How To Value A Homecare Practice
Gary Rayberg, of ROIBusinessBrokers in Massachusetts, gives his advice on valuing homecare practices. He argues that homecare practices are in high demand, and that to achieve the highest value the owner needs to allow 3-5 years to prepare for the exit. This span allows for all that needs to be taken care of to ensure the practice is most ready for sale.
Once the owner has determined that he or she wants to sell, he or she should initiate a baseline business valuation to understand at what price the practice is currently valued. Typically, homecare practices are valued at two to three times the seller’s discretionary earnings, but can also be valued at a higher multiple of earnings before interest, taxes and amortization (EBITA). Seller’s discretionary earnings are EBITA plus the salary and benefits of the owner. (For a more detailed description, see sidebar on page 15.) A business broker or intermediary can best determine this number. Read the article here.
