Selling your dermatology practice is one of the biggest decisions you will ever make. In Mississippi, the unique market dynamics present a significant opportunity for owners who are prepared. High patient demand and a limited number of providers have created a favorable environment. This guide provides key insights to help you navigate the process and achieve your personal and financial goals.
Market Overview
The market for dermatology services in Mississippi is defined by a simple, powerful fact: there is far more demand than supply. This imbalance creates a compelling reason for strategic buyers to enter or expand in the state.
A High-Demand Environment
With only around 67 dermatologists in the entire state, patients face significant hurdles to get care. In many communities, wait times can stretch to 12 weeks or longer. For a potential buyer, this signals a practice with a built-in patient base and immediate potential for growth. It s a strong foundation for any acquisition.
The Geographic Opportunity
The need is most acute in rural areas like the Mississippi Delta. We know patients there often travel over 70 miles just to see a specialist. This represents a major, underserved population. A practice that has a plan to reach these patients, either through a satellite clinic or telehealth, becomes a much more valuable strategic asset.
Key Considerations
Beyond market demand, buyers look for signs of a stable and forward-thinking business. Selling is an irreversible decision. You need a clear view of your practice’s strengths and weaknesses before you begin the conversation.
An area ripe with potential is teledermatology. State law requires private insurers to cover telehealth at the same rate as in-person visits, and Mississippi Medicaid covers it as well. This is an underutilized growth lever. Integrating telehealth can expand your reach and significantly increase practice revenue before a sale. Another key factor is ensuring the practice isn t entirely dependent on you. Buyers pay a premium for businesses with multiple clinical providers and a strong support team, as it lowers their risk.
Market Activity
The current M&A landscape is active and competitive. It is important to understand the forces at play.
- A Coming Wave of Sellers. We expect a “flood” of practices to hit the market in the coming years. Many baby boomer physicians are reaching retirement age, creating more options for buyers. This could shift the market in the buyers’ favor.
- Buyers Are More Diligent Than Ever. With more choices, buyers are scrutinizing deals more carefully. They will dig deep into your financial records and operational performance. A professionally prepared practice stands out.
- A Competitive Process Wins. One-off offers are rarely the best deals. Our experience shows that running a confidential, competitive process can generate multiple offers. In one recent case, we secured over eight offers for a client, which allowed them to choose the buyer that best aligned with their financial and legacy goals.
The Sale Process
Many owners worry that the sale process will be a long, draining ordeal. But when it is managed correctly, a transaction can be completed in less than six months. The process generally involves four phases: preparation, marketing, due diligence, and closing.
The most critical stage is often due diligence. This is where a buyer verifies all the information about your practice. It is where many deals encounter unexpected challenges. Having clean, quality financial records and a trusted office manager to help field requests is key. An experienced advisory team acts as a buffer, managing the requests and keeping the process on track so you can continue focusing on patient care. This isn’t about creating more work for you. It’s about strategic delegation.
Valuation
“What is my practice worth?” is the first question every owner asks. The answer isn’t a single number but a range based on a story of stability, profitability, and growth. The core metric buyers use is Adjusted EBITDA, which is your practice s profit before interest, taxes, depreciation, and amortization. We adjust it to normalize for any owner-related expenses to show a buyer the true cash flow of the business.
That Adjusted EBITDA is then multiplied by a number12the “multiple.” This multiple is influenced by several factors. A practice that is well-positioned will command a higher multiple.
| Characteristic | Attracts a Lower Multiple | Attracts a Higher Multiple |
|---|---|---|
| Provider Model | Solo-practitioner dependent | Multiple associate providers |
| Growth | Flat or declining revenue | Consistent, trackable growth |
| Financials | Unorganized books | Clean, audited financials |
Most practices are undervalued until their EBITDA is properly calculated and their story is framed for buyers. Getting an independent, professional valuation is the foundation of a successful sale.
Post-Sale Considerations
The final offer is more than just a price. The structure of the deal has major implications for your after-tax proceeds, your legacy, and your role after the sale. You will need to consider different options, such as an all-cash deal versus one that includes an earn-out or an opportunity to roll over equity into the new, larger company.
A strategic buyer will often want to preserve what you have built. This means keeping the practice name and, most importantly, retaining your clinical providers and staff. We help negotiate agreements that honor employee contracts and ensure a smooth transition for the people who helped you succeed. Control is not a binary choice. The right deal structure can help you secure your financial future while ensuring your practice and your team are in good hands.
Frequently Asked Questions
Why is Mississippi a favorable market for selling a dermatology practice?
Mississippi has high patient demand for dermatology services but a limited number of providers (only around 67 dermatologists statewide). This creates a built-in patient base and opportunities for growth, especially in underserved rural areas.
What role does teledermatology play in the value of a dermatology practice in Mississippi?
Teledermatology is an underutilized growth lever in Mississippi, where state law requires private insurers to cover telehealth at the same rate as in-person visits, and Medicaid covers it as well. Practices that incorporate telehealth can expand reach and increase revenue, making them more valuable to buyers.
What are buyers looking for in a dermatology practice in Mississippi?
Buyers prefer practices that are stable and forward-thinking, with clean financial records, multiple clinical providers (not solely dependent on the seller), a strong support team, and growth potential like teledermatology integration. Competitive processes with multiple offers tend to result in better deals.
How is the value of a dermatology practice determined in Mississippi?
The main valuation metric is Adjusted EBITDA (profit before interest, taxes, depreciation, and amortization, adjusted for owner-related expenses). This figure is then multiplied by a ‘multiple’ influenced by factors such as provider model, growth history, and quality of financial records. Practices with multiple providers, consistent growth, and clean financials command higher multiples.
What should sellers consider about the deal structure after receiving an offer for their dermatology practice?
The deal structure affects after-tax proceeds, legacy, and seller’s role post-sale. Options include all-cash deals, earn-outs, or rolling over equity into the buyer’s company. Sellers should negotiate agreements that protect employee contracts and ensure a smooth transition, preserving the practice name and staff retention for continuity.