Welcome Back!

As the green hues of St. Patrick's Day beckon, we're glad to catch you in high spirits before the big weekend rolls in. Hopefully while you're still feeling sprightly before indulging in that time-honoured tradition of green beer. 🤢 

Today we are diving into what makes Mental Health and Substance Abuse Centres so integral to our society, and why their doors – both physical and virtual – are wide open to opportunity, growth, and the kind of investment that truly makes a difference.

Grab yourself a Shamrock Shake and let’s jump in!

Ready to get your books tax-season-ready? Connect with Jenn and transform your books to save yourself time and money this tax-season.

INDUSTRY BREAKDOWN

The Mental Health & Substance Abuse Centres in Canada - A Mindful Investment?

Venturing into the world of Mental Health & Substance Abuse Centres in Canada is not just a business move, it's a leap into a realm of profound social impact and potential financial gain.

Now, more than ever, the focus on mental health and substance abuse is not just a fleeting trend, but a societal necessity, echoing through the corridors of Canadian communities. Is this a good industry to step into at present? Well, let's just say it's more than just a matter of dollars and cents! 🧠

Industry Trends

Let's chat about trends, shall we? Picture a snowball, except it's not made of snow but of increased awareness, compassion, and need for mental health and substance abuse services – and it's been rolling downhill since COVID-19 hit. The pandemic wasn't picky; it left a mark on everyone, amplifying stress and uncertainty. Now, we're seeing a call for help louder than ever, not just from adults navigating mid-life challenges but also from our youths and seniors, with each group grappling with their unique pandemic aftermath. The wave of necessity has led to innovation, with virtual counseling and e-therapies becoming household terms. 🌐

Couple this growing demand with technological advancements; we’re seeing a new dawn in treatment methods. Telemedicine and online counseling services are no longer the future - they’re the now. This digital leap bridges the gap for those in remote areas or with mobility challenges, ensuring that help is just a click away. This isn’t just growth; it’s a revolution in accessibility and convenience, a stark contrast to the traditional, more daunting face-to-face consultation. 💻🔗

The Finances 

The financial landscape of this industry is, in a word, promising. The mental health sector is witnessing an era of growth, and with good reason. Governmental funding is up, private investments are flowing, and the public is prioritizing mental wellness like it's the latest trend – except this trend has depth, longevity, and most importantly, it saves lives.

As we can see, even the pre-COVID-19 landscape had revealed the cracks in our collective mental health, and these support centres are the frontlines in the battle for betterment. The pandemic has undoubtedly exacerbated these issues, swelling the numbers of those in need and underscoring the indispensable role of mental health services. In these times, mental health centres are more than just pillars of support; they are engines of the economy. By fostering the wellbeing of individuals, they in turn stimulate productivity, reduce healthcare costs, and promote a healthier workforce. ❤️‍🩹

In the current climate, investing in mental health centres is investing in the very foundation of a robust economy. From our kids, who are navigating an ever-complex social landscape, to our seniors, who face their own unique set of challenges, mental health resources have emerged as a universal necessity. The value of these services transcends age, gender, and socio-economic status, making mental health centres not just a good investment, but a vital one for the resilience and prosperity of our society as a whole.

Buy or Bust?

In the currency of care, mental health centres are witnessing a bullish run. The industry isn't just growing; it's thriving, fueled by an increased societal demand for mental health and substance abuse services. The numbers speak volumes: investment in mental health services is expected to rise, with government budgets and private funding following the upward trajectory of public need. This means that entering the industry now offers the potential for solid returns, as well as scalability as the sector continues to mature. 📈

For the savvy investor, this isn't just a market gap; it's a societal shift towards prioritizing mental wellness. If you're considering buying into this industry, you're looking at a future where your business growth aligns with a critical community service. Expect to engage with a sector where empathy meets economics, and where the returns measure both in financial gain and societal impact. The forecast for those joining this industry? A challenging yet rewarding venture, with the possibility of both personal fulfillment and a robust financial portfolio.

Diving into the Mental Health & Substance Abuse Centres industry in Canada is more than a sound business decision; it's a chance to make a tangible difference in people’s lives. With its growing trend, governmental support, and financial potential, this industry is not just a good investment; it’s a vital one. 🌟🤝

Check out current opportunities in Mental Health & Substance Abuse:

1. Well Established and Profitable Counseling Clinic in British Columbia - $375,000

2. Stabilized Behavioral Health Operation in Greater Seattle, Washington - $5,750,000

3. Profitable Mental Health Counseling Clinic in Harris County, Texas - $499,013

Interested in a particular industry? Reply to this email with the industry you are curious about and keep your eyes peeled in upcoming issues. 👀 

DEAL REVIEW

Integrated Health and Wellness Clinic

This week’s deal is an Established Addiction and Mental Health Company in Calgary, Alberta. 

Deal Facts 🔥

Green Flags 🟢

• Niche Market Positioning: The business has built a niche within the world of addiction and mental health treatment by focusing on higher income individuals. 

• Strong Client Retention and Referrals: High client retention rates and strong word-of-mouth referrals suggest a robust reputation and client satisfaction, critical for long-term success in healthcare services.

• Comprehensive Multidisciplinary Team: Having a diverse team including nurses, physicians, psychologists, and social workers allows for a wide range of services and a comprehensive approach to health and wellness.

• Established Business with Longevity: Being in operation since 1999, the company has a long-standing presence in the market.

• Opportunity for Expansion: With a strong foundation, there is potential for scaling the business provincially, nationally, and internationally.

Red Flags 🔴

• Valuation Multiple: The first thing that will jump out to buyers is the fact this deal has a high multiple of SDE and EBITDA. 

• Dependence on Specific Market Segment: The focus on higher-income professionals might limit market scope and pose risks during economic downturns that affect this demographic.

• Facility Ownership and Size: The complications arising from the facility being an owner-operated strata unit, and its size, could impact scalability and operational flexibility.

• Regulatory and Industry Changes: Being in the health and wellness industry, any changes in regulations or market trends could significantly impact the business.

• Client Retention Dependency: While high client retention is positive, it also means new client acquisition might be a challenge, requiring effective marketing strategies.

Watch Our Video Breakdown 

For a more in-depth analysis, check out this video deep dive of the deal by our Founder, Morgan Tate:

Possible Deal Structure: This deal will all come down to deal structure. Based on the high asking price multiple if I were advising a buyer I would explore a multi-year earn-out where they would pay a low entry multiple (based on today’s SDE/EBITDA) with a 2-3 earn-out period where the existing owners could earn a ‘bonus’ payment by reassessing the business valuation based on the future SDE/EBITDA. 

This gives you downside protection if the business is already operating capacity, but lots of upside (and motivation for the owners to assist) in helping you scale the business across the country. 

Last time, 40% of you thought this Moving Company peaked your interest! 🌶️🌶️🌶️

Want to learn more about this deal? Reply to this email with a “send me more details” and we will connect you with the broker!

BROKERAGE FEATURE

Sprint Business Brokers is Canada's virtual option for selling owner/operated businesses valued at less than $500,000. Providing a fully brokered experience, Sprint helps clients find a buyer for their business through a process that has been refined through decades of experience.

Check out all of Sprint Business Brokers current listings here!

Want to see your brokerage featured in the next Mainstreet Memo? 😎 Reply to this email and we can discuss opportunities!

ADVERTISE

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SMB TWEET HIGHLIGHT

Sexy businesses don’t = profitable! 🤷 

This is one of the reasons we came up with this newsletter. There are thousands of Baby Boomer’s retiring every single day and over 40% of small businesses are owned by them. That means there are countless businesses that are popping into the market each day!

BUT because most Millennials don’t want to inherent their parents HVAC company and would rather have a SaaS tech start-up, these “boring businesses” will be listed on businesses for sale sites. Yet what people forget when they are thinking up their next idea for a business that is going to “break into the market”, is that we need these unsexy businesses to run the world. People will always need plumbers, landscapers, delivery drivers, car washes, etc., they don’t need a 1000th email service provider. 🙄

TLDR: It is not a myth that boring businesses make money. Sure, you might be a groundbreaking inventor and have a billion dollar idea some day… but there can only be one Mark Zuckerberg.

GOOD READS

Recommended Resources 📚

Below is a list of articles, books, and other resource we recommend for buyers or operators of small businesses!

1. Did you know that 40% of all businesses in the US are women-led? These 1.3 million enterprises had an estimated $2.1 TRILLION in receipts… that being said, female entrepreneurs ask for and receive lower amounts of funding then men do. In honour of March being Women’s History Month, BizBuySell put out a list of Small Business Grants and Resources for Women-Owned Businesses that you should definitely check out.

2. When looking to purchase a business, ever wonder what the differences between owning and operating a small to medium sized business are? Check out this podcast episode from expert Jon Helm’s, Wealth Connection, to find out! 

3. Sometimes buying a business can feel like searching through dating profiles… Just like dating, you have to make sure you are identifying the right business to buy, not just the prettiest on the outside. Here is a guide on How To Identify The Right Business To Buy so you aren’t swiping left forever.

THANK YOU

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See you next time!