How to Make Your Domiciliary Care Business More Sellable Over the Next Two Years

How to Make Your Domiciliary Care Business More Sellable Over the Next Two Years

James Dixey — Founder and Managing Director    ·    8 min read    ·    James Dixey Limited

We speak to domiciliary care owners regularly who feel that what their business sells for in 2026 is materially below what they think it should be worth. The answer is rarely to find a different buyer — it's to build a better business in the two years before the sale.

EXECUTIVE SUMMARY

•  Domiciliary care businesses are often worth more than their owners realise, and less than they could be. The gap, in most cases, is fixable over an eighteen- to twenty-four-month preparation window.

•  Five focus areas: reduce reliance on the registered manager (key-person risk); diversify the commissioner book (no single LA above 20% of revenue); focus on CQC trajectory rather than the snapshot rating; implement digital care planning (Care Planner, Birdie, Log my Care); and know what 'good' looks like to a buyer.

•  What buyers consider 'good': net margin above 10% (typical sector range is 6–10%); staff retention above 80%; declining agency dependency; stable or improving CQC trajectory; commissioner spread across 4–5 LAs with no single contract above 20%; and a management team that runs the business without the owner in the room.

•  Most owners hit four of those six. The gap is usually in one or two specific areas, and with two years of focused effort, they are fixable.

Considering selling your domiciliary care business in 2026–2028?

Two years of focused preparation typically lifts a dom care valuation by a meaningful margin — in our experience often 20% or more, though sector and business-specific. A confidential conversation now identifies exactly which items most affect what your business is worth — and where the highest-return work sits.

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1.  Reduce reliance on your registered manager

The registered manager is the single biggest key-person risk in any domiciliary care business. A buyer's diligence team will look hard at three things: how long has the current RM been in post, is there a credible deputy, and what is the documented succession plan if the RM leaves between exchange and completion?

The fix is mechanical but takes time. Document the RM's SOPs across rota planning, care assessments, CQC submissions, training records, safeguarding referrals, and client onboarding. Develop a deputy who can carry the role through a CQC change-of-provider application. By the time you are eighteen months from sale, you should be able to show a buyer that the business runs without the RM in the room for two weeks at a time — and that the documentation is rigorous enough that a new owner could swap RMs without operational disruption.

2.  Diversify your commissioner book

Commissioner concentration is the second-largest risk a buyer prices in. If one local authority accounts for more than 25–30% of your revenue, the buyer either applies a discount or structures an earn-out around the retention of that specific framework contract. Above 40%, we have seen otherwise-clean deals fall through because the concentration risk could not be priced acceptably.

The practical target is a balanced book across four to five commissioners, with no single LA above 20% of revenue. The work to get there is slow — you cannot win new framework contracts overnight — but it is identifiable as a trend in the numbers over eighteen months. Even a modest private-pay book (15–20% of revenue) materially changes the conversation with a buyer, because it diversifies away from LA framework risk altogether.

A school where 60% of placements come from a single local authority is exposed. Buyers will price that risk in. The practical target is no single commissioner above 20%.

3.  Focus on CQC trajectory, not just the snapshot rating

Buyers do not read a CQC rating as a snapshot. They read it as a trajectory. An Outstanding business with one previous inspection at Requires Improvement is genuinely more risky than a Good business with four consecutive inspections at Good. The compounding effect of regulatory stability is real and buyers pay for it.

Practical implications: get on top of any open enforcement actions before you go to market; respond formally to every action plan; embed the corrective actions into your operational rhythm rather than treating them as one-off remediation; and make sure the next scheduled inspection is timed to confirm — not contradict — the trajectory you want to present at sale. A planned inspection three months before going to market can de-risk the entire process.

4.  Implement digital care planning

Five years ago, paper care planning was the norm. Today, digital care planning systems (Care Planner, Birdie, Log my Care are the three market leaders in the UK dom care segment) are increasingly the table-stakes a sophisticated buyer expects to see. Each of these platforms typically costs in the region of £3–6 per service-user per month at scale, and implementation runs three to six months including staff training.

The total cost over twelve to eighteen months is genuinely modest relative to the valuation impact at exit — in our experience, a digital-first business attracts a noticeably wider buyer pool and a faster diligence process than a paper-based one. Buyers' commercial diligence teams can see staff visits as they happen, care plans as they are updated, and audit trails for safeguarding referrals; the data quality alone shifts the diligence conversation from disputed memory to objective evidence.

5.  Know what 'good' looks like to a buyer

Most dom care owners we work with are closer to a buyer's definition of "good" than they think. The six-item scorecard below is what we use to frame the conversation with sellers at the first meeting:

•   Net margin consistently above 10% — typical sector net margins run 6–10%; above 10% is a genuine signal of operational excellence and tends to mark out the strongest performers in the buyer's screening.

•   Staff retention above 80% — domiciliary care has structurally high churn; consistently above 80% is a credible operational signal that the business is being run well at the supervisor and care-worker level.

•   Declining agency dependency — the trend matters more than the absolute number. A business reducing agency use over twelve months reads as well-managed; a business with rising agency use reads as struggling, regardless of the rating.

•   Stable or improving CQC trajectory — see point 3 above.

•   Commissioner spread across 4–5 LAs — with no single contract above 20% of revenue. See point 2 above.

•   Management depth — a credible second-tier layer (operations manager, finance manager, care manager) that runs the business when the owner is not in the room.

Most owners we meet hit four of those six. The gap is usually in one or two specific areas — sometimes commissioner concentration, sometimes RM dependency, occasionally CQC trajectory. The valuable insight from a first conversation is identifying which two are the ones to focus on for your particular business, because they are not the same for every operator.

Why two years

The list above is not a six-month fix. Building a deputy RM, diversifying a commissioner book, embedding a digital care platform, and improving CQC trajectory take eighteen to twenty-four months of consistent operational focus. In our experience, owners who do this work and time their sale process at the end of it see valuation outcomes meaningfully above where they would have transacted without the preparation — often 20% or more for well-run businesses, though outcomes vary. The owners who go to market without doing the work either accept a lower price or — more commonly — withdraw from a process when the diligence reveals what they already knew was weak. Time on the runway is the most valuable asset you have.

Related: What is my care home actually worth? A realistic guide to valuation.  (/guides/what-is-my-care-home-worth)

Eighteen months or more from a possible sale?

A confidential valuation and a structured stress-test against the six-item scorecard tells you which preparation work matters most for your business — and how much it could realistically add at exit.

Get a valuation  →

SOURCES

[1] Care Quality Commission registered-provider framework and inspection trajectory analysis.

James Dixey Limited — Specialist M&A for regulated, owner-managed businesses in Care, Education, Fire & Security and Other Regulated Services.