How do you get full asking price when it takes longer than expected to sell?
Keep running the business with a long-term mindset. That’s the advice Senior Care Realty’s Bob Richards provides clients.
Many things, out of the seller’s control, can cause the sale of a business to take longer than expected. A potential buyer loses a key member of its regional staff. The state requires a plan of correction before transferring the license. Or, to secure financing, the buyer needs to find a management company with a certain level of experience.
In rare situations, all the above happens. And, that’s exactly the perfect storm Bob Richards recently helped a client navigate. The property was a two-campus, 90-bed community based residential facility with 5 buildings.
Each delay brought frustrations. Each delay increased the risk the deal might fall through. But, with Bob’s guidance, the client managed expectations and got the full asking price by:
- Avoiding short-term decisions that often lead to a decline in occupancy.
- Maintaining consistency, and
- Keeping facilities well maintained and in working order.
Maintaining a long-term mindset was critical. It’s tempting for sellers to scale back marketing or forgo routine maintenance. But, if there’s a significant decline in occupancy, maintaining interest becomes an issue. Prospective buyers might walk. Or, they may ask for a reduction in the selling price.
During the selling process, buyers don’t want to see new expenses appearing on the financials. New expenses raise questions. And prospective buyers wonder what other unknown expenses might suddenly surface.
When selling, it’s also important to make it easy for potential buyers to visualize a typical month. During this sale, Bob worked with the client to evaluate monthly financial statements and:
- Spot expense outliers,
- Create an adjusted income statement that removed personal and non-essential expenses,
- Communicate average run rates, and
- Clarify the expected return on investment.
Eliminating the noise minimized potential friction. The potential buyers saw the true value of the business. Bob maintained open lines of communication throughout the process. As a result, expectations were managed. Seller financing established favorable terms for the buying group. And, the seller received a payout equal to the full asking price.
- 90-bed community-based residential facility
- 5 buildings on 2 campuses located 10 miles apart
- $10 million sale
To learn more details, reach out to Bob Richards who served as the seller’s lead advisor. Reach him by phone at (608) 825-4200, ext. 106 or by email at firstname.lastname@example.org.
Thinking about selling an assisted living property or business? Contact the team at Senior Care Realty. We’d love to learn your story, understand your challenges, and explore how we can help. Call (608) 825-4200 or email email@example.com.