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3 Tips for Protecting NEMT Business Value

Last updated on August 21, 2012 by Sozo Staff

Value has the power to influence nearly every aspect of business ownership. Whether you hope to secure financing for a business acquisition or receive a good price when putting your non emergency medical transportation business for sale, your success will hinge largely on the current market value of your company. A company’s value is based on a wide range of factors, including assets, cash flow projections, business history, and market demand. While the worth of a business can’t be changed overnight, business owners can protect – and, often times, improve – their value through careful and strategic planning.

Be Prepared

Many business owners put off planning for their exit because they assume they won’t sell their business until they retire. Unfortunately, companies often end up on the market earlier than anticipated due to unexpected but common events such as divorce, medical issues, or economic conditions. Owners who are forced to sell suddenly won’t have time to boost value or find their best buyer. Don’t wait until it’s too late to improve your prospects. By developing different exit scenarios before you plan to sell, you can ensure every business decision you make prepares your business for the market – whether it’s structuring the company so that it is more attractive to strategic buyers or grooming a preferred successor for taking over.

Keep It Confidential

As they say, if you’re not growing, you’re dying. Every medical transportation business owner will one day have to consider either expanding their company or putting their ambulance business for sale. In both scenarios, maintaining privacy is paramount. Employees, customers, and suppliers are notoriously wary of new ownership. If word spreads that the business you own – or the business you are thinking of buying – is on the market, the news could negatively impact operations, earnings, and value. In addition, competitors may attempt to take advantage of the situation by luring away customers. Enlisting the services of a transportation business broker will ensure your private plans stay private.

Get Diversified

While there’s no way to stop the economy from fluctuating or customers from leaving, it is possible to insulate a business from these events. NEMT business owners with high customer concentrations are considered more risky – and therefore less valuable – by lenders and buyers because losing just one or two clients could jeopardize the viability of the entire company. By expanding your client base with a larger number and wider variety of contracts, it’s possible to improve operations while also protecting value.

Acquiring another ambulance company for sale is one way to quickly lower customer concentration. Another strategy for boosting value is to reduce reliance on any single employee, including the owner. If you are synonymous with your business, it’s too easy for the company to fall apart in an emergency or under new leadership. By putting policies and procedures into writing and cross-training employees, owners help make it possible for their business to thrive in a variety of circumstances, including their exit.

Of course, it’s impossible to make decisions about value if you don’t know your company’s value in the first place. A transportation business broker is your best resource for an accurate and thorough business valuation. When you understand value, you can truly understand your business.

Filed Under: Transportation

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