Selling your Occupational & Hand Therapy practice is a major decision. The Seattle market presents a significant opportunity, but making the most of it requires careful planning. This guide offers insights into the current market, key steps for a successful sale, and what to expect along the way. We will cover how to prepare your practice to attract the right buyers and achieve a valuation that reflects your years of hard work.
Curious about what your practice might be worth in today’s market?
Executive Summary
If you own an Occupational & Hand Therapy practice in Seattle, you are in a strong position. The national market is growing, and demand for specialized therapy in our region remains high. This article walks you through the key factors for a successful sale, from understanding market dynamics and valuation to navigating the sale process. Preparing now ensures you can sell on your terms and maximize your final outcome.
A Market Primed for Opportunity
The decision to sell your practice is not just personal. It is also a financial one, heavily influenced by market conditions. Fortunately, the outlook for Occupational and Hand Therapy practices is very positive, both nationally and here in the Pacific Northwest.
National Momentum
The entire U.S. therapy market is experiencing strong growth. Projections show the sector expanding at a rate of 10.1% annually, on track to become a $128 billion industry by 2032. This broad trend creates a favorable environment for sellers, as more buyers, from private equity groups to expanding regional providers, are actively looking to invest in quality practices.
The Seattle Advantage
As a major metropolitan hub with a robust economy, Seattle reflects and often amplifies these national trends. There is a consistent, built-in demand for specialized services like hand therapy and orthopedic rehabilitation. Buyers recognize this. They see a Seattle-based practice not just as a stable business today, but as a platform for future growth in a thriving community.
Key Considerations for Seattle Practice Owners
A strong market gets buyers to the table. A strong practice closes the deal. Before you list your practice, it is important to look inward and prepare key aspects of your business for scrutiny. Buyers will dig deep into your operations and financials. They are looking for a stable, turnkey operation with a clear path to future success.
You should be ready to present a clear picture of your practice s health. This includes organized financial statements, details on your patient base and referral sources, and information about your skilled therapists and staff. They will also want to understand the terms of your lease and the unique services you offer. Finally, be prepared to share your reason for selling. A compelling and transparent story builds trust and makes the transition smoother for everyone.
What We See in the Market Today
While many transactions in our specialty remain confidential, the level of M&A activity is high. Independent practices are being acquired by larger therapy groups and private equity-backed platforms looking to expand their footprint in desirable markets like Seattle. From what we observe, buyers are consistently paying premiums for practices that demonstrate a few key attributes.
Here is what active buyers are looking for right now:
- Practices with Strong Systems. Buyers want businesses that are not dependent on the owner alone. This means having documented processes, modern EHR systems, and established patient intake and billing procedures that a new owner can easily adopt.
- A Clear Growth Story. A history of consistent revenue is good. A clear plan for future growth is even better. This could include opportunities to add therapists, expand service lines, or increase marketing efforts to capture more of the local market.
- A Reliable Team. An experienced team of licensed OTs and Certified Hand Therapists (CHTs) is one of the most valuable assets of a practice. It ensures continuity of care for patients and provides a stable foundation for the new owner.
Navigating the Sale Process
Selling your practice is a journey with several distinct phases. The best time to start preparing is often one to two years before you hope to sell. This gives you time to get your financials in order and optimize operations. The process generally begins with a comprehensive valuation to understand what your practice is worth. From there, your advisor confidentially markets the opportunity to a curated list of qualified buyers. After initial offers are received, you move into negotiation and, eventually, select a partner. The final stage is due diligence, where the buyer conducts a deep dive into your financials, contracts, and operations. Proper preparation here is key to preventing surprises and ensuring a smooth path to closing the deal.
The due diligence process is where many practice sales encounter unexpected challenges.
Understanding Your Practice’s True Value
Many owners mistakenly believe their practice s value is a simple percentage of revenue. In reality, sophisticated buyers use a more precise formula: Adjusted EBITDA x a Market Multiple.
Adjusted EBITDA is a key figure. It represents your practice’s true cash flow. We calculate it by taking your net income and adding back interest, taxes, depreciation, and amortization. We also add back owner-specific perks like a car lease or personal travel, and we normalize the owner’s salary to a fair market rate. This shows a buyer the real profitability they can expect.
That number is then multiplied by a multiple. This multiple is not fixed. It changes based on several risk and growth factors. A practice that is less reliant on the owner and has clear growth paths will command a higher multiple.
| Factor that Influences the Multiple | Lower Multiple | Higher Multiple |
|---|---|---|
| Provider Reliance | Dependent on owner | Associate-driven model |
| Growth Profile | Stable, but flat | Proven history of growth |
| Systems & Tech | Manual processes, old EHR | Streamlined, modern tech |
| Referral Sources | Concentrated in 1-2 sources | Diverse and consistent |
Planning for Life After the Sale
Closing the deal is a milestone, not the finish line. A successful transition plan considers what happens on day one and beyond for you, your staff, and your legacy. Thinking through these points ahead of time ensures your personal and financial goals are met. It also provides assurances to the buyer, strengthening the deal itself.
Here are a few things to plan for:
- Your Role After the Sale. Do you want to retire immediately, or would you prefer to stay on for a few years, perhaps in a clinical role with fewer administrative duties? Defining your desired role is a key part of the negotiation. Some deal structures, like a partnership or equity rollover, allow you to benefit from the practice’s future growth.
- Protecting Your Team. Your dedicated staff is a huge part of your practice’s value. A good transition plan includes communicating the change clearly and ensuring the new owner understands the importance of retaining your key therapists and administrative team.
- Managing Your Proceeds. The structure of your sale has major implications for your after-tax proceeds. Planning with an advisor can help you navigate these tax considerations to preserve the wealth you have worked so hard to build.
Not sure if selling is right for you? Our advisors can help you understand your options without any pressure.
Frequently Asked Questions
What is the current market outlook for selling an Occupational & Hand Therapy practice in Seattle?
The market outlook for selling Occupational & Hand Therapy practices in Seattle is very positive. Nationally, the therapy sector is growing at about 10.1% annually and is projected to reach $128 billion by 2032. Seattle, with its robust economy and demand for specialized therapy services like hand therapy and orthopedic rehabilitation, offers a strong platform for growth and attracts buyers actively looking to invest in quality practices.
What key factors do buyers look for when purchasing an Occupational & Hand Therapy practice in Seattle?
Buyers in Seattle look for practices with strong, documented systems that are not owner-dependent, a clear growth story with consistent revenue and future expansion plans, and a reliable team of licensed OTs and Certified Hand Therapists. They value practices with modern EHR systems, established patient intake and billing procedures, and diverse referral sources.
How should I prepare my Occupational & Hand Therapy practice for sale in Seattle?
Preparation should begin 1-2 years before sale and include organizing financial statements, detailing patient base and referral sources, showcasing skilled therapists and staff, reviewing lease terms, and preparing a transparent reason for selling. Ensuring your business operates smoothly with modern systems and documenting processes will make it more attractive to buyers.
How is the value of an Occupational & Hand Therapy practice determined in Seattle?
Practice value is typically based on the formula Adjusted EBITDA multiplied by a market multiple. Adjusted EBITDA represents true cash flow and is derived by adding back interest, taxes, depreciation, amortization, owner-specific perks, and normalizing the owner’s salary. The multiple varies based on risk and growth factors including provider reliance, growth potential, systems and technology, and referral source diversity.
What should I consider for life after selling my Occupational & Hand Therapy practice in Seattle?
After the sale, consider your future role—whether you want to retire immediately or stay in a clinical or reduced administrative role. Plan for protecting your team by ensuring clear communication and retention of key staff. Also, work with advisors to manage your sale proceeds carefully, considering tax implications to preserve your wealth and meet your personal and financial goals.