If you’re thinking about putting your ambulance business for sale, you likely have a vision of what your life will look like after you exit the market. Whether that post-sale lifestyle will involve a comfortable retirement, world travel, or a new investment opportunity, funding it will inevitably require a certain amount of cash.
Many owners are disappointed to discover that they have a valuation gap, or a difference between fair market value and the cost of their anticipated lifestyle. Underestimating this disparity can mean struggling financially after the sale of your medical transportation business – or, if you refuse to budge on price, the inability to sell your business at all. Fortunately, there are strategies for bridging a gap in value.
To maximize value, you must first understand value. A transportation business broker is your best source for obtaining an accurate business valuation that takes into account both tangible and intangible assets. If you and your wealth advisers determine that a gap exists between your business valuation and the amount you’ll need after a sale, it’s time to look at value enhancement tactics.
Can revenue be increased through organic growth and a strong management team? Can expenses such as purchasing or staffing costs be reduced? Can risk be minimized by lowering customer concentration and owner dependence? All of these changes have the ability to increase value over time. Owners who carefully plan their exit strategies in advance can often increase the results of their eventual sale by 25 to 50 percent.
Finding the Right Buyer
While price must be based on value, that value can vary greatly by buyer. Every business has some amount of hidden value. These are assets that could benefit a savvy investor or business owner, but may not be easily spotted in your financial statements.
Perhaps an existing ambulance business could use your location to expand into a new market. Maybe a medical facility could use your fleet to take their transportation services in-house. By communicating a company’s unique traits to the investors most likely to gain from them, business owners can often garner a higher price. With a large database of industry contacts, experienced transportation business brokers have the ability to target and appeal to your best possible buyers.
Reducing the Gap through Acquisition
Acquisition won’t be a solution for every business owner. But for those able to invest the cash and time, expanding through the purchase of the right ambulance company for sale can grow value exponentially by increasing market share and cash flow and reducing costs and risk.
When it comes to valuation, knowledge is power. Recognizing a value gap well before you put your ambulance transport business for sale allows more time to improve your business – and your potential for returns.