Customer contracts are the lifeblood of a medical transportation business. An established client base means constant cash flow, insulation from competition, and greater business value. But securing those all-important documents can be a challenge in the competitive ambulance industry, particularly for new business owners.
By acquiring ambulance business contracts along with an existing company, buyers can reduce the time, cost, and risk associated with wooing new clients, providing the freedom to get right down to business.
Like most customers, medical transportation business clients aren’t too keen on change. If their needs are already being met by a local company, they probably have little incentive to switch. Often times, new business owners make the mistake of attracting customers with low initial rates that are unsustainable over time. Because breaking into a new market in the ambulance business is a challenge, many owners choose to take advantage of an existing market.
By purchasing or merging with an established ambulance business for sale, buyers can often acquire the previous owner’s contracts and client lists, not to mention contracts with suppliers, credit lines with vendors, and a proven location. Of course, it’s not a given that contracts and other intangible assets will be included in a sale. If you’re considering buying an ambulance company or growing the company you already own, make sure you understand what you’ll be getting for the price.
Besides providing existing contracts, acquiring a business can also make it easier to secure new contracts. If a company has been successful, it’s likely that there is goodwill associated with its brand and location. It takes a strong marketing plan to make potential customers aware of a new business, but an existing company comes with a built-in reputation.
It may also come with an experienced management team that has a history of meeting customer needs in the medical industry. When employees have built relationships with customers, those clients may be more likely to give a new owner a chance. On the other hand, if you’ve purchased a company that was performing poorly, a fresh face may be an asset when seeking new contracts.
Having contracts means nothing if you can’t keep them. Successfully making and maintaining client contracts requires basic business sense and a strong understanding of the emergency or non emergency medical transportation business. In addition to doing your preliminary research before entering the market, it’s wise to have a business owner coach you on the unique requirements of the job, from necessary medical equipment to unique billing methods for Medicaid ambulance coverage. If you’re acquiring an ambulance company for sale, owner training can make for a smoother transition for buyer and customers alike.