Who Are You Selling Your Business To? 9 Factors To Consider
When you are preparing to sell your healthcare business, there may be a number of potential buyers – strategic buyers, private equity firms, partners, employees, and even family members. There are at least nine factors to consider in this process:
- Personal timing – if you have a very short time frame selling to a family member may be very difficult.
- Commitment to partners and/or employees – such a commitment may lead you down the path of an ESOP or bonus for your employees at the point of transaction.
- Family considerations – is there a family member with an expectation of taking over?
- Payoff schedule – how quickly do you need to receive the bulk of the purchase price? The longer the time frame the greater the flexibility.
- Risk tolerance – larger buyers with cash may be preferred to a partner or family member who wants significant seller financing.
- Future plans – your personal plans may affect the time you are available for a transition.
- Purchase agreement structure – the architecture of your final agreement may affect the buyer type, especially in a stock vs. asset purchase.
- Legal structure – how you are legally structured may significantly narrow the field of potential buyers.
- Marketplace trends – depending on the marketplace the type of buyers may be increased or restricted, especially if regulatory or payer changes are in the offing.
These factors individually do not rule out specific buyers, but it’s useful to consider all of these and others when you assess the field of potential buyers for your marketing efforts.