Guide to Selling a Primary Care Practice in Texas

Selling your Texas primary care practice is a significant milestone in your career. This decision involves much more than finding a buyer. It is about securing your financial future and protecting the legacy you have built. We created this guide to give you a clear view of the process, from understanding your practice’s market value to navigating the final transition. Proper preparation can change the outcome of your sale.

The Texas Primary Care Market

The market for primary care practices in Texas is active. Demand is high from both hospitals and private equity groups looking to expand their footprint in the state. However, Texas has specific rules you need to know about. State law generally restricts the ownership of a medical practice to licensed physicians. This means that when a non-physician entity, like a private equity firm, acquires a practice, the deal must be structured carefully. They often use a model called a Management Services Organization (MSO) to handle the business operations while the clinical side remains physician-owned. Understanding this from the start is important for a smooth process.

Three Key Areas to Focus on Before a Sale

When you begin to think about selling, a few areas need your immediate attention. Preparing these properly can prevent delays and increase your final sale price.

1. Get Your Financials in Order. A buyer will want to see at least three years of clean financial records, including Profit & Loss (P&L) statements that match your tax returns. This is where many owners realize their practice is worth more than they think. We help normalize financials by identifying personal expenses run through the business or one-time costs that a new owner would not have. This adjusted number, often called Adjusted EBITDA, gives a true picture of profitability.

2. Review Your Legal Standing. In Texas, non-compete agreements are enforceable if they are reasonable. You want to negotiate terms that protect the buyer but do not unfairly limit your own future. You also need a plan for handling patient records and notifications that complies with state law to ensure a smooth transition and high patient retention.

3. Consider Your Staff and Leases. Your team is one of your greatest assets. Happy, well-trained employees and a stable team are very attractive to buyers. Similarly, having a long-term, transferable lease on your facility removes a major uncertainty for a potential new owner.

A Look at Recent Texas Market Activity

Seeing what other practices have sold for can give you a feel for the market. While every practice is unique, recent sales in Texas show strong activity across different sizes and models. For example, a family practice in Austin with $1.3 million in revenue sold for $700,000. In the Houston area, a concierge practice with around $600,000 in revenue sold for $520,000. Even smaller practices are finding buyers, like one in Euless with about $420,000 in revenue that sold for $325,000. These are not just numbers. They represent physicians who successfully transitioned their practices. The final price depends on profitability, location, and how well the practice is prepared for sale.

The Path to a Successful Sale

A successful practice sale does not happen by accident. It follows a structured, confidential process designed to maximize value and find the right partner. This is very different from just putting a “for sale” sign out.

Phase 1: Strategy and Preparation

This is the most important phase, and it should start long before you plan to exit. It involves cleaning up your financials, defining your personal goals for the sale, and creating a marketing package that tells the story of your practice. This is where we build the foundation for a premium valuation.

Phase 2: Confidential Marketing

We do not list your practice on public websites. Instead, we identify and discreetly approach a curated list of qualified buyers from our network who are a good fit for your practice culture and goals. Every potential buyer signs a non-disclosure agreement (NDA) before receiving any sensitive information.

Phase 3: Negotiation and Closing

This stage is about creating a competitive environment where multiple buyers are interested. This gives you leverage to negotiate the best price and terms. We manage the offers, guide you through the complexities of due diligence, and work with attorneys to ensure a smooth closing.

Determining Your Practice’s True Value

Many physicians hear rules of thumb, like a primary care practice is worth 0.5 to 0.7 times its annual revenue. This method is too simple and often leaves money on the table. Sophisticated buyers do not value you on revenue. They value you on profitability. We calculate your practice’s true earning power using a metric called Adjusted EBITDA. This starts with your net income and adds back things like your salary (if it is above market rate), personal car leases, or other one-time expenses. The result shows a buyer how profitable the practice truly is. This adjusted profit is then multiplied by a number based on your practice’s specific risks and growth opportunities. This professional approach often reveals a much higher value than owners expect.

Life After the Sale: Planning Your Transition

The sale is not over when the check is cashed. A successful transition protects your legacy, ensures continuity of care for your patients, and safeguards you from future issues. A poor transition can cause patient drop-off and create lingering legal headaches. Planning for this is a critical part of the deal.

Here is how a planned transition compares to an unplanned one:

Thinking through these post-sale details a-front is just as important as negotiating the price.