How to sell my medical practice?

 You might be wondering:

– How much can I sell my medical practice for ? 

– How do I determine an asking price when selling a medical practice? 

– How do I find potential buyers to sell my medical practice?

– How to sell a medical practice through a broker?  

On the last question:  Use a broker when you only need a connection to a buyer (i.e. when selling real estate or stocks).  Instead, use an M&A advisor if you are closing or selling your medical practice because what you need is vastly more complex.  Details on that and more answers are ahead.

Think Years, Not Months

If you’re wondering how I can sell my medical practice and walk away after closing, it isn’t possible.

Much of the value of a medical practice is tied to its owners — to their expertise, reputation, and relationships.  In most successful sales, that value is transferred to a buyer over a multi-year transition during which the seller works 2 to 35 hours per week.  The seller should have a sales- or profit-sharing incentive to complete an effective transition.  Consequently, most medical practices cannot simply be sold for just a fixed payment at closing.  This is especially trueif you want to learn how to sell a private medical practice . It applies to most medical practices to varying degrees, and largely depending on firm size.

Seller Beware: Protect Yourself

Because selling your medical practice entails sharing sales or profit with a buyer you have just met, you need protection.  We recommend the following when closing or selling your medical practice:

(1) List the adverse outcomes that can occur.  For each, design a resolution mechanism that protects your assets.

(2) List the possible disputes that can arise between you and your buyer.  For each, implement a binding procedure for resolving the dispute fairly and at a low cost, ideally without involving courts or lawyers.

Deep expertise in designing protection mechanisms matters.  (Hint: We are exceptional at it, as a leader in selling medical practices.)  Lawyers will draft the legal language that implements protections in a contract, but only a capable advisor can design protection mechanisms.  Proper protection design requires economics and finance expertise, not legal expertise.

Sell by Auction or Not?

You might be seeking an exit strategy for medical practices.

Did you know you can sell your medical practice via an auction?  If you are like other medical professionals and have a strong preference for orderliness, then an auction can be perfect for you.  

The first step in medical practice selling is selecting one of two sale mechanisms:

Option 1: Auction Mechanism

If you wonder “how do I sell my medical practice for maximum price,” look here:

There are several differences between the auctions we see in movies and an auction mechanism for medical practice selling.  Here are a couple, amongst the best ways to a sell medical practice through an auction:

(1) Bids will entail several numbers in addition to purchase price.  For example, the percent of the price paid through a multi-year seller note and your compensation during the transition period are two other numbers that could be included in a bid.

(2) The winning bidder will be selected based on a valuation formula that calculates how much each bid is worth to you.

(3) The bidders will not be aware of each other’s bids.

What are the benefits of selling my medical practice via auction?  

(1) If we have at least two bidders, then an auction will generate more value for you than an ad hoc mechanism.  This increases the value of how much you can sell a medical practice for.

(2) The business is more likely to end up in the hands of the right person.

(3) The high amount of structure required for an auction forces everyone to produce and act upon a high degree of clarity early in the process.  This reduces the likelihood of the deal falling through late in the process.

What are the disadvantages if I sell my medical practice via auction?

(1) There is somewhat more work to do upfront:  (a) Closing documents need to be generated upfront rather than late in the process.  (b) We need to decide upfront on precisely how you would value different possible deal structures.

(2) You have less flexibility.  Once you have executed an auction agreement with the prospective acquirers, you cannot back out of it.

Option 2: Ad Hoc Mechanism

If you’re thinking, “I want to sell my medical practice the old fashioned way, and an auction sounds too complex,” look here:

In this mechanism, we negotiate with each prospective buyer one-on-one.  If you like what someone offers, you move forward with them.  If you are uncertain about their offer, we ask them to wait until we have more offers. 

What are the benefits of selling my medical practice via ad hoc mechanism?  

(1) Less work is required before engaging prospective buyers.

(2) You commit practically nothing to the acquirer until final closing documents are signed, which is relatively late in the process.  This implies that you are free to change your mind until then.

What are the disadvantages if I sell my medical practice this way?

(1) If you ask a prospective buyer to wait until you have fielded more offers, you risk losing them because they might find another opportunity.

(2) The best prospective buyer might drive a hard bargain, offering too little.  A less qualified prospective buyer might not drive such a hard bargain.  As a result, you might go forward with the less qualified buyer.  It is important that we find the best buyer because everyone wins when that is the case. This is why we are amongst the best amongst the companies that sell medical practices.

(3) Because this is a less structured process, with less agreed upon upfront, it is more likely that the deal will fall apart after a non-binding offer is accepted.  This can result in significant lost time, money, and energy.

Optimal Deal Structure

If an owner commanded, “Sell my medical practice for the highest possible price!” then I would say, “Be careful what you wish for.  You probably wouldn’t sell at a price of $10 million paid over 100 years with a 0.1% interest rate.”

The correct mandate is, “Sell my medical practice under a deal structure that maximizes the net present value of my future cash flows, considering expected and worst case scenarios, and that allows me to exit comfortably on my realistic timeline.”

Deal structure is the set of terms in your sale contract that affect the timing, contingencies, and amount of payments you receive.

In the medical industry, successful firms have long-term clients for which they perform annual services related to audits, taxes, and financial reporting.  It can be sensible for some of your payment to be tied to the retention of these long-term clients.

If you are open to a broader array of deal terms, you will have a larger pool of prospective acquirers.  That translates to extracting more value out of your firm.  For example, if a handful of medical clients comprise a large portion of your services revenue, then it will be difficult to attract buyers without tying part of your sale price to the retention of those big clients.

How much do medical practices sell for?

The deal structure is equally as important as the purchase price.  If you want to sell your medical practice, you can value it in two ways:

(1) Discounted cash flow method We will analyze your current client relationships and marketing mechanisms.  Based on that, we will project your revenue in future years under a best case, worst case, and expected case scenario.  We will project your costs and expenses given their current levels.  This will allow us to project your firm’s operating cash flows under each scenario.  We will then sum up the values of each future year’s operating cash flow, discounting it by dividing it by (1+r)^number of years in the future.  We will determine the value of r by analyzing the volatility of your historic cash flows relative to historic stock market performance.

(2) Comparables method.  We have data on past sales of medical practices.  Using comparable sales data, we will infer the value of your firm.  For example, we know that the median medical practice firm sold for 1.55 times the seller’s discretionary earnings.  That is low.  Using the optimal deal structure and selling mechanism, we can achieve a higher valuation than that.

What are the steps to sell my medical practice?

Several of these steps occur in parallel:

(1) Consultation.  If you contact us at or 407-256-1482, we will provide more information tailored to your medical practice regarding everything on this page.  From this conversation, you will understand all your options; for example, ‘’how to sell a solo medical practice’’ or ‘’selling medical practice to private equity’’.

(2) Valuation We will conduct a valuation by the above methods.  If you wish to sell your medical practice via an auction mechanism, we will develop a model enabling us to value every acceptable deal structure.

(3) Materials Preparation.  We will prepare a 50-page memorandum, 2-pager, and brief messaging that we will use to convey the opportunity of buying your medical practice.  If you wish to sell via auction, we will work with our economical attorney or yours to develop the auction and closing documents.

(4) Targeting.  We will determine the criteria for the companies and individuals that would be suitable acquirers of your medical practice.  Criteria can involve size, geography, specialty, years of experience, and more.

(5) Outreach.  We will contact buyers in several different ways, including contacting some of the 28,000 buyers in our network, sending direct messages to other individuals and companies who meet your criteria, and online advertisement on business for sale websites and professional job boards.  We will only introduce you to the most qualified prospects.

(6) Negotiation We receive offers, improve them, and work to pick the best one.  If we are using an auction, negotiation is automatic.

(7) Due Diligence and Closing.  The winning bidder conducts due diligence on your medical practice.  If we are using an ad hoc mechanism, then in parallel their attorney produces closing documents.  Once all of that is concluded, the deal is closed.

(8) Post-Closing.  We will be available to help make your medical practice sale successful.  We can create accounting dashboards that calculate the payments you are owed.  We are also available to act as administrators in any dispute resolution process described under the “Seller Beware: Protect Yourself” section.

Examples of medical practice listings

For you to get a sense of what is on the market, here are some recent listings:

Asking Price: $1,500,000
Cash Flow: $400,000
Price Multiple: 3.8x
Revenue: $750,000
Employees: 4
This company specializes in treating personal injuries and helping clients involved in motor vehicle accidents. They treat their client’s soft tissue injuries by providing physical therapy services, including moist hot packs, electrical stimulation, ultrasound and massage therapy. One of their Unique Selling Propositions is that their therapy is monitored and attended to by onsite physicians.

Asking Price: $398,322
Cash Flow: $321,086
Price Multiple: 1.2x
Revenue: $682,551
Employees: 5
This Practice is a Lender Pre Qualified Primary Care, Pain Management, and Addiction/Suboxone Treatment Center. Established in 2008, this is a full spectrum family medical practice and addiction clinic with a very loyal patient base of over 5300 patients on file composed of many different ethnicities. Marketing is currently limited to only word of mouth and social media channels.

Asking Price: $399,000
Cash Flow: $397,350
Price Multiple: 1.0x
Revenue: $591,066
Employees: 3
A rare opportunity to acquire an established, turnkey neurology practice in the San Fernando Valley! This thriving and profitable practice has a prime location, situated between two hospitals, with little competition. The practice provides consultation, treatment and services that are in high demand within a growing patient population. Furthermore, the practice receives patient referrals from Ventura County, Orange County and throughout the San Fernando Valley and West Side Los Angeles in addition to its established base of patients.

Asking Price: $350,000
Cash Flow: N/A
Price Multiple: N/A
Revenue: $346,000
Employees: 0
This pediatric practice provides comprehensive medical care from newborn to adolescent. Pediatricians act as preventative care providers serving as the first point of contact for well and sick patients.

Asking Price: $1,100,000
Cash Flow: $351,110
Price Multiple: 3.1x
Revenue: $896,407
Employees: 10
This medical facility has served as a workers’ compensation rehabilitation facility treating patients with injuries for 70 years! This facility has provided patients with remarkable results, a renewed sense of well-being, renewed hope and optimism, along with increased function. Their goal has always been to rehabilitate injured patients, reduce functional impairment and return the patient to normal physical activity and normal activities of daily living as soon as possible.

Asking Price: $495,000
Cash Flow: $201,623
Price Multiple: 2.5x
Revenue: $809,653
Employees: 7
Existing 16-year Physical Therapy Practice and Rehabilitation Center located on the Gulf Coast. This is the only multi-specialty rehabilitation center that has a clinic and does in-home therapy in the area. If you’re looking to relocate to be near the Gulf Coast beaches, venture out on your own, or add to your existing practice, this business should be at the top of your list.

We make selling medical practices easy and lucrative

At Next Bridge Advisors, we sell medical practices and other professional services firms anywhere in the United States.

Having been established for 13 years, we have built a network of 28,000 buyers and a unique combination of expertise in the finance, marketing, structuring, and dispute prevention aspects of business sales.  

Email us at or learn how to maximize your earnings from selling an accountancy practice.