should i buy the following businesses?

December 29, 2021

by a searcher from University of Melbourne in Launceston TAS, Australia

broker brings me deal. 7 year old home health business. breaks even every year. vendor too busy with other job. has potential profit if permanent staff are converted to casual. has never made a profit, even pre-covid. license comes with sale. business has 250k liabilities, vendor wants 500k (vendor will clear debts on settlement). if my board sees potential in making a profit from day one if we convert permanent staff to casual. am i wasting my time?

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Reply by a searcher
from Texas Christian University in Dallas, TX, USA

Sold quite a few home health businesses during my banking tenure and have looked at some since. You definitely need some level of industry knowledge (or find an operating partner you trust who does). As others have said; turnover can be a real challenge, so look hard at the current employee base and evaluate your ability to find replacements. Can't speak for Australia, but in the US, the payor mix is really important; private pay and Medicare are ideal, Medicaid can be a real hassle and inhibit profitability. Overall point being that experience is necessary.

Reply by a professional
from University of Kentucky in Dallas, TX, USA

Remember the following about the HH industry. Your competitors are NOT other HH agencies. Its another company who will pay more per hour with benefits, and other perks. For example, Home Health workers leave to go into another industry entirely most of the time. Example, Amazon.... so converting from permanent to casual will put you back into the War for Talent, and given the fact there are 14 million jobs unfilled at the current moment this will be problematic for you.

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