Healthcare Business Valuation - What You Need to Know – JR3 Consulting

Healthcare Business Valuation – What You Need to Know

Healthcare business evaluation

If you are the owner or co-owner of a business, the time will eventually come when you want to retire or move on to another opportunity. In most cases, that means selling your business. But figuring out the value of your business – as in what someone else would pay for it – is not as simple as choosing a sales price for your home, for instance.

At JR3 Consulting, we specialize in working with smaller, privately-held healthcare businesses, including:

  • Home Health
  • Assisted Living & Memory Care Facilities,
  • Hospice
  • Home Care
  • Independent Living Communities

We have the healthcare business valuation expertise you need. It’s important your valuation is able to stand up to healthcare regulatory scrutiny, including the Center for Medicare & Medicaid Services Change of Ownership (CHOW) regulations.

Thinking about selling your business? Learn what to do first by calling 760-270-1442 today!

Why You Need a Professional Healthcare Business Valuation

Determining what your healthcare business is worth can be pretty complicated. That’s because every business is unique. Unlike with home sales, you can’t just look at what comparable sales prices in your part of town were.

In healthcare business valuation, we use the income valuation approach. We estimate the value of your business based on the expected future income stream and the anticipated risks. The appraiser will consider a variety of factors including:

  • Type of business as well as financial and market history
  • The financial stability to generate an ongoing income stream
  • Earnings capability
  • Economic outlook for your industry (for example, Assisted Living)
  • How much competition you have
  • Home Care / Home Health productivity as it relates to projected revenues
  • Intangible values such as brand name recognition and goodwill
  • Capital needs

What a Healthcare Business Valuation Entails

Providing you with a detailed and accurate healthcare business valuation entails identifying assets, analyzing cash flow, and determining their worth to potential buyers. Here’s what JR3 Consulting will do for you:

  • Determine the value of tangible assets (including real estate, equipment, furniture, etc.)
  • Assess the value of intangible assets (brand name, patient loyalty, staff expertise, desirability of geographic location, etc.)
  • Examine the financial state of the business (revenue, the amount of debt, profit margins, cash flow, etc.)
  • Determine how potential buyers might value aspects of your business
  • Perform all of these assessments based on current market conditions
  • Provide an estimated expected selling price

Maximize Value Before a Sale

You may actually want to get a business valuation more than once. The first one can help establish a baseline value. This allows you to accelerate value by making better informed financial decisions, as well as creating better business and marketing strategies.

A good way to get your baseline value is by getting your Value Builder Score with our Value Builder System™ tool. You can access it through our Services page.

Let us help you understand all aspects of how to use Internal Qualitative Value Factors and External Qualitative Value Factors to drive the value of your business up. Focusing on your business value will position your business for a higher success rate of exit plans, higher transaction prices, reduce estimated value gaps, create new revenue streams, create deeper client relationships, increase client referrals, and create a long-term pipeline of visibility.

Through our methodology we create systems for you to follow and coach you through that process every step of the way to reach success levels you have only imagined.

Partner with the Professionals

For a complimentary 15-minute consultation and to learn more about maximizing the value of your business before you try to sell it, call us at 760-270-1442 or use our contact form and we’ll be in touch shortly.

We specialize in helping healthcare industry businesses like yours with succession planning, exit planning, business valuation, and the eventual sale.

Get Your Value Builder Score Today!

Join 60,000 business owners and get your score on the 8 Factors That Drive Your Company’s Value, a comprehensive analysis of your score and a detailed action plan for how to improve your score on each.
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