Do you plan on selling your PT practice in the next 2-5 years?
If so, you’re not alone.
There has been an increase of PT/OT/SLP ‘sgetting out of the ownership business.
Whether you’ve been in practice for 20+ years or less than 10 years, owners are looking to cash out.
I believe what is sparking this rise is how difficult it has become to turn a profit…not mention to enjoy some sort of personal life besides working.
And if you combine that with the influx of venture capital money that has flooded the allied health market, you have a large number of owners getting out of business ownership.
The problem is that the majority of small private practice owners, from what I have seen, are NOT getting the amount of money they hoped they would causing them to stay onboard for years with the purchasing company or having to go back to work since they don’t have enough to retire on.
I know, because I have worked with hundreds of private practice owners over the past 10 years and have been involved in dozens of sales (not to mention the sale of my own PT practice in 2016).
Owners who are offered the best deals in terms of cash offers and post buyout agreement have several things in common.
Here are TWO key elements to prepare your practice for sale:
- PROFIT – the owners who were offered multi-million dollar deals had a healthy “bottomline”. Out of the 17 practices, only 1 had a profit margin below 20%. The other 16 were at or above 20%. This correlated to a high EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) and was a significant factor in determining the offer. Most buyers want to see 12-24 months of consistent revenue. They want to make sure that your profits are consistent with referrals, new patients, visits, revenue/visit, and other key metrics.
- SOPHISTICATION – this is how well the business is run and the type of management team that is in place. This is where Practice Freedom U® is far and above anyone else in the coaching industry. The better organized a business, the higher the profit margins and the less the owner is involved in the day to day administrative aspects of the business. The more “systems oriented” a business, the less risky it is to the buyer and the more they will pay.
(Note: there are several other factors involved in the sale of a practice, but I believe these two are the most important.)
And here’s what you get when you incorporate these elements well:
–> When you have a business with high profit margins, you can enjoy the fruits of your labor right now! No need to wait to cash-in.
–> When you have a business that runs like a well-oiled machine with a solid team, YOU get to enjoy life NOW, because you the time and freedom to do it!
If you’re considering selling your practice in the next 2-5 years, I recommend you start by setting up a call with me to discuss your Exit Practice Strategy.
The call is free and it will help you get clear on the areas you need to focus on in order to get the most out of selling your practice in the next 2-5 years.
Want business coaching? Join the hundreds of practice owners who are building the business of their dreams using Practice Freedom U’s proven program. Take a step towards creating a business that sets you free by scheduling a Discovery Call with me HERE