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Considerations in selling a health care business

If you own a home health care agency, hospice or other health care-related business, a time may come when you start to think about selling it. Maybe you have reached the stage of life where you are considering retirement, or maybe you have found that holding on to the practice has become more of a chore than a labor of love.

Regardless of your reasoning for doing so, there are several important considerations to make as you begin to navigate the sale process. As a health care business seller, it is important that you understand:

The value of your business

Often, a business owner’s perceived value of his or her business differs from the company’s actual market value. There are several reasons for this, with one being that emotions and sentimental value can sometimes lead some business owners to place a higher price tag on their business than prospective buyers are likely to pay. It is also worth noting that your patients may not stay with the practice once it takes on new ownership, which can also make valuation estimates difficult.

To give yourself an idea of the actual value of your health care business, you will need to examine referral sources, your payer mix and whether your business offers any auxiliary services. This last step is important because such services can have a considerable and positive impact on the value of your business.

Your target buyer

As a health care business seller, you should also devote careful consideration to who might buy your business. The type of buyer you seek should depend largely on the type of business you operate, so you will want to ask yourself questions such as whether you can market your business to potential buyers who are not physicians. Also, should you try and find a corporate buyer, or an existing hospital or health care system?

Determining the value of your business and the people or entities who might buy it are among the most important steps in the sales process. Making smart decisions about how much to ask, and of whom, can accelerate and streamline your business’s sale.

The lawyers at Rivas Goldstein have the right experience to guide you through a successful transaction and have the contacts to help you find a legitimate buyer for your company.