Selling an ambulance business is often the greatest financial transaction of a lifetime for many business owners. Though an ambulance business sale offers the potential of significant rewards, it also invites the potential to make significant mistakes. Here are six mistakes to avoid when selling your ambulance business.
1) Don’t sell to someone you do not trust or that you do not like.
In many deals, it is common for the seller to stay involved in the business after the sale. Whether working as a general manager, part time public relations representative, or a for hire consultant, there is a strong possibility the seller may have some kind of post transaction relationship with the buyer. Additionally, the buyer is going to become the trustee of the legacy you have built through your business. If you cannot stand to be in the same room with the buyer, or if you do not trust the buyer (personally or professionally), it is best to focus your attention on selling to someone else. Even if working out a deal with someone you feel comfortable with involves a slightly reduced sale price, maintaining your peace of mind will be worth it and then some.
2) Don’t assume that your competitors are not interested in acquiring your ambulance business—even if they tell you directly that they are not interested.
Competitors are often able to financially justify the highest sale price for your ambulance business. Resist the urge to give up on them even if they tell you they are not interested in your business. Every business owner in the industry has to be careful about sharing strategic plans with competitors. It is understandable if they are slow to demonstrate their true interest in your business. It is also common for competitors to initially underestimate or misunderstand the financial impact available through acquiring your business when they have limited information or limited experience with transactions. With a little coaching from an industry professional, they may have a completely different outlook on acquiring your ambulance business.
3) Don’t leave money on the table.
This seems obvious, but unfortunately too many transportation business owners walk away from an ambulance business sale with less money in their pocket than they should. One reason business owners leave money on the table is because they rely on their own ability or a general business broker who does understand business value in the transportation industry to negotiate and structure a deal. Another reason ambulance business owners leave money on the table is because they wait too long to sell. If you are pouring money into a distressed business to keep it afloat, you might want to talk to a professional about the potential return on your reinvestment in your business before emptying your retirement fund. If your business is struggling financially or if you are facing serious health issues, discuss your options with an industry transaction specialist immediately. The more unstable your business appears to a buyer, the more difficult it will be to attract the right offers for you.
4) Don’t forget to be fair-minded in your approach.
Sellers can at times be quite rigid when it comes to selling their ambulance businesses. Unfortunately, a rigid attitude towards deal making is the quickest way to turn off a buyer that is ready to pay you top dollar for your business. Being fair-minded gives you the best chance to accomplish a greater and more lasting result through your business sale. Some examples of sellers being fair-minded include: being flexible on deal structures, being available for a reasonable post transaction training period, establishing the sale price allocation in a manner that offers tax benefits to the buyer and the seller, etc.
5) Don’t be limited by your own understanding when it comes to bridging buyer and seller valuation gaps—particularly when dealing with your “best” buyer.
The Tenney Group sees it all over the country. A potential buyer and seller instinctively know that working out a deal could be financially fruitful for both parties. Unfortunately, the two ambulance business owners can not get on the same page when it comes to establishing a value for the seller’s business. In this situation, the greatest mistake you can make is to waste this opportunity. Through over 170 successful transportation business sales, The Tenney Group has observed that the difference between the offer from your “best” buyer and the next best offer could be as great as a 50% reduction. Don’t waste an opportunity to get a deal done with your “best” buyer. Engage a third party industry professional to help both parties understand fair market value and how to structure a deal that allows both buyer and seller to accomplish their respective transaction goals.
6) Don’t make your business sale something that it is not.
Business owners that are happiest with their ambulance business sales are those that have educated themselves about the sale process and fair market value. They understand in advance what the sale of their business will accomplish for them financially. Just as important, they understand what it will not accomplish for them. For some business owners, a business sale is not going solve every financial problem or provide the means to comfortably retire. The Tenney Group takes pride in delivering transportation business sale results that are superior to any other business broker in the world. However, we can not make a business sale something that it is not. When sellers make their business sale about anything but securing a fair market value sale price, they set themselves on a path rich with disappointment and lost opportunities. Get the facts about a future business sale and consult a trusted financial advisor and transaction tax strategist on how make the most of the proceeds from your ambulance business sale.