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Strategies for selling a DME business

On Behalf of | Sep 17, 2019 | Buying & Selling Businesses |

Some baby boomers in North Carolina and other states built their wealth with businesses that sell durable medical equipment, or DME, and as they enter retirement, they will be looking for ways to sell these businesses. Unfortunately, research shows that there will be far fewer buyers for these businesses than sellers. The Small Business Administration reports that about two-thirds of boomer-owned businesses won’t be able to find buyers. There are, however, several strategies that can help these owners improve their chances of making a sale.

A smart move for some small businesses is to try and arrange a strategic acquisition. This is when a DME competitor or complementary business increases its market share by acquiring the company. Only the fastest growing and most profitable businesses will likely be chosen for acquisition. Another choice is to arrange a fire sale acquisition. This is when a business with relatively weak profits and growth is sold below market value in order to incentivize the acquisition.

Another popular option for many boomers is to pass on their DME business to their children or grandchildren. This could involve selling all the business stock to the successor or keeping the stock and merely handing over ownership responsibilities. If potential successors don’t want to take over the business and there are no other options for sale, it may be the best idea to just close the business and sell off the assets.

When a boomer or someone from a younger generation wants to buy or sell a business, it may be beneficial to obtain representation from a qualified attorney. A lawyer with a history of assisting clients with buying and selling businesses may offer the resources and information to help protect their client from risks. They might draft and evaluate documents, negotiate terms and handle any disputes that may arise.