Key Considerations for Your ABA Practice
Buyers evaluate a home-based ABA practice on more than just profit. They are buying a functioning clinical operation and want to see stability and potential. You should focus on a few key areas well before you plan to sell.
Your Financial Story
This is about having clean, clear financials. Buyers will want to see 2-3 years of profit & loss statements and balance sheets. More importantly, they want to understand your true cash flow. This means identifying add-backs, like your personal car lease or above-market salary, to calculate an adjusted EBITDA. Consistent revenue and efficient billing are signs of a healthy, well-run business.
Your Team and Reputation
In a service business like ABA, your team is a huge asset. Buyers look for low staff turnover and a strong clinical reputation in the community. A practice that relies entirely on the owner for its client relationships is seen as riskier than one with a team of dedicated Board Certified Behavior Analysts (BCBAs) managing cases.
Your Operational Systems
How do you manage client intake, scheduling, and billing? Strong, documented systems show a buyer that the practice can run smoothly through a transition and beyond. This is especially important for home-based models, where logistics are complex.
Market Activity
Right now, the M&A market for ABA practices is not about a lack of buyers; it is about finding the right buyer. We are seeing a trend where well-prepared practices in strong markets like Oregon receive multiple offers. This competitive tension is what allows you to negotiate better terms, not just a higher price. You might secure a better transition plan, protect your staff, or structure a deal with more cash at closing. But this window of opportunity can shift with economic conditions and changes in healthcare policy. An offer that comes to you unsolicited is rarely the best offer you can get. Running a confidential, structured process ensures you see what the broader market is willing to pay. Timing your entry into the market can make a significant difference in your final outcome.
The Sale Process
Selling your practice is a structured process, not a single event. Understanding the steps can help you prepare and stay in control. While every sale is unique, it generally follows a clear path.
- Strategic Preparation. This phase happens long before your practice is shown to anyone. It involves a professional valuation to set a realistic price, organizing all your key documents, and identifying any operational weaknesses a buyer might question. This is the work that builds value.
- Confidential Marketing. Your practice is presented to a curated list of qualified buyers under strict confidentiality agreements. The goal is to create interest from multiple parties without alerting your staff, clients, or competitors. We don’t “list” your practice. We run a controlled process.
- Diligence and Negotiation. Once you accept a preliminary offer, the buyer begins due diligence. They will scrutinize your financials, contracts, and operations. This is often where deals fall apart due to surprises. Proper preparation prevents this.
- Closing and Transition. After the final purchase agreement is signed, the deal closes. Your role then shifts to helping ensure a smooth transition for staff and clients, securing the legacy you have built.
Valuation: What Is Your Practice Really Worth?
Many owners mistakenly believe their practice’s value is a simple multiple of their revenue. In reality, buyers value your practice based on your Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure represents your true operational cash flow. An expert calculates this by taking your net income and adding back expenses like your own salary, personal car payments, and other one-time costs.
The Adjusted EBITDA is then multiplied by a number (a “multiple”). This multiple is not fixed; it changes based on several risk factors. The less risk a buyer sees, the higher the multiple they are willing to pay. Most owners tend to overestimate their practice’s value until they go through this data-driven process.
| Factor Influencing Value | Lower Multiple | Higher Multiple |
|---|---|---|
| Practice Scale | Under $500k EBITDA | Over $1M EBITDA |
| Owner Reliance | High (owner is key) | Low (team-driven) |
| Payer Mix | High concentration | Diverse payer contracts |
| Growth | Stagnant or flat | Consistent year-over-year growth |
Post-Sale Considerations
The day the deal closes is not the end of the journey. A successful transition is structured into the sale itself, and it is important to understand what your role and financial future might look like. There are several components you should plan for.
- Your Role in the Transition. Most buyers will want you to stay on for a period of time, typically 1 to 3 years, to ensure a smooth handover. Your role can be flexible, but it’s important to negotiate this upfront so it aligns with your personal goals.
- Understanding Earnouts. Part of your payment may be tied to the practice hitting certain performance targets after the sale. This is called an earnout. It is critical to ensure these targets are realistic and achievable before you agree to them.
- The “Second Bite” with Rollover Equity. Many owners choose to “roll over” a portion of their sale proceeds into equity in the new, larger company. This allows you to benefit from the future growth of the platform and get a “second bite at the apple” when the larger entity sells again in 5-7 years. This is a powerful way to remain invested in your legacy.
Frequently Asked Questions
What financial documents should I prepare before selling my home-based ABA practice in Oregon?
You should prepare 2-3 years of profit & loss statements and balance sheets. It’s also important to clarify your true cash flow by identifying add-backs such as personal car leases or above-market salaries to calculate an adjusted EBITDA.
How important is the clinical team and reputation in selling my ABA practice?
The clinical team and reputation are crucial assets. Buyers look for low staff turnover and a strong clinical reputation. Practices led by a team of dedicated Board Certified Behavior Analysts (BCBAs) rather than heavily owner-dependent client relationships are considered less risky and more valuable.
What operational systems should be in place for a home-based ABA practice sale?
You should have strong, documented systems for client intake, scheduling, and billing. This demonstrates to buyers that the practice can run smoothly through the transition and beyond, which is especially important for the logistics of a home-based service model.
How is the value of my ABA practice determined in Oregon?
The value is based on Adjusted EBITDA, which reflects true operational cash flow after adding back personal expenses like owner salary. This number is multiplied by a variable multiple influenced by factors such as practice scale, owner reliance, payer mix, and growth trajectory.
What should I expect regarding my role and payment after selling my ABA practice?
You may be asked to stay on 1-3 years to ensure a smooth transition, with flexibility in your role negotiated upfront. Some payment may come as an earnout tied to meeting performance targets. You might also choose to roll over a portion of proceeds into equity in the new company, allowing continued investment in the practice’s future growth.
