Goodwill may be difficult to measure, but it can have an enormous impact on the future success of a medical transportation business. Goodwill is essentially the result of years of hard work on behalf of a business owner. Qualities such as a strong safety record, an ideal location, or technologically-advanced equipment may all be considered goodwill because, although their value cannot be measured accurately like tangible assets, they do produce benefits. Here are a few ways goodwill can factor into your purchase of a medical transportation business for sale.
Location is everything for a transportation-based business. If a region’s needs are already being adequately met by a competing medical transportation business, it’s going to be difficult to convince local customers to switch to your company. If you’re the only game in town but you’re located in an extremely rural area, you might not have the client base to support your business. For this reason, an existing company with an established market or an extremely convenient location holds more value than a very similar company without these advantages.
The weeks after an ambulance business changes hands are a volatile time. It’s common for customers to contract with competing businesses rather than stick around to see what direction the new leadership will take. However, goodwill can play a role in how customers react. When a company has made a positive impact on clients, they may be more likely to stay loyal. Of course, too much goodwill can backfire. If the former owner was intimately involved with every part of the company – essentially, if he or she was the face of the business – it may be hard to convince customers to give someone else a try. Business buyers may be able to mitigate some losses by the way they handle a transition – for instance, by offering enticing promotions and refraining from making sudden changes.
Business owners create a company culture by the way they interact with employees. If owners treat their management and drivers like equipment rather than human beings, employee loyalty and commitment will be affected. Owners who treat their workers with respect and compassion create a culture of ownerships. Happy employees are more likely to treat customers well, comply with safety requirements, show up to work on time, and enjoy overall job satisfaction. When a work environment is a positive place, employees may have more incentive to stick with an ambulance transport business during an ownership transfer. An established workforce reduces time and money spent on interviewing, hiring, and training. If customers have close working relationships with particular employees, keeping a team intact can help retain important business.
Assessing business value is not always cut and dried. What is valuable to one investor may not mean the same thing to another. An industry specialized intermediary such as a Tenney Group broker can identify acquisitions that offer the most value for your unique business needs.