Selling your integrated Speech and Occupational Therapy practice is one of the most significant decisions you will make. The Washington market presents a unique opportunity, but capitalizing on it requires more than just good timing. Success depends on strategic preparation, a clear understanding of your practice’s true value, and a plan to navigate the process. This guide provides key insights to help you begin that journey with confidence.
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Market Overview
The demand for integrated pediatric therapy services in Washington is robust. We see practices with strong community reputations and solid referral pipelines from pediatric and family medicine groups. It is not uncommon for well-run S&OT clinics to have long waiting lists, with new patient inquiries coming in weekly. This high demand creates a favorable environment for practice owners considering a sale. Buyers, from solo practitioners looking to expand to larger strategic groups, are actively searching for established, turnkey operations. This climate means you are not just selling a business. You are selling a solution to a clear and present need in the community, which is a powerful position to be in. The key is translating that demand into maximum value during a transaction.
Key Considerations
When preparing to sell your practice, a few factors are particularly important in Washington. Thinking through these areas in advance can make the entire process smoother and more profitable.
Navigating State Ownership Rules
Washington has specific regulations about who can co-own a healthcare practice. While you cannot share ownership with certain other types of healthcare professionals, state law does permit Speech-Language Pathologists and Occupational Therapists to co-own a practice. Understanding how your business is structured is critical. You need to ensure it complies with the professional service corporation rules to allow for a clean transfer to a new, qualified owner. Getting this wrong can stop a deal in its tracks.
The Importance of Documentation
Potential buyers will scrutinize your financial and operational records. We often find that sellers are hesitant to show a Profit & Loss statement. It can feel like a vulnerable experience. However, organized books, clear billing records, and well-documented operational procedures are not just for due diligence. They tell the story of a stable, well-managed practice, which gives buyers confidence and supports a higher valuation. Starting the cleanup process 2 to 3 years before a sale is ideal, but a focused effort can make a big difference even on a shorter timeline.
Every practice sale has unique considerations that require personalized guidance.
Market Activity
We are seeing active deal flow for therapy practices across Washington. The range in practice size and value is significant, which creates opportunities for different types of buyers. For instance, a well-regarded solo OT practice in Pierce County, generating over $200,000 in revenue, recently sold with an asking price of $75,000. It was a perfect turnkey opportunity for a practitioner wanting to step into an established operation. In contrast, a larger OT practice in Kitsap County with a team of six therapists and over $700,000 in revenue is currently on the market for $300,000. These examples show that the market has an appetite for both smaller, lifestyle-oriented practices and larger, more scalable businesses. The final sale price is directly tied to revenue, profitability, staff structure, and growth potential.
The Sale Process
Selling your practice follows a structured path. While every sale is unique, the journey typically involves four key phases. We manage this process to ensure your confidentiality is protected and your time is respected, allowing you to focus on running your practice.
| Phase | What It Involves | Key Objective |
|---|---|---|
| 1. Preparation | Organizing financials, preparing a business plan, and addressing any operational weaknesses. | To build a compelling case and maximize practice value before going to market. |
| 2. Marketing | Confidentially presenting the opportunity to a curated list of qualified buyers. | To generate interest from the right buyers while protecting your practice’s privacy. |
| 3. Negotiation | Evaluating offers, structuring the deal, and agreeing on the terms of the sale. | To secure the best possible price and terms that align with your personal goals. |
| 4. Transition | Finalizing legal documents, navigating due diligence, and planning the handover. | To ensure a smooth and successful closing for you, your staff, and your patients. |
The due diligence process is where many practice sales encounter unexpected challenges.
Valuation
Wondering what your practice is truly worth? It is more than just a multiple of your revenue. Sophisticated buyers look at a metric called Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This sounds complicated, but the idea is simple. We start with your net income and add back certain expenses like your salary, personal car lease, or a one-time equipment purchase to get a picture of the practice’s true cash flow available to a new owner. For example, if your net income is $150,000 but you pay yourself a $120,000 salary ($50,000 above market rate), your Adjusted EBITDA would be closer to $200,000. That adjusted number is then multiplied by a figure based on market conditions and risk factors. Practices that are not reliant on a single owner and have a diverse referral base often command higher multiples. Getting this number right is the foundation of a successful sale.
A comprehensive valuation is the foundation of a successful practice transition strategy.
Post-Sale Considerations
The day you sign the final papers is a milestone, but it is not the final step. A well-planned transition is critical for the continued success of the practice and for protecting your legacy. Buyers place a high value on stability.
Here are three key areas to plan for:
- Your Staff’s Future. Your team is one of your greatest assets. A buyer will want to know if key therapists plan to stay. In the Pierce County sale, the fact that a key COTA was eager to remain was a significant selling point. Planning for staff communication and potential retention incentives is a crucial part of the handover.
- Your Own Role. What do you want to do after the sale? Some owners want a clean break, while others prefer to stay on for a period of 6 to 12 months to help with the transition. Defining your desired role early helps us find a buyer whose vision matches your own.
- Patient and Referral Handover. A clear plan for transitioning patient care and communicating with your key referral sources ensures continuity. This protects the goodwill you have spent years building and gives the new owner a strong start.
Your legacy and staff deserve protection during the transition to new ownership.
Frequently Asked Questions
What makes the Washington market unique for selling a Speech & Occupational Therapy Integration practice?
The Washington market is characterized by robust demand for integrated pediatric therapy services, strong community reputations of practices, and active buyers ranging from solo practitioners to larger strategic groups. This creates a favorable selling environment and a powerful position for practice owners to capitalize on community needs.
Are there specific ownership regulations for integrated Speech & Occupational Therapy practices in Washington?
Yes, Washington state has specific rules about healthcare practice ownership. Speech-Language Pathologists and Occupational Therapists can co-own a practice, but ownership cannot be shared with certain other healthcare professionals. Compliance with professional service corporation rules is essential to ensure a clean and legal transfer to a new owner.
How important is documentation when preparing to sell my practice?
Documentation is critical. Organized financial records, clear billing statements, and well-documented operational procedures provide buyers with confidence and support higher valuations. Starting the cleanup and organization process 2 to 3 years before the sale is ideal, but improvements made even on shorter timelines can significantly impact the sale.
What factors influence the valuation of a Speech & Occupational Therapy Integration practice in Washington?
Valuation depends on multiple factors, including Adjusted EBITDA, which considers net income plus add-backs like above-market salary and one-time expenses. Practices not reliant on a single owner and with a diverse referral base usually command higher multiples. Revenue, profitability, staff structure, and growth potential also play crucial roles.
What should I consider for the post-sale transition of my practice?
Post-sale planning should focus on staff retention, your own future role, and patient/referral handover. Ensuring key therapists stay, deciding if you want to remain for a transition period, and maintaining good communication with referral sources protect the practice’s stability and legacy during ownership change.