Healthcare businesses such as a hospice, clinical laboratory, or medical practice are crucial services to society and selling your healthcare business is a heavy decision to make. However, if you have to do it, there are some considerations to take to make sure everything goes smoothly for you. Find out more about what mistakes you should avoid when selling your home health care business in the Stoneridge Partners website.

Know Your Business’ Worth

Understandably, selling your business requires a general idea of how much your business is worth. However, there are different ways to appraise the value of a company.Book valueis a way of appraisal that basically adds up the assets and subtracts the liabilities. Another way to determine the worth of your business is assess how much the stocks are in the public market.

Keep Your Financial Statements

Keeping your financial statements is a crucial part of selling your business. These statements may be periodical or even just monthly statements that you can show to potential buyers. These financial statements can then be utilized by a buyer to decide whether or not they would be willing to buy your business. 

These statements should be of both income and expenses, and it would be very helpful for buyers if the statements are clear and concise. These statements should also include taxes and other fees that will let buyers know that your business is not in any sort of trouble. 

Consider Your Contacts and Suppliers

Healthcare businesses typically have contacts and suppliers that provide them the necessary medical supplies and equipment. When getting these contacts in the first place, always consider the transferability of those contacts. If the contacts are indeed transferable, then consider their value in the sale because they will keep the business operational and save the buyer time and resources searching for new contacts and suppliers. 

Aside from contacts and third-party suppliers, also consider the value your healthcare business has in terms of its customers. Healthcare businesses, like most businesses, would have ledger of their customers and clients. These are especially valuable and should be a factor. 

Employee Retention

The sale or acquisition of businesses always make employees feel vulnerable about their positions in the company. When selling your healthcare business, consider what the buyer will do with your current staff. For healthcare businesses, employees are often retained for smooth transitions – especially key employees with certain specializations. 

Cash Vs Non-Cash Deals

In your mind, selling your business will fetch you a certain value. However, purchases of these kinds can come in two forms: cash and non-cash deals. Intuitively, cash would be the most liquid yet least risky payment method. However, cash deals are rare because they require that the buyer has full confidence in the value of the business they are buying. 

On the other hand, non-cash deals include other forms of valuable assets that have some sort of monetary value. Non-cash assets would include a seller’s note, an earnout, escrow, stock or an equity hold.

Real Estate and Equipment Leases

Real estate is always a significant asset that should be considered in the sale of the business. Before selling your healthcare business, consider whether your real estate lease is transferable in the first place. For these matters, it is always best to consult a lawyer. However, the buyer can always just transfer the business somewhere else. 

Furthermore, healthcare businesses (especially clinical laboratories) have a number of expensive equipment. While some of these equipment are outright purchased, some may be under leases. Also assess whether these equipment leases are transferable for an accurate appraisal of your business.

Insurance

Different businesses will always have some type of insurance, even multiple ones. These can include general liability insurance, commercial property insurance, business income insurance, professional liability insurance, workers’ compensation insurance and so on. 

Because each of these insurances highly depend on the contracts made, it is best to consult your legal team, or even have a consultation with the insurance companies to have an idea how to proceed with regards to selling your business. Always work with local lawyers, workers compensation lawyers Pittsburgh for example if you’re in the Steel City etc…

Clean Your Accounts

Cleaning your accounts is a smart and easy way to make your healthcare business more appealing for a buyer. This means settling open accounts and other loose ends that may appear undesirable to a potential buyer. This also means that you should already write off old balances that you haven’t gotten around to do. 

Furthermore, it is best to organize all your records into one clean location that would make it easy for the buyer to assess the company. All the records that need to be kept would include receipts, bank statements, invoices, payroll records, employment tax records, and such. If you can, it will also make it even easier if these records have digital copies that can be easily organized and looked through.  

Keep it Confidential

If you are still in the process of deciding whether or not to sell your company, and even if you are already entertaining buyers, it is best to keep the transactions confidential from the rest of the staff and clients. A public announcement can have a negative effect on the value of your business and it is recommended that an announcement should only be done when the sale is closed and sure. 

Furthermore, talks about selling the business will just put your employees in an uncomfortable and uneasy position. Especially ones that consider their positions as non-essential to the company, the quality of their work might degrade with the uncertainty whether they get to keep their jobs once a sale has been made. 

Conclusion

Selling a business is always a difficult time but knowing what to consider will not only make the entire process easier, but also help fetch you a better price for your healthcare business. Aside from the considerations and factors listed above, having an attorney that specializes in these transactions will also help make sure you get the most of this sale.