Selling your plastic surgery practice is one of the most significant financial and personal decisions you will make. In Hawaii, the market presents a unique set of opportunities and challenges driven by a diverse client base and specific procedural demands. Understanding these factors is the first step toward a successful transition. This guide provides a clear overview of the market, key considerations, and the path to achieving your goals.
Market Overview
Your practice operates in a uniquely favorable environment. The demand for plastic surgery in Hawaii is not just strong; it is growing, supported by a distinct mix of clientele and a global reputation.
A Dynamic and Growing Market
Unlike other regions, plastic surgery practices in Hawaii serve a broad audience. You likely see a combination of local residents, mainland Americans, and international visitors from Canada, Japan, and South Korea. This diverse patient flow creates a resilient and high-volume business model attractive to a wide range of potential buyers. Many successful clinics here consistently perform over 100 surgical and non-surgical procedures weekly.
The Medical Tourism Advantage
Hawaii’s status as a top tourist destination is a significant asset. Clients are drawn to the idea of recovering in a beautiful setting while receiving care that meets high U.S. medical standards. This “medical tourism” appeal is a powerful narrative that can significantly enhance your practice’s valuation, but it needs to be properly quantified and presented to potential buyers.
Key Considerations
The value of your practice is deeply connected to your specific service mix and patient demographics. In Hawaii, local demand is remarkably strong for certain procedures. For instance, Honolulu has been the top city for “eyelid surgery” searches for five years straight. This, combined with high demand for breast augmentations, “Mommy Makeovers,” and liposuction, creates a specific value profile. These local trends are layered on top of national patterns. You likely see Gen X patients driving body-contouring procedures, while Baby Boomers seek facial rejuvenation. Understanding how your practice aligns with these multi-layered trends is critical. An attractive growth story often involves highlighting your strength in these high-demand areas, including the expanding market for male patients.
Market Activity
Today’s market is active with several types of buyers, each with different motivations and goals. Knowing who is buying helps you position your practice effectively.
The primary buyers in the market right now are:
- Other Physicians or Group Practices. Often, a local competitor or a mainland group wants to expand their footprint in the lucrative Hawaiian market. These buyers understand the clinical side well.
- Private Equity (PE) Firms. PE groups are aggressive buyers. They are often willing to pay a premium valuation for a strong platform practice. However, they typically require the selling physician to stay on for 3-5 years to ensure a smooth transition and continued growth.
- Large Health Systems or Multi-Specialty Practices. These buyers look to integrate plastic surgery into a broader healthcare offering. The deal structures can be complex and tied to employment agreements.
- Overseas Buyers. There is growing interest from international groups, particularly from Asia, who see Hawaii as a strategic U.S. base. These transactions can introduce additional logistical and regulatory complexity.
The Sale Process
Many owners think the sale process begins when they decide to list their practice. The truth is, a successful sale begins long before that. Preparing for a sale can take 12 months or more. This is the period when you professionalize your operations, clean up financials, and gather the necessary documents for due diligence. It is also an emotional journey. Selling a practice you built is a major life event, and it is wise to surround yourself with a team that understands both the financial and personal stakes. This team should include an M&A advisor, legal counsel, and an accountant who all have specific healthcare transaction experience. Starting this process 2-3 years before your target exit date is not too early. It is what allows you to sell on your terms, not a buyer’s.
How Your Practice is Valued
A buyer isn’t just buying your assets. They are buying your future cash flow. That is why modern valuations focus on a metric called Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure represents your practice’s true profitability after “normalizing” for things like above-market owner salaries or personal expenses run through the business. This Adjusted EBITDA is then multiplied by a number (a “multiple”) to determine your practice’s Enterprise Value. While the formula seems simple, the multiple itself is influenced by many factors. A strong narrative and clean financials are what justify a premium multiple.
Factors Influencing Your Valuation Multiple
| Factor That Increases Multiple | Factor That Decreases Multiple |
|---|---|
| Multiple providers, low owner reliance | Practice depends entirely on the owner |
| Strong, documented growth history | Flat or declining revenue |
| Diverse mix of popular procedures | Outdated services or technology |
| Efficient operations and strong team | Inefficient processes and high staff turnover |
Planning for Life After the Sale
The day the deal closes is a beginning, not an end. Your transition plan should look beyond the transaction itself and define your future. Will you retire immediately, or will you stay on as an employee for a few years? If you stay, your employment agreement is one of the most important documents you will negotiate. It dictates your compensation, responsibilities, and autonomy. You also need a strategy for your real estate. Selling the property with the practice might maximize your cash at closing, while retaining it and leasing it to the new owner can create a long-term income stream. Finally, there are critical logistical steps, like securing tail medical malpractice coverage and properly notifying patients and state agencies. Planning for these post-sale realities is key to protecting your legacy and financial future.
Frequently Asked Questions
What makes the plastic surgery market in Hawaii unique for sellers?
The market in Hawaii is unique due to its diverse clientele including local residents, mainland Americans, and international visitors from countries like Canada, Japan, and South Korea. This diversity creates a resilient, high-volume business model supported by strong demand and Hawaii’s reputation as a top tourist destination, which enhances the appeal through medical tourism.
Who are the main types of buyers interested in acquiring a plastic surgery practice in Hawaii?
The main buyers include other physicians or group practices looking to expand, private equity firms that may require the seller to stay on for 3-5 years, large health systems or multi-specialty practices seeking integration opportunities, and overseas buyers, especially from Asia, interested in Hawaii’s strategic location.
What should I do to prepare my plastic surgery practice for sale?
Preparation can take 12 months or more and involves professionalizing operations, cleaning up financials, assembling due diligence documents, and building a strong advisory team including an M&A advisor, legal counsel, and an accountant with healthcare transaction experience. Starting this process 2-3 years before the planned sale is recommended.
How is the valuation of a plastic surgery practice in Hawaii determined?
Valuation primarily focuses on Adjusted EBITDA, which reflects true profitability after normalizing for owner salaries and personal expenses. This figure is multiplied by a valuation multiple influenced by factors like provider count, growth history, procedure mix, and operational efficiency. A strong narrative and financial cleanliness justify a premium multiple.
What should I consider for life after selling my plastic surgery practice in Hawaii?
Plan your transition carefully including decisions about retirement or staying on as an employee, negotiating employment agreements, and devising a real estate strategy (selling versus leasing). Ensure logistical steps like tail malpractice coverage and patient/state notifications are handled to protect your legacy and financial future.