Selling a Home Care Service – Tips for Choosing the Right Time

Selling a Home Care Service – Tips for Choosing the Right Time

Selling your business is rarely an easy decision — especially considering the time you have invested in it, the established daily routines, and the employees who have become close to your heart over the years. Change is seldom straightforward. That is why it is all the more important to begin the sale process early.

Selling Under Time Pressure? Not a Good Idea.

The mental process typically begins 5–7 years before the actual sale — often with the thought: "Maybe one of my employees could take over the business." This is a first step, and by no means a bad one, as it leads to actively engaging with the topic for the first time and starting to structure the finances so that a successor can gain a clear overview.

However, a first setback usually follows: managing a home care service as an employee and running an ambulatory home care company as a self-employed business owner are two entirely different things. Not every person is cut out for self-employment. In practice, we frequently observe that business owners end up selling externally after months of onboarding potential successors — often including the originally intended internal candidate, who backs out at the critical moment.

This withdrawal is not an isolated case. Particularly in times of skilled labour shortages, growing administrative pressure, and a changing attitude towards professional burden, the willingness to take over within the workforce has noticeably declined. What began with good intentions as an internal succession not infrequently ends in a sale decision under time pressure — because the originally planned successor gets "cold feet". As a result, retirement approaches faster than the remaining time frame allows.

Our recommendation therefore: a business sale should be planned early and should include multiple offers.

This means: the sale of an ambulatory home care service should ideally be planned three to four years in advance. Especially in an industry like care — a true "people's business" — a carefully planned handover is crucial. Not only to secure patient loyalty after the transition, but also to proactively cushion uncertainties within the workforce.

Dressing Up the Bride — With a System

Anyone who wants to sell their care business successfully must not only prepare it in time — but actively enhance its value. The oft-cited advice to "dress up the bride" is gaining increasing economic relevance in the care industry. In practice, this means: creating structures. Because prospective buyers — whether strategic partners or investors — are scrutinising more closely than ever before.

A key lever for adding value is digitalisation: home care services that adopt smart software solutions early, automate their administrative processes and thereby free up skilled workers from time-consuming bureaucracy, increase not only their efficiency — but also their company value. Digital billing, route planning, automated controlling and audit-proof documentation are the key to the optimal purchase price.

But beyond technology, what matters is also what is lived internally: functioning management levels below the ownership level, stable staffing ratios, low turnover, and a clearly communicated mission statement. All of this signals to potential buyers: this business works — even without the founder at the helm.

Selling from a Position of Strength — Not Out of Necessity

Ideally, a sale takes place in a financially stable situation, with a positive earnings position and existing growth prospects. However, this ideal constellation is becoming increasingly rare in practice. The reason: the industry is under pressure. The so-called "care service die-off" is on everyone's lips.

The causes lie, on the one hand, in rising personnel costs — driven by collective bargaining agreements, minimum wage adjustments, and competition for qualified staff — and, on the other hand, in reimbursement rates from cost-bearers that frequently fall short of actual expenditures. Particularly in the ambulatory sector, care rates are often not fully adequate — at least not when routes are not precisely planned. Added to this is the fact that payment terms from health insurance funds of up to six weeks are not uncommon. At the same time, operating costs — from energy costs to rents to IT infrastructure — are rising in some cases significantly more than the standard rate. On top of this come massive bureaucratic requirements, constant legislative changes, lengthy approval procedures, and a growing shortage of reliable administrative staff.

In short: anyone who wants to sell their business must not wait until the figures deteriorate. The ideal moment — from a business perspective — is always when the company is stable but still has development potential. Only then can a buyer identify and assess opportunities. Those who wait too long risk not only a lower price — but also that the business may no longer be viable for handover at all.

Note: This article is part of our healthcare industry series. Contact us at valuation@adamsstrategy.de for advice on M&A in the care sector.