Selling your hospice or geriatric practice is one of the most significant decisions of your career. In Washington, a unique combination of demographic shifts and market demand has created a powerful window of opportunity for owners. But realizing the full value of your life’s work requires more than just good timing. It requires a clear understanding of the market, a strategic approach to valuation, and careful preparation. This guide provides the insights you need to begin navigating that process.
Proper preparation before selling can significantly increase your final practice value.
Market Overview
The market for hospice and geriatric services in Washington is not just strong; it is expanding rapidly. This growth is driven by powerful, long-term trends that directly increase the value of well-run practices like yours.
A Growing Need for Care
Washington’s population is aging. Projections show a significant increase in the number of counties where residents aged 65 and over make up more than a quarter of the population. This demographic shift fuels a rising demand for specialized care. Nationally, the geriatric care market is expected to grow at 6.3% annually, while the hospice market is projected to grow by 4.61% each year through 2030. For practice owners, this translates to a growing patient base and sustained relevance for years to come.
The Workforce Challenge
While demand is high, the state is also facing labor shortages in senior care. This presents both a challenge and an opportunity. A practice that has built a stable, committed, and efficient team is not just a provider of services; it is a rare and valuable asset. Buyers are actively seeking practices that have solved the staffing puzzle, and they are willing to pay a premium for that stability.
Key Considerations for Sellers
Beyond broad market trends, buyers will focus on the specific health of your practice. Many owners think they need to wait until everything is perfect to sell, but the reality is that preparation should start 2-3 years in advance. Buyers pay for proven performance, not just potential. Getting these three areas in order is your first step toward maximizing value.
- Patient Census Health: Buyers look for a consistent and stable patient census. Predictable patient volume is a direct indicator of your practice’s stability and its standing in the community.
- Staff Stability: As mentioned, your team is one of your most valuable assets. Low turnover and a strong clinical team reduce the perceived risk for a new owner and are critical selling points.
- Financial Clarity: Your practice’s value is tied directly to its profitability. This requires clean, well-organized financial records that clearly show your practice’s true earning power, often measured by Adjusted EBITDA.
Curious how your practice compares to others in your specialty that have recently sold?
Market Activity
The current M&A landscape in Washington is active and competitive. Both strategic and financial buyers are seeking to acquire high-quality hospice and geriatric practices. Understanding who these buyers are and what they want is key to positioning your practice effectively. This is not about just “listing” your practice; it is about running a professional process to create competitive tension and find a partner who aligns with your goals.
| Buyer Type | Primary Motivation | What They Look For |
|---|---|---|
| Strategic Buyers | Expand service area, add service lines | Geographic fit, operational synergies, strong team |
| Financial Buyers (PE) | Platform for growth, financial returns | Scalable model, clean financials, growth potential |
The right buyer for you depends entirely on your personal and financial goals for the future.
The due diligence process is where many practice sales encounter unexpected challenges.
The Sale Process
Selling your practice is a structured journey with distinct phases. Each step is an opportunity to build value, but it also carries risks if not managed carefully. A confidential and well-organized process protects your staff, your patients, and your negotiating position.
The path to a successful closing typically involves these five stages:
1. Preparation and Valuation: This initial phase involves a deep dive into your financials and operations to understand your practice’s true market value and identify areas for improvement before going to market.
2. Confidential Marketing: We confidentially approach a curated list of qualified buyers who have been vetted to match your goals, presenting your practice’s story in the most compelling way.
3. Negotiation and Offer Selection: Multiple offers are analyzed not just on price, but on structure, cultural fit, and post-sale terms. This allows you to choose the best overall deal.
4. Due Diligence: The chosen buyer will conduct a thorough review of your practice. Proper preparation here is critical to prevent surprises that could derail the transaction.
5. Closing: Final legal documents are signed, funds are transferred, and the transition of ownership is completed according to a pre-agreed plan.
A comprehensive valuation is the foundation of a successful practice transition strategy.
Understanding Your Practice’s Value
Determining the value of your hospice or geriatric practice is more complex than applying a simple rule of thumb. While industry metrics exist, like an average of $60,000 per patient in the hospice census or multiples around 5x EBITDA for home health, your practice’s true value lies in the details. The process starts with calculating your Adjusted EBITDA, or Earnings Before Interest, Taxes, Depreciation, and Amortization. This isn’t just the profit on your tax return. It’s a truer measure of cash flow that normalizes for owner-specific expenses like above-market salaries or personal vehicle costs. Once this baseline is established, a valuation multiple is applied, influenced by your practice’s size, growth rate, and staff stability. Most practices we see are actually undervalued until this normalization process reframes their financial story.
The structure of your practice sale has major implications for your after-tax proceeds.
Post-Sale Considerations
The closing of the deal is a beginning, not an end. Thinking through what comes next is a critical part of a successful transition, both for you personally and for the legacy of your practice. A well-designed sale plan addresses these issues long before you reach the closing table.
Your Future Role
Do you want to continue practicing? Retire immediately? Or perhaps stay on in a leadership role for a few years? We help structure deals that include minority recapitalizations, strategic partnerships, and structured earnouts, allowing you to define your involvement on your terms. This ensures control isn’t a binary “on/off” switch.
Tax Implications
How your deal is structured has massive implications for your net, after-tax proceeds. Planning in advance for the most tax-efficient sale structure can save you a significant amount of money and is a key part of our advisory process.
Ensuring a Smooth Transition
Protecting your staff and ensuring continuity of care for your patients is paramount. A transition plan, developed as part of the sale process, provides a clear roadmap for communication and operations, ensuring the legacy you built continues to thrive under new ownership.
Every practice sale has unique considerations that require personalized guidance.
Frequently Asked Questions
What market trends make it a good time to sell a hospice or geriatric practice in Washington?
Washington’s aging population and increasing number of counties with residents aged 65 and over contribute to a growing demand for hospice and geriatric services. Nationally, the geriatric care market is expected to grow at 6.3% annually, and the hospice market is projected to grow by 4.61% annually through 2030, creating a strong and expanding market in Washington.
What are the key areas a seller should focus on before listing their practice?
Sellers should start preparing 2-3 years in advance by focusing on three key areas: 1) Patient census health for stable and consistent patient volume, 2) Staff stability to ensure low turnover and a reliable clinical team, and 3) Financial clarity with clean, well-organized financial records, often measured by Adjusted EBITDA.
Who are the typical buyers for hospice and geriatric practices in Washington, and what do they look for?
Typical buyers include strategic buyers who want to expand service areas or add service lines, looking for geographic fit, operational synergies, and a strong team. Financial buyers, like private equity, seek a scalable model, clean financials, and growth potential. The right buyer depends on the seller’s personal and financial goals.
What does the sale process for a hospice or geriatric practice typically involve?
The sale process has five stages: 1) Preparation and Valuation to understand true market value, 2) Confidential Marketing to vetted qualified buyers, 3) Negotiation and Offer Selection weighing price, structure, and cultural fit, 4) Due Diligence where the buyer reviews the practice thoroughly, and 5) Closing where final legal documents are signed and ownership changes hands.
How can the structure of the sale impact the seller’s after-tax proceeds and post-sale involvement?
The sale structure greatly affects after-tax proceeds. Planning a tax-efficient structure can save significant money. Post-sale, sellers can choose to retire, continue practicing, or stay in a leadership role through arrangements like minority recapitalizations or earnouts, allowing a flexible transition and ongoing involvement if desired.