Selling your live in care business

Selling your live in care business with Phoenix Business Sales & Consulting (slides 1 – 4)

So, you’re thinking about selling your live in care business? Here at Phoenix, our team of experts help guide business owners through the process of selling their companies every day by offering the best advice, guidance and support from start to finish. Our knowledgeable team have experience of establishing, developing and selling their own health and social care businesses, which means that they can lead the sales process while fully understanding the industry pressures.

What do you need before you can sell your live in care business? (slides 5 – 6)

You will need to provide:

  • The last 2 years of financial statements or annual accounts for your live in care business.
  • Any management accounts for the period since of the end of the financial year, if it’s more than six months since.
  • Evidence of the quality of care that your live in care business provides. For example, positive CQC reports, Service User & staff surveys and staff training records.
  • Details of any Local Authority [LA], NHS and other contracts, including how long they have left to run.

Should you sell the shares of your live in care business? (slides 7 – 8)

Ordinarily it is better to sell the shares if at all possible, that way there is no need to change the LA contracts or the employment contracts for staff and care workers. There are also significant personal tax benefits associated with selling the assets and shares of your live in care business, for example entrepreneur’s relief tax at 10%.

How much is my live in care business worth? (slides 9 – 10)

When it comes to selling your live in care business, we understand how important it is to provide you with an accurate valuation. We calculate the value of your business based on a number of factors including:

  • A multiple of adjusted profits.
  • Geography.
  • The size of your business.
  • Net current assets.

What information will the buyer want? (slides 11 – 12)

There are several pieces of information that a buyer will want prior to considering purchasing your live in care business including:

  • The financial performance of your live in care company.
  • Any details of the existing staff contracts, for example hours per week, charge & pay rates and their duration.
  • The types of services provided and to who.
  • The number of care workers and office staff employed by the business.
  • Information about property leases.

How long does the sales process take (slides 13 – 14)

Depending on the complexity of your live in care business and assuming that most of the information outlined above is readily available, the sales process usually takes between 10 – 12 weeks.

How do I keep the sale process confidential (slides 15 – 16)

During the sales process, particularly in the early stages, we appreciate that confidentiality is hugely important. So, in order to make you as comfortable as possible we ensure that:

  • All potential purchasers sign a non-disclosure or confidentiality agreement before we share any information about your business with them.
  • Any meetings with potential purchasers are conducted away from the office and often outside work hours.
  • Any contact with you is always via Phoenix and always via a sensitive and secure means.

What are the costs involved with selling my live in care business? (slides 17 – 18)

An agency or corporate finance advisor will charge an agreed percentage of the total sale price, to be paid on completion of the sale. This is typically +/- 1% of the sale value, depending on how complex your company is. Depending upon how up to date the financial information of your company is, you may need to ask your accountant to provide additional support during the sales process, which can incur additional costs.

Can I use my own solicitor and accountant? (slides 19 – 20)

You can use your own solicitor or accountant when selling your live in care business, but make sure that you check whether they have previous experience of commercial healthcare & social care transactions, as this should make the sales process easier and quicker.

How much tax will I have to pay on the monies I receive? (slides 21 – 22)

Normally the sale of shares in a small / medium sized business will qualify for entrepreneurs’ relief, which means you’ll only need to pay a one off tax charge equal to 10% of the net proceeds you receive from the sale.

Will the purchaser want to buy or continue to rent the offices too? (slides 23 – 24)

As we mentioned earlier, potential buyers will want to see details of any property leases linked to the business. In the majority of cases purchasers are keen for the company to continue operating from its existing premises post sale. As such, one of three things will more than likely take place:

  • The purchaser will take on the responsibility for the existing lease.
  • The buyer will enter into a new lease for the existing premises
  • The buyer will purchase the property.

Contact us (slides 25) | 0845 4750 120

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