Business Overview

In only a few short years since inception, this customer embraced substance abuse treatment and recovery program has built significant infrastructure and achieved remarkable results together with its client base. The beachside facility boasts 30+ in-patient beds that are licensed in its 5-6 first class beach community residences. At its pre-COVID peak, the program did $1.7 ml per month between its main facility and its small Northern California based Intensive Outpatient Program (IOP). They typically have a 50-60 person in and out-patient census, with a peak of 72. Together with a nationally recognized Founder & CEO, the opportunity boasts a certified American Board of Addiction Medicine Medical Director and a comprehensive team of seasoned treatment providers and licensed clinicians – some with advanced certification in Incidental Medical Services. There are also 2 State licensed and nationally accredited outpatient facilities and several residential/detox treatment homes.


  • Asking Price: $4,995,000
  • Cash Flow: $2,000,000
  • Gross Revenue: $19,800,000
  • EBITDA: $2,000,000
  • FF&E: N/A
  • Inventory: N/A
  • Inventory Included: N/A
  • Established: N/A

Detailed Information

  • Property Owned or Leased:N/A
  • Property Included:N/A
  • Building Square Footage:7,500
  • Lot Size:N/A
  • Total Number of Employees:85
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

This organization is based in a 7,500 square foot beach adjacent office, a smaller secondary Northern California IOP office, and 5-6 premium residential living facilities in the same beach community. The office leases for $21k/month (varies, based on sublets) on a secure long-term lease with options with an ideal landlord. The business is accredited with the Joint Commission and the California Department of Public Health. They also have the License and Certification with the Department of Health Care Services for Detoxification, Individual Sessions, Group Sessions, Educational Sessions, and Recovery and Treatment Planning. The business was once licensed for 36 beds but currently at 30, with 4 of their 6 sober living houses on long-term leases. They are also permitted / licenses a Residential Treatment Center (RTC), and 3 Intensive Outpatient Programs (IOP). They have 7 Clinical Laboratory Improvement Amendment (CLIA) licenses for diagnostic testing (e.g. urinalysis, etc.).

Is Support & Training Included:

Seller will transistion and train as negotiated.

Purpose For Selling:


Pros and Cons:

While Southern California may be the most competitive market in the recovery program space, this firm has not faced challenges attracting new clients due to its founder’s experience and recognition, couple with the program’s strength and resultant formidable referral pipeline. The program, its infrastructure, in-take and residential living locations provide it a compelling value proposition that competitors find difficult to compete with and impossible to replicate. In a perverse twist, the program’s distinctively non-corporate, edgy appeal that have attracted clients and led to their success in recovery, has likely contributed to them not hitting the profits levels their revenues would suggest. Since they have been able to fill beds without developing strict financial management protocols, comprehensive marketing channels or a predictable sales funnel, the company has prioritized serving patrons over maintaining liquidity and at times, profitability.

Opportunities and Growth:

While the program grew to $50 million in billings after 3 short years since its inception, with just over $20 million in revenues post allowance, the company is not managed by experienced industry veterans with strict financial management protocols. Rather, the enterprise is led by a highly competent and passionate of leaders in the recovery field. Similarly, the client-embraced program has amassed a loyal following that helps ensure a formidable pipeline of new client admissions, but at the expense of achieving an optimal mix of in-patient versus out-patient clients. As a result, beds are filled with lesser services than they are licenses for. Similarly, because they have relied on the referral network that’s kept beds filled they have not developed sales pipeline expertise. Finally, due the program’s reputation and success rate, and its founder’s notoriety and industry recognition, the program may be ideal to become the foundation of a national or international chain once its financial model is perfected.

Additional Info

The company has 85 employees and resides in a building with disclosed square footage of 7,500 sq ft.
The building is leased by the business for $21,000 per Month

Why is the Current Owner Selling The Business?

There are all types of reasons why people decide to sell operating businesses. However, the real factor vs the one they tell you may be 2 totally different things. As an example, they might claim "I have way too many various commitments" or "I am retiring". For lots of sellers, these factors stand. However, for some, these might just be excuses to try to conceal the reality of changing demographics, increased competition, current reduction in earnings, or a range of various other reasons. This is why it is really important that you not rely entirely on a vendor's word, however instead, make use of the vendor's solution along with your total due diligence. This will paint a much more reasonable picture of the business's present situation.

Existing Debts and Future Obligations

If the existing company is in debt, which lots of businesses are, then you will certainly need to consider this when valuating/preparing your offer. Many companies take out loans with the purpose of covering items such as supplies, payroll, accounts payable, etc. Bear in mind that sometimes this can imply that profit margins are too tight. Lots of organisations come under a revolving door of taking on debt as a way to pay back other loans. Along with debts, there may also be future obligations to take into consideration. There might be an outstanding lease on tools or the structure where the business resides. The business might have existing agreements with vendors that should be met or might lead to charges if terminated early.

Understanding the Customer Base, Competition and Area Demographics

Exactly how do operating businesses in the area bring in new consumers? Many times, operating businesses have repeat clients, which develop the core of their everyday earnings. Specific variables such as new competition sprouting up around the area, roadway building and construction, and also employee turnover can impact repeat customers and also negatively impact future incomes. One vital point to consider is the placement of the business. Is it in a very trafficked shopping center, or is it hidden from the highway? Certainly, the more people that see the business often, the better the chance to build a returning consumer base. A final idea is the general location demographics. Is the business located in a largely populated city, or is it located on the outskirts of town? Exactly how might the local average house income effect future income potential?