If you are considering entering the health care industry as an owner, you are not alone. According to MB Financial Bank, there has been high activity in the merger and acquisition of health care businesses. Participation can lead not only to increased income for you but also to improvements in the industry, even at a small scale.
However, before you jump in feet first, you need to know what questions to ask as you decide on the facility you want to purchase. With the help of a legal and financial team, you can find the right match for you.
- Are there any past or current lawsuits? Avoid buying a business that is involved in any litigation or payment of damages. Ask for or research details on any cases so you can get a clearer picture of the problem.
- What are the company policies and procedures? Although a facility must meet industry standards and follow all laws, each one is unique. Find out how complete and helpful the company policies are and if employees follow them.
- How will the current owner assist in the transition? You want to purchase a health care business from someone who still cares about its success. Discuss plans for making a gradual, smooth transition. Determine what practices should remain and which you can change for the better.
- How organized are the documents? Look for a facility with organized documentation on finances, contracts and client records.
- Do you have all necessary licenses and permits? The business must be current on its licenses and permits and follow health codes. Watch out for a facility that has licensing gaps or that cuts corners.
- What has contributed to success? Discover if there are specific attitudes, skills, qualities and tools that have made the health care facility successful so you can continue them.
- Are there any problematic clients? Because you are new, certain clients may try to take advantage of this. Ask if there are people you should watch out for and why.
While health care businesses can range from nursing homes to medical equipment providers, the questions you should ask before buying one of them remain the same.