The decision to sell your dermatology practice is a significant one. For many owners in Oklahoma City, the current market presents a unique window of opportunity, driven by strong national growth and high demand for quality practices. This guide provides a clear overview of the market, the selling process, and how to understand your practice’s true value. We aim to give you the clarity needed to navigate this path successfully.
Executive Summary
Selling your dermatology practice in Oklahoma City is more than a transaction. It is the result of your life s work. The good news is that the market is strong. The U.S. dermatology sector is projected to grow by over 7% annually, and the active presence of buyers in Oklahoma City reflects this positive trend.
A Strong Opportunity
The current environment is favorable for sellers. Both private equity groups and larger strategic health systems are actively looking to partner with or acquire established dermatology practices. This demand creates a competitive landscape that can lead to premium valuations for well-prepared practices.
A Complex Process
However, a successful sale requires more than just a willing buyer. It involves careful preparation, strategic positioning, and expert navigation through financial due diligence, negotiations, and legal complexities. Understanding these steps is the key to maximizing your financial outcome and securing your legacy.
Market Overview
The outlook for dermatology practices is exceptionally healthy, and Oklahoma City is no exception. Nationally, the market is forecasted to grow at a compound annual rate of 7.3% through 2034. This growth is fueled by an aging population, rising awareness of skin health, and increasing demand for both medical and cosmetic procedures.
In Oklahoma City, a dynamic and competitive landscape confirms this trend. The presence of several well-regarded dermatology clinics indicates a robust healthcare economy where buyers see clear potential. For a practice owner, this competition is a positive sign. It means buyers are actively investing in the area. Your practice, with its established patient base and reputation, represents a valuable opportunity for a buyer looking to enter or expand their footprint in the OKC market. The key is not just to be on the market, but to stand out.
Key Considerations
When you decide to sell, potential buyers will look closely at your practice’s health and stability. From our experience helping physicians, we know that buyers focus on a few specific areas. Preparing these elements ahead of time can make a significant difference in your final valuation and the smoothness of the transaction.
Here are three key areas that will be under the microscope:
- Your Financial Story. Buyers want to see clear, organized financials. They will look beyond simple revenue and focus on your practice’s profitability, specifically your Adjusted EBITDA. This involves normalizing expenses to show the true cash flow of the business. Practices with consistent revenue, like a median of $1.3 million for medical or $1.8 million for cosmetic dermatology, and healthy operating margins (24-27%) are highly attractive.
- Patient and Staff Stability. An acquiring group is buying your future revenue stream, which depends on your patients. They will want to understand your patient volume, demographics, and how you attract new patients. Equally important is your staff. A skilled team that is likely to stay through the transition provides immense value and assures the buyer of operational continuity.
- Compliance and Operations. Demonstrating that your practice adheres to all healthcare regulations is non-negotiable. Buyers need assurance that there are no hidden compliance risks. They will also look at your operational efficiency, from the EMR system you use to your billing processes and insurance payor mix.
Market Activity
The market for dermatology practices is more active than ever, largely due to a trend of consolidation. Nationally, over 80% of dermatology practices are small, with one to five providers. This has made the specialty a prime target for private equity (PE) firms and larger healthcare organizations looking to build regional or national platforms.
This trend is playing out in Oklahoma and across the country. These buyers are seeking to partner with successful, physician-led practices to provide capital and business support, allowing dermatologists to focus on clinical care. For a practice owner, this means you are not just selling to another doctor who will take over your lease. You are often selling to a sophisticated group with a strategic growth plan. This can open up new possibilities, such as minority recapitalizations where you sell a portion of your practice but continue to lead and share in the future growth. Knowing the different types of buyers and their unique goals is important for finding the right partner for your practice.
Valuation
One of the first questions any owner asks is, “What is my practice worth?” The answer is not based on a simple rule of thumb. It’s a structured calculation based on your practice’s real performance and market demand. The process starts with a metric called Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
We determine this by taking your net income and adding back non-operational or owner-specific costs, like a portion of a high owner’s salary, personal travel, or a car lease. This gives a picture of the practice’s true profitability. That Adjusted EBITDA is then multiplied by a specific “multiple.” This multiple is influenced by your specialty, the size of your practice, your growth history, and your reliance on a single provider.
Here is a simplified example of how it works for a multi-provider OKC practice:
| Metric | Calculation Step | Example Value |
|---|---|---|
| Adjusted EBITDA | normalizing profits and adding back owner perks | $700,000 |
| Market Multiple | based on practice size, specialty, and growth | 6.75x |
| Enterprise Value | Adjusted EBITDA x Multiple | $4,725,000 |
Many owners are surprised to learn their practice is worth more than they thought once its financials are properly presented.
Sale Process
Selling your practice is a journey with distinct phases. It’s not like listing a house. it is a confidential, strategic process designed to protect your interests and achieve the best outcome. The journey generally begins long before a buyer is ever contacted, with a preparation phase where you and your advisory team organize financials and craft the story of your practice.
Once prepared, your advisor will confidentially market the opportunity to a curated list of qualified buyers. After initial interest is established and non-disclosure agreements are signed, the negotiation phase begins, leading to a formal offer, or Letter of Intent (LOI). This is a critical stage where deal terms are set. Following the LOI, the buyer conducts a deep-dive review called due diligence, where they verify all the information about your practice. This is often where unexpected issues can arise if you are not well-prepared. The final stage involves legal documentation and, finally, the closing of the transaction.
Post-Sale Considerations
Closing the deal is not the end of the story. A successful transition is defined by what happens next, and planning for it is a key part of the sale process. You need to consider how the sale will impact your staff, your patients, and your own future.
Protecting Your Staff and Legacy
Your team is one of your practice s greatest assets. Ensuring they have a secure future is important for both their well-being and the continued success of the practice. The right deal structure can protect your staff and preserve the culture you ve built. It ensures your legacy is one of continuity and care, not disruption.
Optimizing Your Financial Outcome
The structure of your sale has major tax implications. How the deal is classified, along with terms like earnouts or rollover equity, will directly affect your net proceeds. Planning this with an expert before the sale can save you a significant amount in taxes and align the financial outcome with your long-term goals.
Planning Your Next Chapter
For many physicians, a sale isn’t about immediate retirement. It might be about reducing administrative burdens to focus purely on patient care, pursuing other interests, or taking a “second bite of the apple” by retaining equity in the new, larger organization. The right partnership can be a launchpad for your next professional chapter, whatever that may be.
Frequently Asked Questions
What is driving the strong market for selling dermatology practices in Oklahoma City?
The market is driven by strong national growth in the dermatology sector, projected to grow over 7% annually, along with high local demand in Oklahoma City. Factors like an aging population, rising awareness of skin health, and increasing demand for medical and cosmetic procedures fuel this growth. Buyers, including private equity groups and health systems, are actively seeking to acquire established practices.
How do I determine the true value of my dermatology practice in Oklahoma City?
Value is calculated using Adjusted EBITDA, which normalizes profits by adding back non-operational or owner-specific expenses. This number is then multiplied by a market multiple that reflects practice size, specialty, and growth. For example, a multi-provider practice with an Adjusted EBITDA of $700,000 might have a multiple of 6.75x, giving an enterprise value of about $4.7 million.
What key areas do buyers focus on when evaluating my practice?
Buyers focus on three main areas: 1) Your financial story, especially profitability and Adjusted EBITDA; 2) Patient and staff stability, ensuring a reliable revenue stream and operational continuity; and 3) Compliance and operational efficiency, including adherence to healthcare regulations and systems like EMR and billing processes.
What does the sale process of a dermatology practice in Oklahoma City typically involve?
The process involves several phases: preparation with organizing financials and crafting your practice’s story; confidential marketing to qualified buyers; negotiation and signing of a Letter of Intent; buyer due diligence to verify details; legal documentation; and finally, closing the deal. Preparation and confidentiality are critical throughout to ensure the best outcome.
What should I consider after selling my dermatology practice?
Post-sale planning is crucial. Focus on protecting your staff to ensure their job security and preserve your practice’s culture. Optimize the financial outcome by structuring the deal with tax implications in mind, possibly including earnouts or rollover equity. Finally, plan your next professional chapter‚Äîwhether that means reducing administrative tasks, continuing clinical work, or pursuing new opportunities with equity in a larger organization.