Likely Buyers
- Group practice or health systemWants more patients, more providers and locations that fit its network.
- Private equity backed management companyLooks for practices with steady collections that can join a larger group.
- Associate or fellow clinicianOften wants to buy the practice they work in, with bank or seller financing.
The owner is the product
In a solo practice many patients come for one clinician. Buyers discount that relationship, because it may not follow a new doctor. The more of your revenue ties to you personally, the lower the price.
Associates who treat their own patients make a practice more transferable. So does a long record of patients who return for the office, not only for you.
What buyers check
- Collections by provider, not only total revenue
- The payer mix, including how much comes from a few insurers
- Active patient counts and how often they return
- Staff tenure, pay and who handles billing
- Equipment age, and what is leased or financed
Cash flow and the multiple
Buyers use the same math as other Main Street sales: cash flow after one working owner, times a multiple. Larger practices with managers and associates may be priced on EBITDA, with a market rate doctor deducted.
Records, rules and the transition
Patient records carry legal duties. How records are transferred, stored and kept available after a sale depends on the type of practice and on the licensing board, so have your attorney plan it early.
Buyers also ask for a transition period. Many want a few weeks to several months with the seller introducing patients and referral sources, and you should agree in writing what that includes.
The lease and the location
Exam rooms are hard to move. Buyers read the lease carefully, including renewal terms and landlord consent to a new tenant.
See what to question in a letter of intent before you accept an offer. If your office has a certificate of occupancy question, read the Cleveland occupancy guide, then request a price opinion.