What to Do Before You Sell Your Healthcare Business

Before You Sell Your Healthcare Business: The Essentials

Selling a healthcare business is a major decision. The work you do in the months before a sale will determine both value and certainty of completion. Use the steps below as a preparation plan you can action straight away.

1) Define what you want from the deal

Decide what a successful outcome looks like for you. Set target value and a walk away point, agree your preferred structure of consideration, decide how long you are willing to stay in the business post completion, and record non‑financial priorities such as staff protection, brand continuity and service quality. Clear objectives will guide every decision and make it easier to choose the right buyer.

2) Plan for tax efficiency and team incentives

Early tax planning can materially increase your net proceeds. Take advice on structuring the transaction to qualify for Business Asset Disposal Relief (BADR) or other relevant reliefs, ensuring that any qualifying conditions, such as minimum shareholding periods, are already met.

At the same time, consider management incentivisation schemes, such as Enterprise Management Incentives (EMIs) or growth shares, to align senior staff with the success of the sale. A motivated, invested leadership team can improve both valuation and buyer confidence.

3) Get your numbers investor ready

Buyers will judge quality of earnings, cash generation and working capital discipline. Prepare clean, reconciled monthly management accounts that include profit and loss, balance sheet and cash flow. These should ideally cover the last three years prior to a transaction.

Identify and document normalising adjustments, for example one off legal costs or exceptional owner drawings, and build a simple bridge from statutory results to adjusted EBITDA.

Create a rolling thirteen week cash flow so you can evidence day to day control.

4) Evidence a future revenue pipeline

Value improves when buyers can see resilient demand. Capture upcoming contracts, frameworks, referral patterns and waiting list dynamics, then show conversion probabilities and expected timing. Separate recurring revenue from one off project income.

Keep a dated pipeline report, highlight customer concentration, and prepare short notes on renewal likelihood and pricing power.

5) Reduce reliance on you

A business that runs without the owner attracts stronger offers. Delegate client relationships, appoint a clear second in command, and document core processes such as scheduling, compliance monitoring and incident reporting. Move key relationships to shared inboxes and role based accounts, then record where knowledge now lives.

6) Tidy compliance and clinical governance

Close any open actions with regulators or commissioners. Update policies, training records, audits and appraisals. Check contract files, insurance, data protection, safeguarding and CQC or equivalent governance packs. A clean file prevents price chips during due diligence.

7) Stabilise operations and people

Resolve staffing gaps, agency dependence, pay anomalies and rota fragility. Review supplier agreements and service level performance. Replace any short term fixes with simple, documented routines that a buyer can maintain.

8) Build a diligence ready data room

Create a structured folder set that mirrors buyer diligence. Include financials, tax, legal, HR, clinical governance, contracts, IT, facilities and insurance. Use consistent file naming, add brief summary sheets, and date every document. Keep a version controlled index so updates are easy to track.

9) Shape a clear equity story

Explain what you do, why you win work, and how growth converts to profit. Present service mix, unit economics, utilisation, capacity headroom, KPIs that matter in your niche, and two or three practical growth levers. Keep this concise and evidence based so it flows directly into an information memorandum.

10) Plan the transaction path

Choose an adviser who knows healthcare. Map the buyer universe, agree positioning, and plan a tight timetable. Decide early how you want to handle exclusivity, management presentations and site visits. Understand likely terms, including warranties and any earn out, and take early tax advice so the structure fits your personal position.

Quick Pre‑Sale Checklist

• Deal objectives written down and agreed

• Early tax planning advice taken (including BADR qualification)

• Monthly management accounts in place, including profit and loss, balance sheet and cash flow

• Adjusted EBITDA bridge prepared and explained

• Rolling thirteen week cash flow maintained

• Evidenced revenue pipeline with probabilities and dates

• Documented processes and a named second in command

• Compliance files complete and up to date

• Staffing plan that reduces agency usage and key person risk

• Diligence ready data room with an index

• Short equity story and KPI pack that supports valuation

• Adviser, timetable and outreach plan confirmed