This is the sixth post in the series on Selling Your Assisted Living Facility. You’re reading from the first chapter about Deciding To Sell.
An owner of an assisted living facility was at her wit’s end.
“I’m done!” she informed me one day when she called.
She had reached the limit of her patience when another staff member quit on the same day that a state inspector’s routine visit made her miss an important family event. We had been talking off and on for months and she knew that selling was in her future. Despite her energy, optimism, and capabilities, an accumulation of challenges had simply become too much.
Selling would provide the relief she wanted she thought. There was plenty of equity in her property and she could live comfortably after the sale, at least for a while until she figured out what would come next. And so she listed her assisted living facility for sale. But a sale never closed.
Yes, buyers were interested and some of their bids were acceptable. But the reality of leaving her business and her livelihood made her second guess the whole thing. She decided that it wasn’t time to sell after all, at least not now.
Are You Ready For What Comes Next?
This story isn’t real and it’s not about any single person I worked with as an agent. But it’s a good representation of several sellers that I’ve worked with over the years. For them, selling seemed to be the right thing to do to escape the pressure of small business ownership.
Those would-be sellers came to realize that they weren’t really ready to sell because they didn’t have a clear plan for what would come next. How would they pay their bills when proceeds from the sale ran low? How would they spend their time? Were they ready to retire, or not?
With their hectic schedule and the near-constant demands on their time, they really didn’t slow down to consider what came next. They were solely focused on managing their business and finding someone to buy it. While that focus was important for the tasks at hand, it kept them from preparing for life after the sale. They needed to ask themselves some tough questions.
Some Questions To Ask Yourself
When you started your assisted living facility, you probably created a business plan. As part of the planning process, you needed to answer a long list of questions. When you exit your business, there are also several questions you may want to ask yourself. Here are some of them.
What will you do on Monday to Friday six months after the sale? Most owners of assisted living facilities that I know are active, busy, high-energy people. The days right after their sale closes might be a great time to escape to a beach, a mountain, or a cabin in the woods. Some resting, relaxing, reflecting, and maybe even celebrating may be on their agenda. But within a few weeks or months, they will most likely become restless for something more to do. What will that be for you?
Do you need the same monthly income? If so, how will you replace that income? Owners of assisted living facilities normally draw a paycheck from their business, especially if they are involved in the day-to-day operations. As the owner of the property, they might also receive a monthly check in the form of rent or profits. After a sale, those checks will probably end. How will you replace them? Yes, you will have the cash proceeds from your sale available but will you also be able to generate enough new income to replace your old income? That’s a great question to talk over with a financial advisor so you have an answer before deciding to sell.
What’s a dream or a goal you’ve had for a while? Is it time to chase it? You may have had a dream to buy or build and own your own assisted living facility. Maybe several of them. As you think about selling, it’s good to consider what dream or goal has been on your mind. Like I said above, you are probably the type of person who likes to stay busy. What will that look like for you? Do you want to volunteer in your community? Travel around the world? Start a new business? Write a book? Plans are often flexible and fluid when people sell their business but having a rough draft of your next chapter in life will give you peace of mind, too.
There are many other questions you may ask yourself when you are deciding to sell your business. Talk them over with a close friend, a trusted advisor, or a qualified counselor. It almost always helps to talk through things with another person. Ultimately, the decision to sell is up to you alone but you’ll make that decision more confidently when you’ve answered some tough questions.
Business Planning Is Important When You Exit, Too
I want to be very clear – most owners decide to sell their assisted living facility with a clear plan of what comes next in their life. They’re ready to retire, move away, start a different business, go back to school, or any of a number of things I’ve heard owners tell me they plan to do after the sale. (Some even want to join me as a real estate agent specializing in senior living real estate. If that’s you, let me know.) They have looked at their budget, talked with their financial advisor, and decided they have the resources to fully pursue their plans in the next season of life.
Those owners were prepared for life after the sale. They made a decision to sell. They began the process of selling and then, one day, they made it to closing and moved confidently into their next adventure.
If you’re an assisted living owner thinking about selling, I hope that you find the time to plan what comes next for you. With a plan for what comes next, you’ll have more peace throughout the selling process and especially on closing day.
Have a question or thought about something in this article? Leave a comment below. Thanks.