Non-medical in-home care businesses carry substantial sales premiums given that they produce highly recurring streams of revenue from their operations. Even smaller scale firms can achieve price to earnings multiples of three times the prior year earnings. This is principally due to the fact that these businesses are highly economically stable and scalable.
In regards to selling these businesses to a third-party, there are numerous ways to do this. First, many people will hire a business broker that will effectively market the business to a potential buyer. One of the positives of working with a business broker is that they usually have a number of contacts on hand among entities that are always in search of businesses like non-medical in-home care agencies and services. Business brokers will often conduct a valuation in order to determine in the free market value of the business. However, working with a business broker can be expensive given that they usually take a 10% commission. If you have grown a very successful in-home care enterprise, and it is now worth $1 million then you can expect a fee of around $100,000 for selling the business in tandem with a business broker.
Alternatively, many people will mark the business on their own. Larger scale companies that operating this capacity will often have a portion of their website dedicated to discussing potential acquisitions. You can conduct direct outreach with larger firms who may express substantial interested in acquiring your existing operations. It should be noted that it is extremely important to work with a qualified attorney throughout the entire process. First, they will ensure that sale of the business is done appropriately from a legal standpoint. Second, lawyers are great negotiators, and they will be able to work very closely with you as you negotiate the final terms of the sale if you were non-medical in a home care business.
You can also market your business for sale among numerous platforms that operate in a similar capacity to that of a real estate listing platform. these businesses include:
There’s usually a small monthly fee associated with enrolling on these platforms for generating leads among entrepreneurs that may be interested in acquiring your business. For this type of company, you can also work directly with individuals who are currently employees who may be interested in doing a phased buyout of the business. Although this takes a longer period of time, it does provide the entrepreneur with a substantial amount of control as the businesses transitioned to the ownership of an employee. You can expect that a transition period would occur over a three year to five-year buyout. This is primarily due to the fact that the employee will be using a substantial portion of the company’s after tax profit to pay you the premium associated with the business.
Similar to working with any other entity that may be interested in buying your company, you should have proper legal counsel in place to ensure that you were able to effectively establish an agreement that would cover a multiyear buyout program. One of the most important things prior to undertaking the sale of the business is to understand its value. This is somewhat of a difficult practice given that many people are not overly familiar with discounted cash flow, comparative business sales, net present value, and price to earnings multiples. There are numerous platforms that can assist you with this process.
On this page is a downloadable spreadsheet that you can use that can assist you in determining the value of your business on a very surface basis. Prior to the sale of the business by any third-party, you can retain the services of a business valuation expert that will be able to provide multiple forms of information regarding with the free market value of your non-medical in-home care agency can achieve.