Small assisted living facility owners can maximize the selling prices of their operations by focusing on value drivers. Value drivers are actions, policies, and practices owners take that the marketplace rewards. Here are 10 primary value drivers:
Upward Trending Revenue. Increasing gross receipts year after year implies solid future growth potential. Whether sales rise due to volume increase, price increase, or both, it indicates clients value the services that the operation performs.
Brand Equity and Loyal Client Base. Brand recognition and good reputation drives loyal clients and repeat business.
Strong Referral Network. This is a powerful marketing tool that attracts prospects that most likely become long-term clients.
Quality Services. High quality service makes happy clients which, in term, generate referrals and new prospects. It is a primary method of differentiating one's services and extracting extraordinary profits.
Payor Mix. Buyers favor operations that serve private pay patients.
Patient Mix. Patients that require more care (e.g., dementia patients) usually generate more fee income that other patients.
High Occupancy Rate. The market pays a premium for operations that can keep the beds full.
Below-market Rent. In situations where the operator has negotiated a good lease, these savings can get pass to the new owner.
Experienced, Quality Staff. The market rewards operations that retain experienced, quality staff professionals. This is also a primary way to differentiate your operation from the competition.
Above-average Profit Margins. Growing revenue and strong cost controls drive consistent, above-average profits. These operations usually sell quickly and at a premium.
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