The DC Care team liaises with many sector-specific professionals, all of which have many years’ experience in care, including solicitors, finance brokers, accountants and bank contacts on a daily basis and can provide contact details upon request.
For example, it would be prudent to consult an accountant for tax advice on whether to sell the shares or assets (if relevant). It is highly recommended that a solicitor with legal experience in the healthcare sector is chosen for the due diligence process, they can promptly expedite matters and enable a sale to progress smoothly and swiftly.
The due diligence process involves potential purchasers looking at your business in great detail, examining everything from management accounts to staff rotas and photocopier lease agreements. You can make the process easier for yourself by ensuring that all your accounts, records and paperwork are all in order prior to instructing us to market your care business.
There are key areas within a care business that should be assessed and, where necessary, addressed. In any event they are principles of good business management, however leading up to a sale they will come under scrutiny from a potential purchaser and therefore any preparation you make should reap benefits.
- Upgrade or refresh your care facilities, avoid the impression that the property is ‘tired’. Major works to install en-suites, for example, may not be practical but there will be opportunities to improve that first impression.
- Ensure your energy supplier contracts are giving you the best possible tariffs. Heat and light is often the highest overhead after wages costs.
- Do you have historic data that shows trends in occupancy rates, and fees as well as average spend per resident on key items such as heat and light, maintenance, food etc.? A potential purchaser needs to understand how the business has performed and where he/she can made additional improvements.
- Have you taken advantage of energy efficiencies through items such as solar power or LED lighting that makes your home different?
- If you are an owner-manager, do you have a qualified and pro-active management team beneath you? Purchasers are very keen on ensuring the staff are both capable and suitably qualified and the home is not reliant on your personal input.
- Relationships with key referrers such as the Local Authority or GP practices can enhance the value. A strong network ensures that occupancy levels can be maintained.
- How does your business’ performance compare with other local providers? Can you demonstrate that you perform well above the average? If not, you should identify the areas of your business that fall short and make plans to improve.
- Do you actually know what your business is worth? Valuations tend to look at the maintainable earnings of the business rather than a ‘price per bed’ although this can still be useful benchmark. Does your management information make it easy to establish the maintainable earnings?
Once you have accepted an offer and instructed your solicitor to proceed with the legal due diligence, you will be asked to give warranties and possibly indemnities about the business. Warranties are promises you make about the business and, if breached, can result in a claim against you. If there are any obvious risks then the buyer also will want an indemnity from you – which will cover all their costs in resolving a problem. By identifying risks and concerns well in advance of the sale going ahead and (where possible) resolving these, you will be in a better position to give warranties in confidence, have control over how to resolve problems and to limit the extent of indemnities.
Are you looking to sell with us?
Click the below link for further details on preparing to sell your care business through DC Care.