This senior care business in Knoxville immediately caught my attention.
The company has been operating for nearly 20 years, runs on a fully recurring private-pay model, and already has an experienced team in place.
Those are exactly the kinds of characteristics many buyers look for.
The asking price is $950,000 and the business reports approximately $370,000 in annual cash flow.
Running the deal through the BizHub calculator produces some impressive results.
With standard SBA financing, the buyer is left with roughly $234,000 per year after debt payments.
That means a buyer recovers their down payment in about five months.
The debt service coverage ratio comes in at 2.73, which provides a very healthy cushion above typical lender requirements.
The cash flow multiple is only 2.57x compared to an industry average closer to 2.8x.
Unlike many listings we review, this one actually appears reasonably priced.
One thing many buyers do not realize is how lender-friendly this industry tends to be.
The default rate for assisted living and senior care businesses is only 1.54%, compared to 3.62% across all businesses.
That is one of the lowest default rates of any industry we track.
The demographic tailwinds are also hard to ignore.
The aging population continues to grow, and many seniors increasingly prefer receiving care in their homes rather than moving into facilities.
This business also operates on a fully recurring private-pay model, which helps create predictable revenue and reduces dependence on government reimbursement programs.
The number that immediately jumps out is the margin.
This business reports a profit margin of about 21.5%.
The industry average is nearly 66%.
That gap is enormous.
There are really only two possibilities.
Either there is substantial upside available by improving operations, staffing, scheduling, or overhead management.
Or there is something structurally different about this business that permanently limits profitability.
Before making an offer, I would want to understand exactly why the margin is so much lower than comparable businesses.
That answer could completely change how attractive this deal really is.
BizHub scores this deal a 7.7 out of 10.
The recurring revenue is attractive.
The debt coverage is excellent.
The valuation looks reasonable.
And the industry itself has some of the strongest long-term demographic trends you will find.
But before moving forward, I would spend significant time understanding why margins are running so far below industry norms.
That is the question that determines whether this is a good deal or a great one.
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