Is it time to sell your nursing home?
Time to cash out? Regulations bringing you down? If it is time, it is time. In order to achieve your financial objectives, you will want to prepare your facility at least 6 months in advance of putting it on the market. 6 months you ask? I want it sold in 6 months, not just get started in 6 months. Realistically, it won’t sell that quickly. You can expedite things by doing the following activities in order to increase your nursing home value while speeding up the sales process by making it easier for buyers to make their decisions.
INCREASE YOUR REVENUE
Increase Your Referrals
This is a good time to make regular visits to your referral hospitals, clinics and physicians. Make a point to contact all of them in your market. Buy them donuts and invite them to facility events. Investors like to see regular referrals. Buyers see referral revenue stream as a positive
Beef Up Marketing
Aggressively implement your most effective market programs.Buyers like to see income increase over a 6 months period.
Itemize Services
Separate your base rent from service charges. This will allow you to itemize value added services and position them as additional revenue streams to your potential buyers
Maximize Earnings
Work with your staff to determine opportunities to maximize your earnings. Develop methods to increase your rents so potential buyers will see a uptrend in earnings which directly impact the bottom line.
Increase Your Referrals
This is a good time to make regular visits to your referral hospitals, clinics and physicians. Make a point to contact all of them in your market. Buy them donuts and invite them to facility events. Investors like to see regular referrals. Buyers see referral revenue stream as a positive
Beef Up Marketing
Aggressively implement your most effective market programs.Buyers like to see income increase over a 6 months period.
Itemize Services
Separate your base rent from service charges. This will allow you to itemize value added services and position them as additional revenue streams to your potential buyers
Maximize Earnings
Work with your staff to determine opportunities to maximize your earnings. Develop methods to increase your rents so potential buyers will see a uptrend in earnings which directly impact the bottom line.
STABALIZE YOUR EXPENSES
Buyers expect to see stable or a slight rise in expenses.
No one likes surprises!
Clean House
Examine your payroll and eliminate any positions that are not key to operations. You know what I am talking about. Your spouse or relative who is micro-managing your bookkeeper. You will want to remove these positions at least 6 months prior to a sale in order to prove that these roles weren’t critical to maintain quality of care and census level.
Review Expenses
Itemize on your income statement any extraordinary and non-recurring revenue or expenses. This could include your family’s cell phones, car expenses, travel, etc. If it isn’t critical to facility operation, have your bookkeeper separately itemize it.
Reduce Expenses
Work with your staff to eliminate or reduce any unnecessary operating expenses while not sacrificing quality of care. This might include reducing your agency employees, renegotiating your therapy, dietary and leasing arrangement. The time to tighten your ‘belt strap’ is 6 months in advance of when you expect to sell.
STABALIZE YOUR EXPENSES
Buyers expect to see stable or a slight rise in expenses.
No one likes surprises!
Clean House
Examine your payroll and eliminate any positions that are not key to operations. You know what I am talking about. Your spouse or relative who is micro-managing your bookkeeper. You will want to remove these positions at least 6 months prior to a sale in order to prove that these roles weren’t critical to maintain quality of care and census level.
Review Expenses
Itemize on your income statement any extraordinary and non-recurring revenue or expenses. This could include your family’s cell phones, car expenses, travel, etc. If it isn’t critical to facility operation, have your bookkeeper separately itemize it.
Reduce Expenses
Work with your staff to eliminate or reduce any unnecessary operating expenses while not sacrificing quality of care. This might include reducing your agency employees, renegotiating your therapy, dietary and leasing arrangement. The time to tighten your ‘belt strap’ is 6 months in advance of when you expect to sell.
PHYSICAL PLANT
Building Inspection
Inspect your building and conduct a cost-benefit analysis and make necessary capital investments to aid the future sale. They might be new roof, parking lot, replace bathroom or hallway floors. You might need to replace your hot water heaters, HVAC or beef up your security for memory care or Alzheimer’s.
Floorplan Examination
Examine your floorplan and eliminate any 3 or 4 bed rooms.Those unit mixes are from a different era and no one likes them anymore.
Optimize Your Facility
Try to re-configure any long narrow hallways, low ceilings and poor lighting. Someone wanting to buy your facility will not want to see them and will reduce the amount of their offer knowing they will have to pay to get rid of them after purchase
DON’T DELAY.
You don’t want to wait until the last minute to prepare your facility for sale. Buyers don’t like irregular financial statements, chaotic operations or surprises after they take over. Make everyone’s life easier and prepare. You can also contact Laurex Advisors and we will answer questions you have.
HOW TO INCREASE YOUR NURSING HOME VALUE
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