No one understands the ins and outs of the ambulance business like an ambulance business owner. But when you’re dealing with everyday details like dealing with customers and handing out paychecks, it can be easy to lose sight of the big picture. Many owners have no idea what their business is actually worth.
You don’t have to be ready to put your medical transportation business up for sale to benefit from understanding its true value. A business valuation can help you make important decisions about growth, reinvestment, and your future.
You might not be planning to put your ambulance business for sale any time soon, but what if an investor approached you with an offer out of the blue? You may be naturally inclined to turn down the offer, but how do you know it’s the right decision if you’re not sure whether their price was fair? Knowing the true value of your business – and not just what you perceive to be the value – can allow you to take advantage of every possible opportunity. An industry professional can point out weaknesses and strengths in your company that you may be overlooking. By understanding what areas of your company will generate the most returns on reinvestments, you can begin to structure the business in a way that maximizes value. When you do receive a fair offer, whether solicited or not, it may be for considerably more.
Waiting Too Long to Sell
Many owners wait too long to sell their business because they refuse to believe it’s time to throw in the towel. Maybe they’re holding out hope that earnings will rebound with the market. Perhaps they believe that a disagreement with a business partner or spouse will resolve itself. By ignoring the problem until profits have disappeared or a spouse has filed for divorce, owners allow value to erode considerably. Buyers don’t want to take on damaged goods, and if they do take a chance on a down-and-out business, they’ll be looking for a bargain. It’s a lot more appealing for a buyer to hear you’re selling to enjoy more time with the grandkids or to move on to a new investment project than to hear that you listed your ambulance service for sale because you’re flat broke and have no other option. It’s always better to sell a business when it’s growing, not slowing. When you understand value at every step of the way, you’ll be better able to time a sale to your advantage.
When it comes time to sell, many business owners make the mistake of overpricing. Naturally, your company will be worth more to you than to an impartial party because of sentimental value and your countless hours of work. Unfortunately, this means nothing to a buyer. A business is ultimately worth what the market will pay for it. Yes, some buyers will be willing to pony up more cash than others because your company offers them strategic benefits such as client contracts or an established brand. But they must still base their offer on real profit potential.
It’s normal for a business owner to view their company in a favorable light. By recognizing you have a natural bias – and compensating for it with a professional business valuation courtesy of a transportation business broker – you’ll ensure that when you do decide to sell your medical transportation business, you’ll be in a position to reap the best rewards.