Home  >  Discussions  >  Are Home Healthcare Businesses Good Investments? What About Future Growth?

Are Home Healthcare Businesses Good Investments? What About Future Growth?

Share This Page    See All Discussions    See All Contributors    All New Discussions & Comments

Comments & Replies: 2     Views: 2850     Posted By: Peter Siegel MBA  

A buyer contacted me about financing (the purchase of) a home health care business and asked me about the future of this industry - I take on this question with other Users And Intermediaries on BizBen regarding the home health care industry and it's future for potential buyers.

Topics: Buying A Business     Tags: buying a business



At one point in time, everyone has been reminded how important it is to respect our elders. From minding our p's and q's in our youth, to eventually giving back and taking care of loved ones who supported us in our upbringing, there are many different ways to show appreciation for our elders. There comes a point in life when many will depend on others to meet their every day needs, and rely on support for tasks that once came easily to them. A booming industry that values quality service to others, while enjoying healthy profits is the home healthcare industry.

The home healthcare industry is rapidly expanding and will continue to see vast growth into the 3rd decade of the 21st century. By 2020, there will be 5 million people in the United States ages 65 and older. When members of the baby boomer generation look to retire and seek home healthcare, professionals in the field will look to cash in. When looking for a business to buy in this industry, there are a few factors that a buyer should be aware of that can influence the rest of the buying process. As mentioned before, the market is booming so there will be plenty of competition to look out for. Additionally, most business in the home healthcare industry are sold as asset sales to help minimize the exposure to litigation during the sellerís era of ownership. In a field that may have added risk due to the clientele that is served, research into past incidents during the due diligence period are crucial to minimize the risk of walking into a bad business deal with hidden problems. Lastly, a potential buyer needs to be prepared for the constant need to hire new employees, as this industry sees a high turnover rate of employees. While it is incredibly rewarding work, it can also take its toll on the very people who are tasked with helping those in need.

When buying a home healthcare business, the value of the business goes far beyond the price tag. An appropriate price to pay for your new business can be found in the range of 4-7 times the current ownerís earnings before interest, taxes, depreciation, and amortization (EBITDA), or 2-4 times the sellerís adjusted net income.

After finding a price that you are willing to pay, you should know that SBA financing is commonly available for 75% of the total cost, by way of a 10-year loan. If you donít have a lot of money to spend on the remaining cost, seller financing in this industry in popular in the range of 10-25%. This means that you aren't necessarily required to have the full sum in your pocket, and can pay off your financial loans while you are enjoying healthy profit in the ballpark of 20 percent, which is an industry standard. Financing and having the costs covered by second and third parties is one of the many perks of purchasing a business in the home healthcare industry.

Replies To This Comment
Yes., home health care business's are solid investments and can provide a nice return on investment.

But, before you jump in with both feet make sure you take into consideration the following:

* Rising Employee wages and associated costs
* Increased licensing and government oversight
* Employee management and cost of ownership
* Competition, how many other home health agency's are in your area?
* Demographics, what's the Client base look like?

Again, yes this is a great business, and it's a growing industry as our Baby Boomers come along, just make sure you do your homework before diving in.



If you are considering this type of business as an option consider the following statistic. In the United States, 10,000 people per day turn 70 years old and it will continue at this pace for the next twenty years. All businesses that cater to this demographic, (all other things being equal) should see continued growth and expansion for the next 20 years.


  Helpful Resources To Assist In Selling And Buying California Businesses

Timothy Cunha, J.D., Business Broker, Northern California

Having managed and sold several businesses of his own, Tim offers business sellers extensive personal experience and professional expertise in building business value, planning a successful exit strategy, "packaging" and promoting the sale, and coordinating a successful sale. 844-237-6487 Toll Free.

Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence Services

Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 800-864-0420.

Joel Miller, Broker Specialist, Elderly Care Services

Senior Care Services Specialist - Business Broker, Consultant, Due Diligence: Elderly Care Homes, Assisted Living Homes, Adult Residential Facilities, Hospice, Congregate Living, Independent Living, Care Services. Areas: San Diego County, Orange County, Inland Empire. Joel Miller at 619-866-4310.

Christina Lazuric, CBI, Business Broker - Orange County

California Business Brokers, one of Orange Counties top selling business brokerage. I sell successful businesses in the Orange County area. Professional Business Broker, both a Certified Business Broker & a Certified Business Intermediary. Call me for a free confidential evaluation - 949-257-7823.

Janet Carrera - Escrow & Bulk Sale Services - SF Bay Area

Redwood Escrow Services, Inc. is a full service, licensed independent escrow company. We are EAFC Fidelity bonded, fully insured & licensed with the Department of Corporations. Committed to offering our clients the most comprehensive variety of escrow services available. Phone Janet at 510-247-0741.

Bob Baumgarten, Business Broker: Orange, LA Counties

National Business Brokerage is a full service brokerage company that has been serving buyers and sellers of Southern California businesses since 1994. We are dedicated to providing the highest standards of professional service for our clients. Phone Bob direct at 949-588-8727.

Diane Boudreau-Tschetter: Escrow And Bulk Sale Services

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Michael Davidson, Business Broker - Southern California

Los Angeles Business Broker providing M&A quality services for Small Business Owners. We leverage our technology and expertise to Simplify & Expedite the Business Sales Process. Matching the right buyer with the right business is how we define success.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews

Buying A Dental Practice: 6 Things You Need To Know About Dentist Practices

Buying a professional service business, like a dental practice, is one of the most profitable ventures you can enter as a dentist. In this blog, Peter Siegel, MBA discusses six things you need to know about buying a successful dental practice or office: finding a practice, financing, deal structure.

Are Home Health Care Businesses Good Investments? What About Future Growth?

A buyer contacted me about financing (the purchase of) a home healthcare business and asked me about the future of this industry - I take on this question in a BizBen Discussion. Reach Peter Siegel, MBA (Business Purchase Financing Expert, ProBuy/ProSell Program Advisor at BizBen) at 866-270-6278.

Financing Advice: Showing Add Backs To Get Business Acquisition Financing

When seeking business acquisition financing, it helps to review a seller's addbacks as a source of funding to service the debt service. But explain them correctly. Peter Siegel, MBA business acquisition financing expert and advisor at 866-270-6278 covers this topic on financing a business purchase.

Absentee Run Businesses - A Myth Or Reality When Buying A Small CA Business?

Some buyers search for an absentee business to own, wanting to collect profits generated by a successful enterprise without having to stand at the sales counter or cash register, without having to cook, operate equipment or talk to customers. Here's some insight about finding such a business.

How Many Listings Is Too Many For One Broker To Handle? Is It 5? 10? 20?

Peter Siegel, MBA in this Vlog/Podcast discusses how many listings is too many for one business broker to handle at one time. Is it 5 is it 20? I recently had a coaching call with one of my BizBen broker clients who asked that question this week. There are many factors that go into the answer.

Why Isn't My Business Selling? 6 Great Questions To Ask Yourself For Answers

It can take months, sometimes longer to sell a small business. Here are 6 questions from Peter Siegel, MBA (Business Purchase Financing Expert, ProSell Program Advisor with BizBen) at 866-270-6278 to ask yourself to help you determine why your small to mid-sized California business isn't selling.

Buy A Business Or Start From Scratch? 5 Key Differences For Business Buyers

Some buyers believe it's better to start a business from scratch rather than buy an existing enterprise. While this may be good advice in some cases, usually it's not the best strategy. Here are five tips to help a buyer make the right decision from from Peter Siegel, MBA (BizBen Director).

I am Buying A Business: Should I Buy The Property As Well? A Good Decision?

There are advantages and disadvantages to owning commercial property. Here are a few questions to ask when it comes to deciding whether or not to buy the property along with the business. Peter Siegel, MBA with the BizBen ProSell Program reviews this issue with potential sellers and intermediaries.

See All News, Tips And Events

Chuck Post Laundromat Industry Expert
Chris Lazuric Orange County California Broker
Larry Larsen Laundromat Broker
SBA Loans For Gas Station Financing


Auto Related
Business Services
Children Related
Communication Related
Computer, Internet Related
Construction Related
Entertainment Related
Financial Services
Health, Beauty Related
Home Improvement Related
Maintenance Related
Manufacturing Related
Media, Publishing Related
Pet Related
Photography/Video Related
Real Estate Services
Restaurant, Food Related
Retail Related
Service Related
Sports Related
Transportation Related
Travel Related
Wholesale Related

Auto Body Shops
Auto Repair Shops
Bakeries
Bars, Sports Bars
Cafe Restaurants
Car Washes
Cleaning Services
Clothing, Apparel Stores
Coffee Shops
Convenience Stores
Deli Restaurants
Discount, Dollar Stores
Dry Cleaners
eCommerce Websites
Fast Food Restaurants
Florists, Flower Shops
Full Service Restaurants
Gas Stations
Gift Shops
Gyms, Fitness Facilities
Home Health Agencies
Hotels/Motels
Ice Cream Shops
Juice, Smoothie Shops
Laundromats
Liquor Stores
Markets, Marts
Nightclubs
Pizza Restaurants
Postal, Shipping Stores
Preschools, Day Care
Print Shops
Salons, Beauty Shops
Sandwich Shops
Smog Test Only Shops
Smoke Shops
Spas, Med Spas
Sushi Restaurants
Tire Shops
Towing Services
Vending Routes
Wireless, Cellular Shops
Yogurt Shops

Alameda
Alpine
Amador
Butte
Calaveras
Colusa
Contra Costa
Del Norte
El Dorado
Fresno
Glenn
Humboldt
Imperial
Inyo
Kern
Kings
Lake
Lassen
Los Angeles
Madera
Marin
Mariposa
Mendocino
Merced
Modoc
Mono
Monterey
Napa
Nevada
Orange
Placer
Plumas
Riverside
Sacramento
San Benito
San Bernardino
San Diego
San Francisco
San Joaquin
San Luis Obis
San Mateo
Santa Barbara
Santa Clara
Santa Cruz
Shasta
Sierra
Siskiyou
Solano
Sonoma
Stanislaus
Sutter
Tehama
Trinity
Tulare
Tuolumne
Ventura
Yolo
Yuba

0 to $99,999
$100,000 to $249,999
$250,000 to $499,999
$500,000 to $999,999
$1 million to $2 million
over $2 million




BizBen - Where California Deals Get Done! 888-212-4747
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2017, All Rights Reserved

                       
Sign Up Today - For Our FREE BizBen Weekly Email Newsletter
Includes The Best Info On Buying, Selling, Valuing, Financing California Businesses:
Articles, Blog Posts, Podcasts, Videos/Vlogs, Discussions, Q&A, Workshops, Webinars,
Resources. Watch For An Email Confirmation After Signing Up Above. Thank you.


Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.



First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*
Phone:
(   
 


You Are A:
Individual
 
Intermediary
 

Email Address:
Password:
 
Search BizBen.com

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Buying A Dental Practice: 6 Things You Need To Know About Dentist Practi...
Are Home Health Care Businesses Good Investments? What About Future Grow...