You’ve dedicated years—perhaps decades—to building your homecare agency. It's an asset you nurtured from the ground up, navigating countless regulations, building a dedicated team, and serving your community. Now, as you contemplate your next chapter, the big question looms: Is it time to sell, and what is my agency truly worth?

Selling your agency is arguably the most significant financial and personal decision you will make. It’s critical to approach this crossroads with clarity and a realistic understanding of the market. Before you engage an advisor or list the business, here is a roadmap to help you navigate this complex journey.

Want to know what your homecare agency is worth? Find out here.

Step 1: Clarify Your "Why" and Define Your Goals

The reason you are considering a sale will dictate your timeline, your priorities, and ultimately, your exit strategy. Be honest about your motivations—it will guide every decision from here forward.

Key Takeaway: You need to know what you need from the sale (financially and personally) to define a successful outcome.

Step 2: Understand Your Agency's Position and Value Drivers

Your perceived value is often different from your market value. The market does not value effort or need; it values transferable, reliable future earnings.

The Core of Valuation: Earnings and Multiples

A professional valuation starts with your core earnings, typically EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) or SDE (Seller’s Discretionary Earnings), multiplied by a factor determined by risk and growth potential.

• Size Matters: Larger agencies (typically $5M+ revenue) command higher multiples (8x–12x+ EBITDA). Smaller, owner-dependent agencies often trade at lower multiples (2x–4x SDE).

• Payer Mix: Revenue from Medicare and Private Pay generally signals better margins and less risk, leading to valuation premiums over Medicaid-heavy mixes.

Factors that Drive Your Multiple Up

Buyers pay a premium for stability and transferability. These factors significantly increase the multiplier applied to your earnings:

• Operational Structure: Agencies with a strong, independent management team are worth dramatically more than those that rely on the owner for daily operations or key client relationships.

• Client Acquisition: Scalable channels—such as strong MCO contracts, organic SEO, or formalized referral networks—are more valuable than revenue derived from the owner's personal contacts.

• Quality Metrics: Strong HHA CAHPS scores and high Medicare Star Ratings signal quality care and reduced regulatory risk.

Factors that Drive Your Multiple Down (Red Flags)

Risk equals discount. These factors will reduce your final offer:

• Owner Dependency: The single biggest devaluer. If you are the business, buyers must price in the cost and risk of replacing you.

• High Client Concentration: Too much revenue coming from a single referral source or contract is a major risk factor.

• Messy Financials: Poor documentation, unreconciled books, or aggressive "owner perks" reduce buyer confidence and slow down due diligence.

Step 3: Confront the Emotional Side of Selling

Selling a business you poured your life into is profoundly emotional. Acknowledging these feelings will help you stay grounded during the process:

• Pride vs. Loss: Celebrate the accomplishment of building a valuable business, but prepare for the grief of letting go of something that felt like an identity.

• Anxiety vs. Relief: The sale process is stressful (due diligence, negotiations), but the relief of handing off the operational stress can be immense.

• Uncertainty: Have a plan for your post-sale life. The transition is easier if you know what fulfilling purpose comes next.

Advice: Seek counsel from trusted advisors or peers who have successfully completed the sale process.

Step 4: Start Preparing Now (Time is Your Ally)

If you are thinking about selling within the next 12 to 24 months, the best time to start preparing is today. Preparation is not just about cleaning up your files; it’s about strategic value creation.

Your Practical Next Steps

Do not wait for a perfect moment—start by gaining clarity on your current position.

1. Get a Baseline Valuation: Obtain a realistic estimate of your agency's value based on its current financial performance and operational risks. This provides the starting line for your exit plan.

2. Define Your Gap: Compare the baseline valuation with the capital you need to achieve your personal and retirement goals.

3. Identify 3 Strategic Levers: Pinpoint the 3 highest-impact, most feasible improvements you can execute in the next 12 months (e.g., building a management depth, cleaning up the P&L, focusing on private pay growth).

Knowledge is power. The sooner you know your number, the more time you have to close the gap and negotiate from a position of strength.