Want To Sell? Is Your Agency Ready For The Store Window Or Is It Only Ready For The Clearance Rack?
October 5, 2021
5 Considerations Before Your Business Is For Sale:
- Clinical: Obviously this is a big one. Where are your outcomes right now? Are they better, worse, or the same over the last several years? Are your clinical processes solid or do things easily slip through the cracks in patient care? How well does your clinical manager know what is happening with patients? How is care coordination and how are service frequencies determined? What about efficiencies? How does documentation look? How many of your last 10 ADRs paid? If they didn't, what was denied? What about the accuracy of coding? How many days from admission until the RAP? These are things to firm up prior to ever considering a sale. Someone buying your agency needs to know that the process works.
- Financial: What is your current accounts receivable? How far out are you on collections? Is billing up-to-date? Have you lost reimbursement due to timely billing? If so, how much? What is the process from RAP through final billing? How often do you bill? Can you explain your costs in depth? What is your average mileage per clinician per day and per visit? Before you sell your agency, you need to be able to present the best financial picture possible to ensure you get the dollars the agency is worth. What is your average HHRG and visits per episode? Have you tried to decrease costs where it is possible to improve your bottom line?
- Marketing: What has your marketing plan been in the last 2 years? Are admissions up or is there a trend down? What has your marketing budget been? Is there really a true targeted marketing plan? Where do you focus your marketing efforts? What is your competition and how are they achieving market share?
- Personnel: What are turnover rates? How seasoned are your clinicians? What is the average length of time someone is employed with your agency? Basically, is your staffing volatile or stable. If it is NOT stable, can you explain what the problem is and how you are working to resolve it? What is your onboarding process? How do you provide oversight to employees and departments?
- Administration: Part of the changes in 2018 to the COPs dealt with the administrative oversight in agencies. How involved are you in running your business? Do you keep policies and procedures up-to-date and run your business accordingly? How does your report card look and what needs to change prior to selling your agency?
Buyer Beware:
If you are an established agency looking to acquire additional agencies, then some of the red flags brought up here today may not be an issue for you because you already have the infrastructure and administration in place. For others, the term buyer beware is important. Many of those situations mean that you are buying a business you want to keep rolling once the ink is dry on paper. If big problems exist, then you may be in way over your head. Make sure you have done a due diligence on the agency you look to purchase. Having someone look in-depth objectively at everything about the agency will give you a better plan moving forward and also help you determine how much the agency is actually worth.
Let Kenyon Homecare Consulting Help:
At Kenyon Homecare Consulting, we help agencies prepare for sale and help provide the due diligences for individuals looking to purchase agencies. If you are on either side of that coin, call us today at 206-721-5091 or contact us online
to see how we can help you make the most out of your sale or your acquisition.
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