Job or Asset?

You can find the right business at a fair price and still lose the deal over the money. And the money is almost never a single loan. Host John Lay, founder of Three Circles Agency, walks the real menu of how regular people pay for a business.

Sources:

• Brown & Earle (2017), Journal of Finance — financing access causally drove ~3-3.5 jobs per $1M lent. 
• Robb & Robinson (2014), Review of Financial Studies — small firms run on external/bank debt; the personal guarantee is normal “levered equity.” 
• Spence (1973), QJE — a seller carrying paper is a credible, costly-to-fake signal (Nobel, 2001). 
• Thaler (1988), Journal of Economic Perspectives — the winner’s curse; over-borrowing is the financing version.
• SBA 7(a): max $5M, ~10-year acquisition term, rates tied to prime with SBA caps; SOP 50 10 8 (eff. June 1, 2025): ≥10% equity injection, ≥5% own cash, seller note counts toward injection only on full standby and ≤50% of the injection, personal guarantee for owners of 20%+. SBA requires a fixed, determinable purchase price, so earnouts generally are not used in SBA-financed deals. SBA 504 for owner-occupied real estate / fixed assets. Prime ~6.75% (mid-2026); 7(a) acquisition rates roughly 9.75-11.5%.
• DSCR benchmark ~1.25x for acquisitions. 
• Owner/seller financing appears in ~75-90% of completed deals under $5M (IBBA-type broker data; BizBuySell); ~62% of buyers want it vs. ~23% of sellers planning to offer it; many lenders now require ~10% seller note. 
• Seller note typically 10-30% of price, 5-7 years, high single digits. 
• Seller financing associated with ~10-15% higher price, faster closings, and installment-sale tax spreading (IRC §453). 
• Conventional acquisition loans typically require 20-30% down. 2025 SBA rule changes linked to ~30-day-longer closings (BizBuySell Q2 2025).
• All figures are subject to change.

Disclaimer. Job or Asset is produced by Three Circles Agency (TCA) and is provided for general informational and educational purposes only. It does not constitute, and should not be relied upon as, legal, tax, accounting, financial, investment, valuation, or medical advice, and it is not a solicitation or offer to buy or sell any business, security, or financial product. Listening to this podcast, contacting TCA, or downloading any TCA material does not create an attorney-client, accountant-client, fiduciary, broker, or advisory relationship of any kind. TCA is a business-consulting firm. It is not a law firm, accounting firm, registered investment adviser, broker-dealer, or licensed business broker, and it does not provide legal, tax, or investment advice. Always consult your own qualified, licensed professionals before making any decision regarding the purchase, sale, financing, structuring, taxation, or operation of a business or practice. Statistics, multiples, interest rates, and figures mentioned are believed accurate as of the recording date but are general in nature and subject to change; they may not apply to your situation. Academic research is cited to illustrate ideas and mechanisms; practitioner and industry figures are estimates that vary by business, market, and time. Any client examples are illustrative composites and do not depict real, identifiable clients. The views expressed are those of the host. TCA makes no warranty as to the a...

The most valuable work an owner can do before selling is also the hardest: getting the business off their own shoulders. 

Host John Lay, founder of Three Circles Agency, maps exactly where owners become the bottleneck, what it costs, and the step-by-step playbook to fix it.

Plus the part no one talks about: why being needed feels good and quietly destroys your largest asset, and how to let go.

Sources:

• Bennedsen, M., Perez-Gonzalez, F., & Wolfenzon, D. Do CEOs Matter? (Journal of Finance, 2020, 75(4), 1877-1911). Sudden CEO deaths and hospitalizations followed by measurable declines in profitability, sales growth, and asset growth. 
• Bloom, N. & Van Reenen, J. (2007). Quarterly Journal of Economics 122(4). Structured management practices strongly associated with productivity, profitability, value, and survival. 
• Bloom, N., Eifert, B., Mahajan, A., McKenzie, D., & Roberts, J. (2013). Quarterly Journal of Economics 128(1). Randomized India trial: installing structured management practices causally raised productivity. 
• Bloom, N., Sadun, R., & Van Reenen, J. (2012). Quarterly Journal of Economics 127(4). Trust accounts for roughly half the variation in how much firms decentralize decisions; delegation enables firm growth. 
• DeTienne, D. R., McKelvie, A., & Chandler, G. N. (2015). Journal of Business Venturing 30(2). Stewardship exit motive.
• Owner-dependence discount: severe cases valued approx. 20-50% below comparable, less-dependent businesses; roughly one full turn of EBITDA in each direction. 
• Recurring-revenue premium: owner-dependent, transactional businesses commonly trade approx. 2.5-3.5x; businesses with recurring revenue, diversified customers, and strong margins commonly trade approx. 5-7x and higher in some specialized service sectors. 
• IRS Revenue Ruling 59-60 recognizes the key-person effect.

Disclaimer. Job or Asset is produced by Three Circles Agency (TCA) and is provided for general informational and educational purposes only. It does not constitute, and should not be relied upon as, legal, tax, accounting, financial, investment, valuation, or medical advice, and it is not a solicitation or offer to buy or sell any business, security, or financial product. Listening to this podcast, contacting TCA, or downloading any TCA material does not create an attorney-client, accountant-client, fiduciary, broker, or advisory relationship of any kind. TCA is a business-consulting firm. It is not a law firm, accounting firm, registered investment adviser, broker-dealer, or licensed business broker, and it does not provide legal, tax, or investment advice. Always consult your own qualified, licensed professionals before making any decision regarding the purchase, sale, financing, structuring, taxation, or operation of a business or practice. Statistics, multiples, interest rates, and figures mentioned are believed accurate as of the recording date but are general in nature and subject to change; they may not apply to your situation. Academic research is cited to illustrate ideas and mechanisms; practitioner and industry figures are estimates that vary by business, market, and time. Any client examples are illustrative composites and do not depict real, identifiable clients. The views expressed are those of the host. TCA makes no warranty as to the a...

You became a physician to care for people, not to run a company. This episode is built for doctors, especially primary care physicians, who own a practice they were never trained to run. 

Host John Lay, founder of Three Circles Agency, explains in plain language what a practice is actually worth (and the salary-adjustment that decides the real number), why patient loyalty to you personally can make a practice hard to sell, and how these deals are legally structured. That includes the Corporate Practice of Medicine doctrine, the MSO model (and the 2025 state moves in Oregon and California to tighten it), and the two federal laws every physician should know by name: the Anti-Kickback Statute and the Stark Law. 

Then the three real choices: sell and move on, stay independent and strengthen, or partner through an MSO and keep practicing with the business weight lifted. 

General education, not legal advice; work with healthcare counsel on the specifics.

Sources:

• Singh, Y., Song, Z., et al. (2022). JAMA Health Forum 3(9). PE-acquired practices: charges per claim up approx. 20%, amounts collected up approx. 11% vs. controls. 
• DeTienne, D. R., McKelvie, A., & Chandler, G. N. (2015). Journal of Business Venturing 30(2). Stewardship exit motive. 
• Recent 2024-2025 primary-care consolidation studies, JAMA Health Forum and Health Affairs: office-visit prices 8-11% higher at hospital- and PE-affiliated practices; PE resale associated with higher physician turnover. 
• Anti-Kickback Statute, 42 U.S.C. §1320a-7b(b); 
• Stark Law, 42 U.S.C. §1395nn; 
• Texas Occupations Code / 22 TAC §177.17; 
• 2025 Oregon and California MSO restriction laws. 
• American Medical Association, Physician Practice Benchmark Survey (Kane, 2024): private practice 42.2% in 2024, down from 60.1% in 2012; physician ownership 35.4%, down from 53.2%; approx. 76% in early 1980s; PE-owned practices 6.5% in 2024.

Disclaimer. Job or Asset is produced by Three Circles Agency (TCA) and is provided for general informational and educational purposes only. It does not constitute, and should not be relied upon as, legal, tax, accounting, financial, investment, valuation, or medical advice, and it is not a solicitation or offer to buy or sell any business, security, or financial product. Listening to this podcast, contacting TCA, or downloading any TCA material does not create an attorney-client, accountant-client, fiduciary, broker, or advisory relationship of any kind. TCA is a business-consulting firm. It is not a law firm, accounting firm, registered investment adviser, broker-dealer, or licensed business broker, and it does not provide legal, tax, or investment advice. Always consult your own qualified, licensed professionals before making any decision regarding the purchase, sale, financing, structuring, taxation, or operation of a business or practice. Statistics, multiples, interest rates, and figures mentioned are believed accurate as of the recording date but are general in nature and subject to change; they may not apply to your situation. Academic research is cited to illustrate ideas and mechanisms; practitioner and industry figures are estimates that vary by business, market, and time. Any client examples are illustrative composites and do not depict real, identifiable clients. The views expressed are those of the host. TCA makes no warranty as to the a...

Profit is an opinion. Cash is a fact. 

And the difference lives on the balance sheet, the part of the books most owners never look at and every serious buyer examines for hours. 

Host John Lay, founder of Three Circles Agency, gives a plain-English tour of the  statements every buyer reads and, then, goes below the income statement into the  pages that quietly kill deals. He shows why a profitable business can be cash-starved and unsellable.

Sources:

• Sloan (1996), The Accounting Review, accruals less persistent than cash earnings. 
• Richardson, Sloan, Soliman, and Tuna (2005), Journal of Accounting and Economics, less-reliable accruals predict lower earnings persistence. 
• Deloof (2003), Journal of Business Finance and Accounting, faster collection and shorter cash conversion cycle associated with higher profitability; less profitable firms wait longest to pay. 
• Petersen and Rajan (1997), Review of Financial Studies, trade credit is the single largest source of short-term finance; firms lean on it more when bank credit is unavailable. 
• Baños-Caballero, Garcia-Teruel, and Martinez-Solano (2012), Small Business Economics, SMEs steer toward a target cash conversion cycle; working capital and firm value follow a non-linear curve with an optimal level. 
• Minnis (2011), Journal of Accounting Research, verified financials lower a private firm’s cost of debt.
• Cash conversion cycle = DIO plus DSO minus DPO. 
• Illustrative ranges vary by industry. 
• Net-working-capital peg and post-closing true-up (typically 30-90 days), with price adjusting dollar-for-dollar; disputes cluster around AR collectibility and AP classification.

Disclaimer. Job or Asset is produced by Three Circles Agency (TCA) and is provided for general informational and educational purposes only. It does not constitute, and should not be relied upon as, legal, tax, accounting, financial, investment, valuation, or medical advice, and it is not a solicitation or offer to buy or sell any business, security, or financial product. Listening to this podcast, contacting TCA, or downloading any TCA material does not create an attorney-client, accountant-client, fiduciary, broker, or advisory relationship of any kind. TCA is a business-consulting firm. It is not a law firm, accounting firm, registered investment adviser, broker-dealer, or licensed business broker, and it does not provide legal, tax, or investment advice. Always consult your own qualified, licensed professionals before making any decision regarding the purchase, sale, financing, structuring, taxation, or operation of a business or practice. Statistics, multiples, interest rates, and figures mentioned are believed accurate as of the recording date but are general in nature and subject to change; they may not apply to your situation. Academic research is cited to illustrate ideas and mechanisms; practitioner and industry figures are estimates that vary by business, market, and time. Any client examples are illustrative composites and do not depict real, identifiable clients. The views expressed are those of the host. TCA makes no warranty as to the a...

Most people think you get fleeced buying a business by overpaying, but the worse traps are paying asset money for a job, or paying for earnings that were never real. 

Host John Lay, founder of Three Circles Agency, turns the season’s risk pendulum to the buyer’s chair: your job is to read which way it truly hangs before you wire the money, and to use structure to push it back toward the seller when it’s leaning the wrong way. 

Sources:

Academic:

• Akerlof (1970), QJE, lemons and information asymmetry. 
• Sloan (1996), The Accounting Review, accruals less persistent than cash earnings. 
• Beneish (1999), Financial Analysts Journal, earnings-to-cash gap the top manipulation predictor. 
• Minnis (2011), Journal of Accounting Research, verified books lower cost of debt. 
• Bennedsen, Perez-Gonzalez, and Wolfenzon (2020), Journal of Finance, CEO hospitalization events; operator absence measurably drops profitability. 
• Patatoukas (2012), The Accounting Review, concentration looks efficient but concentrates risk. 
• Dhaliwal et al. (2016), Journal of Accounting and Economics, major-customer dependency raises bank-debt costs roughly 5-6%. 
• Campello and Gao (2017), Journal of Financial Economics, concentration tightens loan spreads, covenants, and maturities. 
• Bloom and Van Reenen (2007), QJE, structured management practices causally raise productivity and survival. 
• Luca (2011/2016), HBS working paper, one-star rating lifts revenue 5-9%; effect concentrated in independent businesses. 
• Thaler (1988), Journal of Economic Perspectives, winner’s curse. 
• Kohers and Ang (2000), The Journal of Business, earnouts hedge misvaluation and align seller incentives.

Practitioner: 

• BizBuySell (median sale price ~$350K; average cash-flow multiple under 3x). 
• IBBA and Pepperdine (Main Street ~2-3x SDE; lower middle market ~4-6x EBITDA). 
• Quality-of-earnings practitioner finding (~20% haircut common). 
• SBA SOP 50 10 8 effective June 1, 2025 (10% injection, 5% borrower cash, seller note full standby, seller note covers at most 50% of injection). 
• Stanford Search Fund Study 2024 (681 funds since 1984; ~35% aggregate IRR, ~4.5x ROI through 12/31/2023; skewed by top performers; median operating-company purchase ~$14.4M).

Disclaimer. Job or Asset is produced by Three Circles Agency (TCA) and is provided for general informational and educational purposes only. It does not constitute, and should not be relied upon as, legal, tax, accounting, financial, investment, valuation, or medical advice, and it is not a solicitation or offer to buy or sell any business, security, or financial product. Listening to this podcast, contacting TCA, or downloading any TCA material does not create an attorney-client, accountant-client, fiduciary, broker, or advisory relationship of any kind. TCA is a business-consulting firm. It is not a law firm, accounting firm, registered investment adviser, broker-dealer, or licensed business broker, and it does not provide legal, tax, or investment advice. Always consult your own qualified, licensed professionals before making any decision regarding the purchase, sale, financing, structuring, taxation, or operation of a business or practice. Statistics, multiples, interest rates, and figures mentioned are believed accurate as of the recording date but are general in nature and subject to change; they may not apply to your situation. Academic research is cited to illustrate ideas and mechanisms; practitioner and industry figures are estimates that vary by business, market, and time. Any client examples are illustrative composites and do not depict real, identifiable clients. The views expressed are those of the host. TCA makes no warranty as to the a...

Most owners think selling is about finding a buyer. The evidence says otherwise. 

Host John Lay, founder of Three Circles Agency, puts the deal room and the research side by side on one question: are you selling a job, or an asset? He introduces the show’s central image, the risk pendulum that swings toward buyer or seller in every deal.

Then, he walks the five lenses a buyer uses:

1. Finance, 
2. Operations, 
3. Marketing, 
4. Team, 
5. Customer experience

Plus, why only about three in ten marketed businesses sell, why roughly half of all exits are forced, and why most who sell regret it within a year.

Sources:

• Akerlof (1970), QJE, the “lemons”/uncertainty problem. 
• DeTienne (2010), Journal of Business Venturing, exit as a process. 
• Hytti et al. (2025), Int’l Journal of Management and Enterprise Development, 1,200+ Finnish SMEs (planning, not exit route, kept firms adaptive). 
• EPI National State of Owner Readiness (~70% of marketed businesses don’t sell; ~50% of exits forced by the 5 Ds; ~76% regret within a year; ~60% no personal post-exit plan). 
• Valuation practice (key-person/owner-dependence discount ~20–50%; customer-concentration discount ~0.5–1 turn of EBITDA; quality-of-earnings haircut ~20%). 
• Silver-tsunami demographics (~half of owners 55+; ~12M+ businesses may change hands over the next decade).

Disclaimer. Job or Asset is produced by Three Circles Agency (TCA) and is provided for general informational and educational purposes only. It does not constitute, and should not be relied upon as, legal, tax, accounting, financial, investment, valuation, or medical advice, and it is not a solicitation or offer to buy or sell any business, security, or financial product. Listening to this podcast, contacting TCA, or downloading any TCA material does not create an attorney-client, accountant-client, fiduciary, broker, or advisory relationship of any kind. TCA is a business-consulting firm. It is not a law firm, accounting firm, registered investment adviser, broker-dealer, or licensed business broker, and it does not provide legal, tax, or investment advice. Always consult your own qualified, licensed professionals before making any decision regarding the purchase, sale, financing, structuring, taxation, or operation of a business or practice. Statistics, multiples, interest rates, and figures mentioned are believed accurate as of the recording date but are general in nature and subject to change; they may not apply to your situation. Academic research is cited to illustrate ideas and mechanisms; practitioner and industry figures are estimates that vary by business, market, and time. Any client examples are illustrative composites and do not depict real, identifiable clients. The views expressed are those of the host. TCA makes no warranty as to the a...