Selling your Occupational & Hand Therapy practice is one of the most significant financial decisions you will ever make. In a dynamic market like Richmond, VA, strong demand for therapy services creates a phenomenal opportunity for practice owners. However, capitalizing on this opportunity requires more than just a “For Sale” sign. It demands careful preparation, strategic positioning, and a deep understanding of what buyers are looking for. This guide will walk you through the key factors to consider.
Curious about what your practice might be worth in today’s market?
Market Overview: A Seller’s Market in Richmond
The current environment for therapy practices is exceptionally strong, and Richmond is well-positioned to benefit from these tailwinds. The market’s strength is not a matter of opinion. It is a matter of data.
A Thriving National Landscape
Nationally, the occupational and physical therapy industry is experiencing remarkable growth. Valued at over $59 billion in 2024, the market is projected to more than double by 2032, expanding at a rate of 10.1% annually. This growth is fueled by an aging population and an increased focus on rehabilitative care. Furthermore, the demand for skilled occupational therapists is set to grow 11% by 2033, much faster than the average profession.
Richmond’s Prime Position
These national trends directly benefit practice owners in the Richmond area. The region’s robust healthcare ecosystem and growing population create a consistent need for specialized services like hand therapy. For a well-run practice, this translates into a stable patient base, strong revenue potential, and significant interest from potential buyers.
Key Considerations for Richmond Sellers
While market conditions are favorable, a premium valuation depends on the health of your specific practice. Sophisticated buyers look beyond the top-line revenue and dig into the operational details that signal a stable and scalable business. They will focus on your referral patterns, an area where many private practices are vulnerable. An over-reliance on a few key physicians can be seen as a major risk. They will also scrutinize your staffing. While high demand for OTs in Richmond is great for business, buyers need to see that you have a stable, skilled team and that the practice is not entirely dependent on you as the owner. Your reputation, both with patients and referring physicians, is the bedrock of your practice’s value.
Every practice sale has unique considerations that require personalized guidance.
Market Activity and Buyer Landscape
The market for therapy practices is more active than ever. This is not just local competitors looking to expand. A new class of professional buyers has entered the space, creating new opportunities for sellers who know how to navigate the landscape.
Who Is Buying Practices Like Yours?
- Private Equity Groups: These financial buyers are looking for well-run “platform” practices to invest in and grow. They often pay premium multiples for practices with strong profitability and systems.
- Regional Therapy Platforms: These are larger, established therapy companies looking to expand their footprint in key markets like Richmond. A sale to them can be what is known as a strategic “tuck-in.”
- Local Competitors or Hospitals: A practice down the street or a local health system may want to acquire your patient base and talented staff to increase their own market share.
- Individual Therapists: An associate or another therapist looking to become a practice owner may be a potential buyer, though they often have more limited access to capital.
Understanding these different buyer profiles is key. Each has different goals and will value your practice differently.
The Path to a Successful Sale
A successful practice sale is a marathon, not a sprint. We find that owners who begin planning one to two years in advance achieve the best outcomes. The process starts with clarifying your personal goals. Do you want to retire completely, or would you prefer to stay on and work for a few more years? Answering this helps determine the right type of buyer and deal structure. From there, the focus shifts to preparation. This means organizing your financial statements, documenting your operational procedures, and ensuring the practice can run smoothly without your daily involvement. The final stage is the transaction itself, which involves confidential marketing, negotiating offers, and navigating the critical due diligence phase, where buyers verify every aspect of your business.
The due diligence process is where many practice sales encounter unexpected challenges.
How Your Practice is Valued
Many owners mistakenly believe their practice’s value is a simple percentage of revenue or based on the value of their equipment. In reality, sophisticated buyers value your practice based on its true profitability. The key metric is Adjusted EBITDA Earnings Before Interest, Taxes, Depreciation, and Amortization. It is calculated by taking your net income and adding back owner-specific expenses and non-recurring costs to reveal the practice’s true cash flow. Your practice’s value is then determined by multiplying that Adjusted EBITDA by a specific number, known as a valuation multiple.
What Drives Your Valuation Multiple?
The multiple is not a fixed number. It changes based on the quality and risk profile of your practice.
| Factor | Impact on Multiple |
|---|---|
| Provider Diversity | High (less owner reliance) |
| Referral Source Mix | High (reduces risk) |
| Profitability (EBITDA) | High (drives base value) |
| Growth Trajectory | Medium-High (shows future potential) |
A practice with multiple providers, diverse referral sources, and clean financials will command a significantly higher multiple than a solo practice dependent on a handful of referral relationships.
Planning for Life After the Handshake
The moment you sign the closing documents is not the end of the journey. In fact, what happens next is critical to protecting your legacy and your financial future. Most buyers will require you to stay on for a transition period to ensure a smooth handover of patient and referral relationships. It is important that this role, its duration, and compensation are clearly defined in the sale agreement. Furthermore, buyers will be keenly focused on retaining your key staff. A well-designed staff retention plan can be a crucial element in getting a deal across the finish line. Finally, the structure of your sale carries enormous tax consequences. Planning ahead can dramatically increase your net proceeds.
The structure of your practice sale has major implications for your after-tax proceeds.
Frequently Asked Questions
What is the current market outlook for selling an Occupational & Hand Therapy practice in Richmond, VA?
Richmond, VA is currently a seller’s market for Occupational & Hand Therapy practices, benefiting from strong national industry growth and local demand driven by a robust healthcare ecosystem and growing population.
What are key factors buyers look for when purchasing a therapy practice in Richmond?
Buyers focus on operational stability including diversified referral sources, a skilled and stable staff, and minimizing reliance on the owner. They assess profitability mainly via Adjusted EBITDA and value practices with growth potential and strong community reputation higher.
Who are the typical buyers for Occupational & Hand Therapy practices in Richmond?
Typical buyers include Private Equity groups seeking investment platforms, regional therapy companies expanding locally, local competitors or hospitals aiming to grow market share, and individual therapists looking to own their practice, although with usually less capital available.
How is the value of an Occupational & Hand Therapy practice determined?
Practice value is primarily based on profitability, measured by Adjusted EBITDA. This calculation adjusts net income for owner expenses and non-recurring costs. The EBITDA is then multiplied by a valuation multiple which varies based on provider diversity, referral mix, profitability, and growth trajectory.
What should sellers plan for after selling their Occupational & Hand Therapy practice?
After the sale, sellers often stay on for a transition period to support patient and referral retention. A clear agreement on role, duration, and compensation is essential. Additionally, effective staff retention strategies and tax-efficient sale structuring are crucial to protect financial outcomes and legacy.