Selling your integrated Speech and Occupational Therapy practice in Chicago is a significant decision. You’ve built a valuable asset that serves a growing need in the community. This guide provides insight into the current market, what drives your practice’s value, and how to navigate the sale process. Understanding these key areas is the first step toward a successful and rewarding transition, ensuring you realize the full value of your hard work.
Market Overview
The timing for considering a sale of your therapy practice is strong. The market is supported by powerful tailwinds, but success in a competitive city like Chicago requires a clear understanding of the landscape.
National Demand is Soaring
Across the country, the need for therapy services is increasing dramatically. Projections show employment for speech-language pathologists growing 18% and occupational therapists 11% over the next decade. This is not a small trend. The entire therapy market is expected to nearly double by 2032, driven by powerful demographic and healthcare trends. This national demand creates a very attractive environment for potential buyers looking to enter or expand in the field.
The Chicago Context
While national growth is high, a major metropolitan area like Chicago naturally has more competition. This is not a reason for concern. It is a reason for preparation. Buyers in a competitive market look for well-run, professionalized practices that stand out. They are not just buying a client list. They are buying an efficient, defensible business.
Your Integration Advantage
Your practice’s integrated model, combining both Speech and Occupational therapy, is a significant asset. Buyers, especially larger groups and private equity, are actively seeking practices that offer comprehensive care. This model reduces their risk, broadens the patient base, and creates operational efficiencies they find highly attractive. This is a key part of your story that needs to be highlighted.
Key Considerations Before a Sale
A buyer’s perspective is different from an owner’s. They look past the day-to-day successes to analyze the underlying health and risk of the business. You should be prepared for them to look closely at your financial records, seeking clean, transparent Profit & Loss statements. They will also assess your team. A practice that can run smoothly without being entirely dependent on the owner is far more valuable. Finally, your physical location and lease terms in a city like Chicago are critical. A long-term, favorable lease in a good location can significantly increase buyer confidence and, ultimately, your practice’s value. Getting these elements in order before you go to market is not just a suggestion. It is fundamental to a successful sale.
A comprehensive valuation is the foundation of a successful practice transition strategy.
Understanding Market Activity
The Chicago market is active with different types of buyers, and each comes to the table with unique goals. Knowing who you are selling to can change the entire dynamic of a negotiation, from the price to the post-sale terms. The “right” buyer depends entirely on your personal and financial objectives. We find it helpful to think about them in a few main categories.
| Buyer Type | Primary Motivation | What This Means for You |
|---|---|---|
| Another Practitioner | Buying a job and a patient base. | Often a simpler transaction, but may have limited access to capital. |
| Local Competitor | Gaining market share and geographic reach. | May pay a premium for strategic fit, but culture integration is key. |
| Private Equity Group | Building a regional or national platform. | Offers the highest valuations and potential for a “second bite” via equity rollover, but the process is more demanding. |
Understanding these motivations is the first step. The next is running a process that can attract the best of each type, creating a competitive environment that works in your favor.
The Sale Process Unpacked
Selling your practice is not a single event. It is a multi-stage process that requires careful management from day one. It begins with deep preparation and valuation to understand what you have and what it is worth. Then, we move to confidentially marketing the opportunity to a curated list of qualified buyers. This is followed by negotiation, due diligence, and finally, the legal closing. Protecting confidentiality at every step is a top priority to avoid unsettling your staff or patients. It is a time-intensive journey. Partnering with an advisor is not about outsourcing the decision. It is about outsourcing the work, so you can continue to run your practice effectively while we manage the complex sale process in the background.
The due diligence process is where many practice sales encounter unexpected challenges.
What Is Your Practice Really Worth?
Many owners think valuation is just a multiple of revenue. While that is a simple metric, sophisticated buyers do not use it. They value your practice based on its profitability and future cash flow, which is best measured by Adjusted EBITDA. This is your Earnings Before Interest, Taxes, Depreciation, and Amortization, but “adjusted” to add back personal expenses or one-time costs to show the practice’s true earning power. A higher, cleaner Adjusted EBITDA leads to a higher valuation. However, the multiple applied to that number is just as important.
Here are 4 things buyers look at to determine the right multiple:
- Staff & Systems: How much does the practice depend on you, the owner? Practices with a strong clinical team and efficient IT systems command higher multiples.
- Revenue Quality: Is your income diversified? Over-reliance on a single referral source or insurance carrier is seen as a risk that lowers the multiple.
- Growth Story: Are you growing? Buyers pay a premium for a clear path to future growth, whether it is through adding services, new locations, or other initiatives.
- Market Position: What is your reputation in the Chicago area? A strong brand and a defensible position against competitors add significant value.
Planning for Life After the Sale
The day the deal closes is a beginning, not an end. A successful transition plan considers what happens next for you, your team, and your legacy. Will you stay on for a period? How will your key staff be retained and incentivized by the new owner? These questions are part of the negotiation. The structure of your deal also has massive tax implications. Furthermore, many modern deals include an equity rollover, where you retain a stake in the larger new company. This provides a potential “second bite of the apple” that can be more lucrative than the initial sale. Thinking through these post-sale considerations from the start is what separates a good deal from a great one.
The right exit approach depends on your personal and financial objectives.
Frequently Asked Questions
What makes selling an integrated Speech and Occupational Therapy practice in Chicago unique compared to other markets?
Selling in Chicago involves navigating a competitive metropolitan market where buyers seek well-run, professional practices with operational efficiencies and a defensible business model. The local context demands preparation, focusing on strong clinical teams, transparent financials, and favorable leases to stand out.
How does the integrated model of combining Speech and Occupational Therapy services impact the value of the practice?
The integrated model is a significant asset as it offers comprehensive care, reduces buyer risk, broadens patient base, and creates operational efficiencies. This model is particularly attractive to larger groups and private equity buyers who are actively seeking practices with such integration.
What are the key financial metrics buyers focus on when valuing a Speech and Occupational Therapy practice?
Buyers primarily value the practice based on its profitability and future cash flow, measured by Adjusted EBITDA. This includes earnings before interests, taxes, depreciation, and amortization, adjusted to remove personal or one-time expenses. A higher and cleaner Adjusted EBITDA leads to a higher valuation.
Who are the typical buyers for a Speech and Occupational Therapy practice in Chicago and what are their motivations?
Typical buyers include another practitioner seeking a job and patient base, local competitors aiming for market share and geographic reach, and private equity groups building regional or national platforms. Each buyer type has distinct motivations impacting price and negotiation dynamics.
What should a practice owner consider about post-sale planning when selling their therapy practice?
Owners should consider their role after the sale, staff retention and incentives, deal structure impacts including tax implications, and possibilities like equity rollover for ongoing stake in the new company. Post-sale planning is crucial for a smooth transition and maximizing long-term benefits.