The best exits don't happen by accident. They're the result of intentional preparation, usually starting 12-24 months before going to market. Here's a practical roadmap for maximizing your valuation and ensuring a smooth transaction.
Phase 1: Foundation (Months 1-3)
Get Your Financials in Order
Clean up your books. Separate personal and business expenses. Document all add-backs. Buyers will scrutinize 3 years of financials—make sure they tell an accurate story.
Understand Your Payer Mix
Break down revenue by payer source (Private Pay, Medicaid, Medicare, VA). Diversified payer mix = higher multiples. Heavy Medicaid concentration = risk discount.
Get a Realistic Valuation Estimate
Know your range before you start. This prevents wasted time on unrealistic expectations and helps you set meaningful improvement targets.
Phase 2: Optimization (Months 4-8)
Reduce Owner Dependency
Document processes. Cross-train staff. Delegate client relationships. The goal: your business should be able to run without you for at least 2 weeks.
Address Concentration Risks
If one referral source is more than 20% of revenue, diversify. If one client is more than 10%, grow other accounts. Concentration = risk = lower multiple.
Improve Margins Where Possible
Review billing rates, caregiver pay structures, and overhead. Even small margin improvements multiply across your valuation.
Stabilize Your Team
High caregiver turnover is a red flag. Invest in retention. Lock in key employees with stay bonuses or agreements if needed.
Phase 3: Preparation (Months 9-12)
Assemble Your Advisory Team
M&A advisor (if using one), transaction attorney, CPA with deal experience. Interview multiple candidates. Check references from completed deals.
Prepare Your Data Room
Organize all documents buyers will request: financials, contracts, licenses, employee records, client lists, policies. Being prepared signals professionalism.
Define Your Goals
What's your walk-away number? Are you willing to stay post-close? What matters beyond price (employee treatment, client continuity)? Know this before negotiations.
Maintain Confidentiality
Don't tell employees, clients, or referral sources you're selling until necessary. Leaks create uncertainty and can damage the business.
Remember
Preparation isn't just about getting a higher price—though it usually does. It's about having options, negotiating from strength, and ensuring the process doesn't derail your business or your life. Start early, stay focused, and keep operating as if you might never sell. That's the mindset that leads to the best outcomes.