If you’re planning on selling your healthcare business, you may be wondering who to sell it to and how you will accomplish this feat. It can be a daunting undertaking. However, we’ve simplified the process.
This post examines five top ways to sell a healthcare business. You’ll want to read to the end for our bonus considerations!
1. Hire a Business Broker
When buying or selling businesses, having a professional with the necessary savoir-faire to execute such a transaction is prudent. Business brokers are experts who specialize in assisting business owners and investors to sell or buy companies.
As a seller, brokers have the expertise and experience to help you find potential buyers, negotiate terms of the sale, and handle all the various paperwork that’s involved. While they manage the backend activities you can focus on the front end of the business, making sure that it looks good and will attract quality buyers.
2. Sell to a Strategic Buyer
Selling your healthcare business to a strategic buyer can be a smart move. Strategic buyers can be large co-operations or your competition. Essentially any company that has an interest in expanding or diversifying its own operations can be a good fit.
If your business merges well with the investment goals of a larger company, potential strategic buyers may be interested in purchasing it. A shrewd business broker will be able to facilitate negotiations if a strategic buyer is identified.
3. Sell to a Financial Buyer
Since the coronavirus pandemic, private equity firms have made major headway with healthcare acquisitions.
In 2021, these investment giants invested $206 billion in purchasing more than 1,400 healthcare businesses.
Financial buyers can be angel investors or private equity firms. They are called financial buyers because they acquire businesses as a financial investment.
Healthcare businesses that have a proven financial track record and can show promising growth potential are in high demand. Such entities also typically sell faster than companies that fail to show a strong financial track record and future profitability.
4. Sell to your Employees
One of the major concerns for sellers is the welfare of their employees. If you have established a good relationship with your employees and are averse to turning over the company to an investor keen to break up the company and sell off different assets, then you might want to consider selling off the company to your staff.
However, this can only work if the employees have the necessary skillset and resources to continue running the business. If they do, then the most common path to follow is to establish an employee stock ownership plan (ESOP).
5. Sell Through an Auction
As a business owner who procured goods as part of operations, you’re probably familiar with reverse auctions. You may be aware of the fact that such auctions are one of the leading ways to get the best price for any goods you want from vendors.
Well, the same auction model can be employed when it comes time to sell a healthcare business.
An auction allows all interested buyers to place a bid on the business. It works best if you have multiple buyers and you want to get the best possible price for your company.
When it comes to marketing your business, there are plenty of alternative channels you can follow.
Another way to get the word out is by floating an ad in healthcare industry publications.
Lastly, if you’re not already in touch with your local Chamber of Commerce you may wish to reach out. They can give you contacts and connections that may prove useful.
The Bottom Line
Whichever path you choose to follow to sell your healthcare business, two things are worth noting: the necessity of a business broker and a qualified M&A attorney. Good counsel is invaluable when selling a business. Don’t leave money on the table. Ensure your sale has been structured in a manner that’s advantageous to you.
Consulting with both prior to initiating the sale of your business can save you time and money. If you’re ready to sell or would like to discuss your options with a seasoned business broker, contact our Sun Acquisitions team today.
Looking for more insight on selling a business? Check out these links:
- Mitigating Post-Closing Risks Through The Rep and Warranty Insurance
- How to Navigate a Buyer or Seller’s Initial Meeting
- Are You Financially Ready to Sell?
- Buyer Motivation – How to Confirm?
- Sell NOW – The Crystal Ball is Pretty Clear
Disclaimer: Any information provided in this blog is not intended to replace legal, financial, or taxation advice given by qualified professionals.