Steps to Prepare Your Home Health Business For Sale
1) What is your Business Worth?- The first step in deciding whether or not to sell your business is to get a clear understanding of what your company is worth. It may make sense to engage the services of a homecare industry expert to garner an honest assessment of company's worth. This should be done well in advance of selling, and repeated periodically over the years, to give you an idea of what companies similar to yours are selling for. Not knowing what your company is worth may result in you either getting less than the business is worth or not selling your business because your expectations are unrealistically high.
2) Identify an Intermediary/Broker - There are many intermediaries that you can use to sell your business. Oftentimes, entrepreneurs first ask outside accountants or lawyers to help them. Some try and do it themselves, while some engage investment banks or experienced intermediaries. Most brokers and intermediaries work on some sort of incentive based scheme and consequently may try and get the contract by giving the potential seller a very high valuation for their business. It does not do you any good to hire a business broker who gives you a good valuation for your business and is ultimately unable to sell it. A good broker will give you an honest assessment of what your business is worth and start finding potential buyers for your business soon after they have started marketing your company. Find an intermediary that knows your business and has experience in healthcare mergers and acquisitions. This is the sole business of Fleetridge Pacific and we know the market of potential buyers and sellers.
3) Determining your Exit Strategy- Determining your exit strategy will help you and your broker identify what types of buyers will be interested in your company. What are you hoping to achieve when you sell your company? Do you want to continue to work with the buyer after the transaction is closed or are you looking to retire shortly after the sale closes? This will also help you, the broker and your other advisors, structure the deal as well as the transition to the buyer once the sale closes.
4) Enhancing Your Company's Value- If after a financial assessment you are not satisfied with the valuation of your company or looking for ways to enhance value, identify how to enhance the value of your company through marketing programs, increasing operational efficiencies and exhibiting good fiscal & regulatory controls. You and your broker can identify specific actions on how to enhance current and future values for your company.
5) Understanding the Acquisition Process- Buying and selling businesses take tremendous amounts of work and can be quite stressful. Sellers should know before they start what the process involves and approximate timelines in which to get a deal done. They should also understand the roles of intermediaries and other consultants, such as accountants and lawyers, as they are an integral part of the acquisition/divestiture process. Not understanding the process can cause problems and frustration and ultimately lead to a very long or unsuccessful effort to sell your business.