Jo Thornley, Head of Brand and Partnerships at Dynamis, and partner of BusinessesForSale.com, FranchiseSales.com and PropertySales.com, offers guidance on selling your care home
Demand for care home beds is growing rapidly in the UK. To fill the gap in the market, investment in the care home sector is skyrocketing. Despite the increasing number of entrepreneurs entering the scene, many are exiting for various reasons.
Whatever the reason for putting your nursing home business on the market, you have to tread carefully to make the most of the sale. To evade pitfalls associated with selling the business, you need to plan your sale carefully and consider the legal ramifications of every decision you make along the road.
What documents and legal requirements do you need to run a care home?
Before you put your care home business on the market, you need to ensure your affairs are in order. That means you must have the necessary documents and meet the regulations of running the business. The Care Quality Commission (CQC) is the independent body that regulates care home service providers in the UK. Therefore, your business must comply with the set standards.
Some of the regulations enforced by the CQC include:
The care home premises must meet the CQC requirements. You can run a care home from a residential property as long as they have the minimum floor space necessary. There are stringent rules on the floor spaces, communal area hand and grab rails, ceiling heights, and catering facilities. All the facilities on the premises are meant to provide top-notch care.
The owner must be registered as a care provider. The care home business can either be operated under a partnership, organisation or by an individual. However, one of the owners must be registered with the CQC as a care provider. The care provider should have a passion for caring for the elderly. They must also have the necessary expertise, management skills, and business abilities to deal with the elderly.
Every care home must have a care manager and trained employees. It is mandatory to have a manager with NVQ Level 4 expertise and experience in caring for the elderly. In addition, at least half of your staff should have relevant qualifications.
Health and safety requirements. The premises for the care home should be clean, safe, and ideal for the intended purpose. The environment should not compromise the health safety and respect of the service users.
You should meet the terms of the regular inspections from the CQC. Failure to comply with the inspections often results in closure. For those looking to sell their care home business, the rating from the CQC is vital. The regulating body often makes the scores public, and this can affect the offers from prospective buyers.
Following the regulations ensures a smooth transition and faster sale of the care home. The new owner will not encounter problems, and the value of the business will be high.
What can hold up the sale of a care home?
Selling a care home is a complicated process, and you should be ready for bumps on the road.
Here are the challenges you are likely to encounter:
Existing lease agreements. If the business is not a freehold property, you might encounter problems during the sale. The owner of the building could delay the process if they are unwilling to lease to the potential buyer.
Valuation of the care home. Due to the numerous methods of assessment, the buyer can take time when evaluating the cost of the business. The buyers have a right to hire their valuation team to check the profitability of the care home.
Failure to meet the necessary standards. The CQC conducts a regular inspection and provides a ranking. Therefore, if the business fails to meet the requirements or requires improvement, selling it will be a challenge.
How can the seller assist the buyer in closing the deal quickly?
As the care home business owner, you know the industry very well. Therefore, you can speed up the selling process by assisting the buyer. However, you need to vet potential buyers and rule out the jokers.
You can accelerate the sale by ensuring the buyer registers with the CQC as soon as possible since the process takes almost six months. Finding a care manager with the necessary qualifications can also be problematic. Therefore, if you can convince the employees to stay, the sale will go through faster.
Running a care home is not for the fainthearted. Therefore, you should seek professional help when selling the business to ensure your focus can remain on running the business during the sale process. If you do go with a professional, find someone who is familiar with the care home sector so that none of the specifics slip their mind. Going with a broker that knows the ins and outs of the care home sector will help to keep the sales process moving along so that you can sell your business as quickly as possible.