Before you venture into selling your senior care operation, beware. Recognize what works and what wastes your time. Choose wisely. Here are 6 myths to watch out for. Beware.
Myth #1: I can sell it myself.
Good luck with that! You are already stretched thin. Where are you going to find the time? Adding another layer of work is not a good idea.
Myth #2: I know what my operation is worth.
Your operation's value is driven by market prices and forces. Can you objectively determine your operation's value compared to other operations currently on the market? Industry valuation rates and metrics change frequently. Are you using the latest data and valuation methods?
Myth #3: I can sell my operation when I'm ready.
There are 3 things that need to happen for an operation to be ready for sale. One is personal readiness. You can manage that. Second is operation readiness. Will your operation transfer smoothly to the next owner? Are employees ready and able to manage that change. And third is market readiness. Is your senior care sector in demand in your local area? The International Business Brokers Association recently reported that 80% of buyers are within 50 miles of your operation's location. Are macroeconomic indicators positive (e.g., robust economic activity, favorable interest rates, attractive demographics)?
Myth #4: Selling my operation is like selling a house.
No; it is not. The residential housing market is fairly homogenous. Prices are mainly driven by square footage, location, and comparable sales. Senior care operations vary greatly. The service offerings range from a simple menu of services to customized care packages. The target client base ranges from all government assistance clients (e.g., Medicaid, VA) to all private pay (e.g., private insurance, out-of-pocket). These metrics drive valuations. No operation is alike.
Myth #5: Once I find a buyer, I can sit back and relax.
Wrong. Once you find a buyer, the hard work begins. You must keep your operation running full throttle. Acquisition agreements usually include a provision that allows buyers to back out of the deal if the operation begins to perform badly. You must do better than you've done in the past to convince the buyer that your operation is still a good deal.
Myth #6: I don't need to find a buyer; my kids will take over the operation.
Many owner-operators believe this. However, many children are leaving the family business to seek other opportunities. Many children are taking IT-related jobs and internet-based roles. The broad acceptance of remote working has drawn many young people to seek non-traditional jobs. Few are staying and managing the family business.
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