By carefully considering the following guidelines first time buyers should find themselves in a stronger position when looking to acquire a care business.
Experience
A care operator is required to take a very hands-on role in the running of their business on a daily basis, even with a registered manager in place. Do you have the required business and healthcare background to operate a care business?
If not, research courses or seminars that are available to expand your knowledge and gain any necessary qualifications. The regional governing bodies can advise on the different types of registration, inspection formats and the regulations care operators and their facilities are expected to adhere to. Familiarise yourself on how they operate and their powers.
- Care Quality Commission (England)
- Care Inspectorate (Scotland)
- Care Inspectorate (Wales)
- Regulation and Quality Improvement Authority (Northern Ireland)
Cash
Consider how much cash you have available. If you have no care sector experience you will have to make available a significant percentage of any purchase price and in the current climate at least 30% is standard. Be aware that additional forms of security may be required and that some banks are reluctant to lend to those with no experience.
Prior to beginning your search for a care business to buy it is highly recommended you consult with a specialist healthcare broker, who can advise you on what level of funding would be attainable, DC Care liaises with such brokers and can provide contact details on request.
CQC Rating
Lenders are more cautious when it comes to care homes with a CQC rating of ‘Requires Improvement’ or less, depending on your experience and capital available. It might be worth speaking with your bank or broker first before arranging a viewing for a home that is rated ‘Requires Improvement’ or less.
Location
We would recommend looking for a care business no more than 60 to 90 minutes from where you live, unless you are happy to relocate. As already stated, you may be required to have thorough involvement, including regular travel to your care business, especially in the event of an emergency.
Valuation and Legal Due Diligence
Once you have reached the stage that you have had an offer accepted on a business ensure that you instruct industry specific valuers and solicitors. You may have a trusted family solicitor but unless they are wholly familiar with the requirements of care businesses they will not be your best choice to undertake the process. Your bank or broker can select a suitable valuer for you and the DC Care team can recommend healthcare solicitors for undertaking the legal due diligence process.
Strategy
Any funding institution will want to see a three to five year strategy, full business plan, profit expectations and evidence of in-depth research to support the viability of your plans. Your bank or broker can assist you in the development of your business model.
Additional Research
Be aware of the market’s increasing high expectations in terms of quality of facilities and the provision of care. To understand this take a look at the following statutes provided by the government to understand their impact on existing businesses, new-build care facilities and any proposed extensions.
- Care Standards Act 2000
- Health and Social Care (Community Health and Standards) Act 2003
- Care Act 2014
- Care and support statutory guidance 2018
By following these guidelines a prospective purchaser should be well-armed to make an informed decision about any proposed purchase.
If you have obtained the knowledge and skills required and have funding through a specialist broker in place, sign in to your account or register with us for more information on businesses we have available.