s it, people refer business to me, because they know that I won’t make them look bad.
What is one failure you had as an entrepreneur and how did you overcome it?
As embarrassing as this is to admit, I only earned $5,000 my first summer. I had that oh sh## moment and had to contemplate going back to the corporate world. However, I believed in myself and knew that I would get my business headed in the right direction. My advice is that when you are down remember what it feels like, so that when times are good you will make sure to have a rainy day fund to pull you through the tough times.
What is one business idea that you’re willing to give away to our readers?
If you currently have a professional services business, you may want to speak with your accountant about splitting it up and selling pieces of it to your family members to lower your overall tax burden. Hopefully, the IRS doesn’t read this, but they are the ones that come up with their silly tax rules.
What is the best $100 you recently spent? What and why?
I recently purchased a 64 gb sandisk memory card. Shooting valuation tutorials takes up a ton of space, so I needed more memory. I’m a little upset that I didn’t go for the 128 gb one, but I figure it will be cheaper next year.
What is one piece of software or a web service that helps you be productive? How do you use it?
Once I learned how to do a mail merge to get my information from Excel to Word, I increased my productivity by about double. If you use excel and generate any kinds of reports, I encourage you to study up on the mail merge function.
What is the one book that you recommend our community should read and why?
I’m a bit of a sci-fi guy, so I like the safehold series by David Webber. The first book is off armegeddon’s reef. Without spoiling it, the book is about rebuilding society from close to the ground up (they keep their modern medicine and hygiene tactics to prolong life).
It forces you to imagine building things without the tools that we currently have. Every page that I turn I ask what I would do for a living if it were X century. I always concluded that I would need to be an inventor, but I wouldn’t have the tools to build anything. By the end of the series I was pretty convinced I would need to be a farmer as none of my current skill set would really be suitable for a feudalistic society.
What is your favorite quote?
Ralph Waldo Emerson, “whoso would be a man must be a nonconformist” I have always interpreted that as saying that you must question the norm of society, but if you try really hard to be a nonconformist you and other like minded people really just become conformists to a new norm. It is circular logic, but it led me to not be a yes sir when I was in the corporate world. In turn, that led to success as an entrepreneur.
• When you work for yourself you get to choose how hard you want to work
• Don’t procrastinate
• Invest in yourself, find ways to be more productive
• Keep your business lean, don’t try to be flashy
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