Ep 527 How to Avoid an Earn-Out (Even in a Service Business)

Ep 527 How to Avoid an Earn-Out (Even in a Service Business)

Author: John Warrillow January 2, 2026 Duration: 1:34:18

Most business owners hit a fork in the road. 

Stay "on the tools" and keep making great money. Or start feathering back your personal involvement so the business can grow beyond you. 

In this episode of Built to Sell Radio, Dr. Michael Filosi walks through how he made that shift in a dental practice, without jeopardizing cash flow. He didn't rip the band-aid off. He reduced his patient days one day at a time while the practice added clinicians and transitioned patients carefully. Over a few years, his billings went from roughly 43% of revenue to single digits, and he only went to zero once the business was already producing most of his take-home income. 

In this episode, you discover how to 

  • Spot the "capped upside" moment when your time becomes the constraint
  • Feather back from four days on the tools to three, then two, then zero
  • Time each reduction using numbers, not hope
  • Transition customers off the owner without breaking trust
  • Remove key-person risk by ensuring no one producer dominates revenue
  • Keep cash flow steady while you trade personal production for enterprise value 

The result: Filosi sold his practice and collected 100% of his cash at closing, which is almost unheard of in dentistry. 


For any entrepreneur, the idea of selling the company they've built is both a daunting prospect and a potential pinnacle of success. Built to Sell Radio, hosted by John Warrillow, steps into that complex space with a clear, practical focus. This isn't about abstract theory; it's a weekly conversation grounded in real experience. Every episode features a different founder who has recently navigated the sale of their business. The discussion goes straight to the heart of the matter: understanding the personal and strategic reasons behind the decision to sell. Listeners get an honest breakdown of what worked, from preparation and valuation to negotiation, and perhaps more importantly, the unforeseen pitfalls and mistakes made along the way. It’s that candid post-mortem, the lessons learned in the trenches of a transaction, that provides unparalleled value. By compiling these firsthand accounts, the podcast builds a comprehensive library of exit strategies and cautionary tales. Tuning in feels like gaining access to a private mastermind, where seasoned entrepreneurs share the unvarnished truth about cashing in their life's work. If you're contemplating your own eventual exit, this series offers the nuanced, peer-to-peer insights you need to think like a buyer, protect your interests, and ultimately, build a business that is truly desirable. Built to Sell Radio serves as an essential guide, transforming the opaque process of selling a business into a clearer, more manageable journey.
Author: Language: English Episodes: 100

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