Having an injured or ill family member can be overwhelming, not adding the stress of the massive details of safe medical transportation. You have hired the best staff to coordinate and schedule the safe transport of patients. And after your last client is dropped off safely at their destination, you often find yourself wondering, “What is my medical transportation business worth?”.
A broker can help you find the answer to that question, but understanding the process is always beneficial to you as an owner. After all, your objective is to receive the maximum value for it, and in order to do that, you must first look at the many variables that come into consideration when looking at the possibility of selling your medical transportation business.
In order to show you the different variables, we have taken data from the last decade of all the medical transportation businesses sold in the United States that met our criteria, and broken it down for your further review in order for you to make a solid decision on the sale of your business.
What is your medical transportation business worth?
The value of your medical transportation business is correlative to your individual business, the market and what potential buyers are willing to pay. Medical transportation businesses offer a specific service, so being on top of your game is essential. But while you are trying to figure out how much your business is worth, here are some questions that should be answered before trying to value the price of your business.
- What are the sales?
- What is the profit?
- What are the growth trends?
- What is driving new sales and is that sustainable?
- What channels do new customers come from and what is the breakdown of each channel?
- What is your market position?
- Is your Location favorable?
- How reliant is the business on the owner?
- What systems and processes are in place to run the business?
What makes a transportation charter business worth more?
When a buyer looks at purchasing your business, they are basically looking at their rate of return on their investment. So when will they recover what they have spent on the business? In order to show the prospective buyer that their ROI will be high and their relative risk will be low, you should have the a few key characteristics associated with your transportation charter business.
And while it is true that the profit and sales are considered very important aspects when considering to purchase a business, they are not the only factors that can add or decrease value the value of your business. The following characteristics will give your business better value.
- Predictable key drivers of new sales
- Stable or growing traffic from diversified sources
- Established suppliers of inventory with backup suppliers in place
- Traffic stats
- High percentage of repeat visitors and repeat sales
- Clean legal history
- Brand with trademark, copyright or legal concerns
- Documented systems and processes
- Growth potential
What does the average transportation charter business sell for?
Looking at the graph, the broken down the data that we analyzed consisted of businesses that range in value from $50 thousand to $10 million. And these businesses can sell for as much as billions of dollars or as little as a few thousand. You can clearly see the average of medical transportation businesses sold in the last year in the United States is at 2.2 times earnings, with the average sale price coming in at $405,010.42. However, to have a clearer understanding you also have to look at the median sale at $262,500.00 and the most frequent sale was at $275,000.00, which also plays a factor in your valuation. All this information is a bit overwhelming without being broken down, so later in this article we will break down these numbers and give you the information needed to be able to start the selling process.
What is the most frequent deal size?
Since we live in an economy that has a market that fluctuates on a daily basis, pinpointing the exact answer to this question is not as easy as it seems. However, if you look at the data collected, the most frequently sized deal is a three way tie between the $0-250k, $250-$500k,$500-$1 mil ranges, although as you can see there are plenty of businesses sold in the different price ranges.
For example in 2018 there was 1 medical transportation business sold and that was in the 0-$250k range, but when you look at the $250-$500k range, there was 1 medical transportation business sold as well. But no need to worry if your business does not fall into either of those valuation ranges, there is a buyer for every business, finding that buyer is the key. And in order to find that buyer, we suggest finding the right broker to help.
Is the medical transportation business market getting bigger?
There will always be fluctuations in the market and trends. Medical transportation businesses are essential in the medical world, and there will always be a need for medical transport. But regardless of the fluctuations, being able to keep your business stable during those times will give future buyers the assurance that your transportation charter business is a good investment and buy.
Are bigger businesses worth more?
Generally speaking, yes, the bigger your business is, the more that it is worth. Take a look at the image below, as there is an increase in revenue, your multiple becomes higher, which helps generate a better return on your personal investment.
To help you understand the graph a little better, look at the multiple from 2018 for the valuation price range of $0-250k range, here the average multiple lands right at 2.64, with a total of 1 transportation charter businesses sold, however when you look at the $500-$1 mil range in 2018 your multiple falls to 1.71x, with 1 transportation charter business sold.
What states have the most medical transportation business deals?
Are you wondering where the most deals were made throughout the country, or if your state has a hot market to sell fast? California and Arizona hold the most amount of medical transportation businesses sold, with 8 and 3 sold. But having a business in a smaller state with less sales does not mean that someone isn’t looking to start a business venture in your neck of the woods. Having a broker to help you find a buyer for your transportation charter business no matter what state you are in, can help you successfully sell your business.
Why would you sell in the first place?
When deciding to sell your business, it can become an overwhelming and difficult decision. Your reasons will always be different from the business owner next door. Maybe you are ready to retire, or you are ready to move on to a few venture. Whatever your reason is, be sure that you have the necessary knowledge and tools to get the value out of your business that you are looking for.
How long will it take to sell your medical transportation business?
There is not one set timeline for the sale of any business. The variables of the individual business and terms of the sale will define how long it will take to sell. Do keep in mind that generally speaking, the larger the deal (over $1 million) take longer to sell, over the smaller deal (under $200k) because of the complexity of the business, in addition to the risk of purchasing a company that large for the buyer. And try to remember, that your individual business will always sell at a different pace than other transportation charter businesses, and being patient is an essential part in selling.
What is the process of selling your transportation charter business?
Our step by step process will help you become more confident, when you decide to sell your transportation charter business. Many business owners forget or overlook essential steps in the selling process and sometimes become confused and lost throughout the process. Doing each and everyone one of these steps will help guide you to the maximum profit of the sale of your business. If you have questions or concerns about your business’ value or the process in itself please contact us and we will be happy to help.
Who will buy your business?
Finding a buyer can be frustrating and feel like a never ending search, but finding one is essential for the sale of your business. Tuck that frustration and fear aside because there are many options and possibilities. Buyers can range from first time buyers, experienced entrepreneurs, or private equity companies. No matter what the size or maturity of your business there is a buyer for your business, and we can help you find them.
How should I sell my medical transportation business?
Marketplaces – (under $500k yearly profit)
Smaller business and micro-businesses are usually best sold privately by the owner through forums or classified websites.
To sell your medical transportation business, check out:
Broker/M&A Advisor – ($500k – $10m yearly profit)
Medium sized businesses in the $100k-$20m are best sold through brokers who help with finding buyers, negotiating and structuring the deal. To sell your medical transportation business, check out:
Investment Banks – (Over $10m yearly profit)
Larger businesses are best sold through investment banks or merger and acquisition companies. To sell your medical transportation business, check out:
How much will it cost to sell my medical transportation business?
Generally a business broker will charge 8-12% of the sales price of an medical transportation business including inventory depending on the deal size. Larger deals attract a smaller fee. Below is a range of fees at each deal value level.
- Under $1m – 12%
- $1m -$4m – 10%
- $4m -$10m – 8%
- $10m -$25m – 6%
- $25m + – 4%
After reading this article and understanding the necessary steps and processes that come along with the sale of your transportation charter business, and you’ve decided that selling your business is the right decision, we encourage you to have your transportation charter business valuated by a professional broker, this will ensure that you are receiving maximum value for your business. We understand that your transportation charter business is your everything, and we always keep that in mind, when valuing your business. So when trying to answer that question of what is your business worth, comparing it to the business in the next town over, will not get you the exact answers you seek. When you are ready to take the first step, we will be more than happy to help you find the true value of your business, and can help accelerate the sale, by helping you find the right buyer as well. Feel free to fill out our valuation form and get started right away.