Changing Course and Cashing Out
Selling your operation is not like selling your house. How the market values your business is complex and depends on many factors such as discretionary earnings, sales activity, quality of the revenue from your patient population or census, competition and barriers to entry, growth potential, timing, government regulations, and other factors. Read why engaging a healthcare intermediary is a smart move.
THE SELLING PROCESS
Selling your operation is a complex and lengthy process. It can take up to a year to find the right buyer, negotiate the selling terms, perform due diligence, and close the transaction. The major phases in the selling process are
Prequalifying the Seller and signing an exclusive right to sell agreement with Crimson Cardinal Healthcare Intermediary
Preparing the operation for sale and promotion
Screening and pre-qualifying buyers
Buyer's due diligence
Executing an Asset Purchase Agreement (in most cases) with contingencies
Clearing contingencies and preparing for closing
Closing the transaction
Post transaction administration and obligations
Unlike the sale of a home, seller are unable to successfully sell their businesses on their own for many reasons. First, keeping the transaction confidential is key. Rumors that the operation is for sale may scare your patients, suppliers, landlord, banker, and staff. Next, it is hard for the owner to objectively determine the market value of the operation. Many "for sale by owner" sellers list their operations "on the market" but not "in the market." Operations priced at"in the market" sell for what the current market offers. Operations "on the market" sit and don't move. When a facility, agency, or practice sits on the market for a long time, buyers begin to believe something is wrong with it. Third, owners do not have the expertise or the time commitment to take an operation for sale to market. It takes experience, dedication, and a team of professionals. Finally, when healthcare providers try to sell their operations on their own, they stop doing what made them successful - managing and taking care of their patients or census. Owners are better served keeping their operations on target and growing rather than getting distracting trying to sell it.