How to Sell Your Home Care Business in 2026

SDE: The Number That Determines Your Price

Home care businesses are valued on Seller's Discretionary Earnings (SDE), your total profit plus your salary and any personal expenses running through the business. A buyer multiplies your SDE by a number (the 'multiple') to get your business value.

Common add-backs for home care owners: your salary above what a replacement manager would cost, personal car expenses, family members on payroll who don't need to be there, excess management fees, personal cell phone, and health insurance premiums.

Simple example: If your home care agency makes $180,000 in annual SDE and sells at a 3.2x multiple, it's worth about $576,000.

Our free valuation calculator figures out your SDE and gives you a range in about 5 minutes. No email required.

What Drives Your Value Up

• High private pay mix (60%+ of revenue), This is the #1 value driver for home care. Private pay means higher margins, no billing delays, no government rate cuts, and simpler operations. Agencies with 60%+ private pay get premium multiples.
• Low caregiver turnover rate, Home care has some of the highest turnover in any industry. If your turnover is below 50%, that is a major selling point. Buyers know that replacing caregivers is expensive and risky.
• W-2 workforce model, Agencies that use W-2 employees (not 1099 contractors) are valued higher. W-2 models reduce legal risk, give you more control over quality, and are what sophisticated buyers expect.
• Stable or growing client census, A steady or growing number of active clients with consistent weekly hours shows buyers that the business is healthy and not dependent on a few big cases.
• Medicaid waiver contracts as recurring revenue, If you have Medicaid waiver contracts, they act like recurring revenue. The state sends clients to you on an ongoing basis. Buyers love this predictability.
• Documented systems and training programs, Written SOPs for hiring, training, scheduling, and billing tell buyers the business can run without you. A formal caregiver training program is a big plus.

What Hurts Your Value

• High caregiver turnover (above 60-70%), signals instability and ongoing recruiting costs
• 1099-heavy workforce, creates legal liability and reduces buyer confidence
• Medicaid-only payer mix, lower margins, government rate risk, billing complexity
• Declining client census or shrinking weekly hours
• Owner doing daily scheduling, caregiving, or on-call shifts
• No documented processes, everything lives in the owner's head

1. Find Out What It's Worth

Start with our free valuation calculator. It takes about 5 minutes and gives you a range based on your revenue, profit, payer mix, and workforce model. No email, no phone call, just your number.

2. Get Your Financials in Order

Buyers will want to see clean, detailed financials. Pull together your profit and loss statements for the last 2-3 years, broken out by month. Separate your personal expenses from business expenses. Calculate your true SDE with all add-backs clearly documented.

If you have Medicaid billing, make sure your claims are reconciled and your denial rate is low. Buyers will scrutinize Medicaid revenue more closely than private pay.

3. Stabilize Your Operations

The number one thing that kills home care deals is caregiver instability. Before you go to market, make sure your team is solid. Reduce turnover, fill open shifts, and make sure your scheduling is running smoothly without you doing it personally. Document your hiring process, training program, and daily operations.

4. Go to Market Confidentially

Your broker lists the business without revealing your name, location, or client details. Interested buyers sign an NDA and prove they have the money before they learn anything about your agency. This protects your caregivers, clients, and referral relationships.

5. Negotiate and Accept an Offer

Serious buyers submit a Letter of Intent (LOI) with the price, terms, and timeline. Your broker negotiates on your behalf. Most home care deals include some transition support, usually 60-90 days where you help the buyer meet clients, introduce referral sources, and train on your systems.

6. Due Diligence and Close

The buyer verifies your financials, reviews caregiver files, checks your license status, and confirms your client census. This takes 30-60 days. Then you transfer the business, hand over the keys, and get paid. Most sellers receive 70-90% of the price at closing, with the rest held in a short escrow or earned through a transition period.