Selling your plastic surgery practice is one of the most significant financial decisions of your career. The Maryland market is currently experiencing a unique wave of buyer interest, creating a window of opportunity for owners. But navigating this landscape requires more than just finding a buyer. It requires preparation, strategy, and a deep understanding of what drives value in the eyes of sophisticated acquirers today. This guide provides the insights you need to begin that journey.
Curious about what your practice might be worth in today’s market?
Market Overview
The market for plastic surgery practices in Maryland is strong. With approximately 268 plastic surgeons in the state and a nationwide 19% increase in surgical procedures since 2019, demand for aesthetic services is high. This creates a favorable environment for practice owners who are considering a sale. The high-demand, largely cash-pay nature of the specialty makes these practices particularly attractive to buyers seeking stable, high-margin businesses.
Three key factors are driving the current market:
- Growing Patient Demand: An aging population and wider cultural acceptance of cosmetic procedures continue to fuel patient volume.
- Favorable Demographics: Maryland’s affluent communities provide a consistent and reliable patient base for cosmetic and elective procedures.
- A New Class of Buyers: Strategic acquirers and private equity firms are actively seeking to partner with successful practices in the region, bringing new capital and opportunities.
These fundamentals signal that now is an excellent time to explore your options. The combination of high demand and buyer interest may not last forever.
Key Considerations
When you decide to sell, a buyer isn’t just purchasing your equipment and your lease. They are buying your future cash flow. For a plastic surgery practice, proving that cash flow is transferable can be tricky. A major factor is goodwill, which is the value of your reputation. The key question a buyer will ask is how much of that goodwill is tied to you personally versus how much belongs to the practice itself. A practice with a strong brand, multiple providers, and robust marketing systems has much higher practice goodwill and, therefore, a higher value. We find that focusing on operational efficiency to improve profit margins, which can range from 15% to over 25%, is a critical step in building this transferable value long before a sale.
Your legacy and staff deserve protection during the transition to new ownership.
Market Activity
The biggest story in medical M&A right now is the incredible rise in private equity (PE) investment, and plastic surgery is a prime target. Nationally, between 2000 and 2023, the volume of plastic surgery practices acquired by PE firms grew by an astonishing 4,300%. This is not a passing trend. It is a fundamental shift in the market.
The Private Equity Wave
PE firms are drawn to plastic surgery for its high-profit margins, cash-pay revenue streams, and opportunities for consolidation. They see the potential to build large, efficient platforms by partnering with successful local practices. They bring capital for growth, sophisticated management systems, and a clear path for expansion.
What This Means for Your Maryland Practice
For you, this influx of PE capital means more potential buyers and the possibility of achieving a premium valuation. These are sophisticated buyers who perform deep financial analysis and look for well-run practices that can serve as a foundation for growth. Dealing with them requires an equal level of preparation and expertise to ensure you are negotiating on a level playing field.
Sale Process
Many owners think selling a practice is a quick transaction. The reality is that a well-run sale process often takes 12 months or longer from start to finish. Its more like a strategic project than a simple sale. The journey typically begins with deep preparation of your financials and operations. It then moves to a confidential marketing phase to attract qualified buyers, followed by rounds of negotiation, and finally, a critical stage called due diligence. This is where the buyer inspects every aspect of your practice, from your financial records to your compliance protocols. It is the single biggest hurdle where we see deals unexpectedly fall apart due to a lack of preparation. Starting the process early, even if you plan to sell in 2-3 years, is the best way to ensure you are in control.
The due diligence process is where many practice sales encounter unexpected challenges.
Valuation
Understanding your practices true value begins with one key metric: Adjusted EBITDA. This isn’t just your profit. It s an industry-standard measure of cash flow that buyers use to determine a purchase price. It starts with your net income and adds back interest, taxes, depreciation, and amortization. Then, we “adjust” it by normalizing owner-specific expenses to reflect the practice’s true earning power.
Here is a simplified example of how this works:
| Financial Item | Amount | Explanation |
|---|---|---|
| Reported Net Income | $500,000 | The profit on your books. |
| Owner Salary Normalization | +$150,000 | Adding back salary paid above a fair market rate. |
| One-Time or Personal Expenses | +$50,000 | Adding back expenses a new owner wouldn’t incur. |
| Adjusted EBITDA | $700,000 | The true cash flow a buyer is purchasing. |
This Adjusted EBITDA figure is then multiplied by a valuation multiple (e.g., 5x to 8x+) that is influenced by factors like your location, provider mix, and growth potential. Getting this calculation right is the foundation of a successful sale.
A comprehensive valuation is the foundation of a successful practice transition strategy.
Post-Sale Considerations
The sale agreement is not the end of the story. The structure of your deal is just as important as the final price. Many transactions today involve more than a simple cash payment at closing. You might consider an earnout, where you receive additional payments based on the practice s future performance. Or, you might be offered an equity rollover, where you retain a minority stake in the new, larger company. This gives you a “second bite at the apple” when the PE firm sells the entire platform years later. These structures can help you maximize your financial outcome, maintain a role in the practice if you desire, and ensure your legacy and staff are protected. Planning for these elements from the beginning is key to crafting an exit that truly meets your personal and financial goals.
The right exit approach depends on your personal and financial objectives.
Frequently Asked Questions
What factors are driving the current high demand for plastic surgery practices in Maryland?
The current high demand is driven by growing patient demand due to an aging population and cultural acceptance of cosmetic procedures, favorable demographics with affluent communities in Maryland, and a new class of buyers including strategic acquirers and private equity firms actively seeking to partner with successful practices.
How is the value of a plastic surgery practice in Maryland typically determined?
The value is primarily determined by Adjusted EBITDA, which is net income plus adjustments for owner salary normalization and one-time or personal expenses. This cash flow figure is then multiplied by a valuation multiple influenced by factors such as location, provider mix, and growth potential.
Why is goodwill important in the sale of a plastic surgery practice and how can it affect the sale price?
Goodwill represents the value of the practice’s reputation and brand beyond just physical assets. Buyers assess how much goodwill is tied to the individual owner versus the practice itself. Practices with strong brands, multiple providers, and solid marketing systems have higher goodwill which can significantly raise the practice’s sale price.
What role do private equity firms play in the Maryland plastic surgery practice market?
Private equity firms have significantly increased their investments, attracted by the specialty’s high-profit margins and cash-pay revenue. They seek to build large platforms by partnering with local practices, contributing capital, management systems, and growth opportunities, thereby increasing buyer competition and potential valuation for sellers.
What should a plastic surgery practice owner in Maryland expect during the sale process?
The sale process is typically a strategic project lasting 12 months or more, involving preparation of financials and operations, confidential marketing, buyer negotiations, and thorough due diligence. Starting early, even years before sale, is crucial to maintain control and ensure a smooth transaction without surprises.