How to Value a Plastic Surgery Practice: A 2025 Guide

Determining the value of your plastic surgery practice requires a look far beyond simple formulas or what a colleague down the street received for theirs. Your practice is a unique asset, a sophisticated blend of high-demand medical procedures and highly profitable, cash-pay cosmetic services. To understand its genuine worth, you need to learn to see it from the perspective of a private equity group or a strategic buyer.

At an M&A advisory firm like ours, we see firsthand that these buyers do not value your practice based on emotion or anecdotal rules of thumb. They evaluate it based on its verifiable financial health, its identifiable risks, and its potential for future growth. This guide will walk you through the core principles of that valuation approach, so you can prepare for a successful transaction and get the full value for your life’s work.

Curious about what your practice might be worth in today’s market? Request a Complimentary Value Estimate

The Foundation of Value; Beyond ‘Rules of Thumb’

You may have heard of valuing a practice based on a percentage of annual revenue. This method is outdated and fails to capture the real profitability of your operations. A practice bringing in $5 million with high overhead is much less valuable than a practice bringing in $4 million with lean operations and higher profit margins. For this reason, the single most critical metric in any serious practice valuation is Adjusted EBITDA.

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It offers a much clearer picture of the actual cash flow your business generates from its core operations. We then take it a step further to find the Adjusted EBITDA. This process involves normalizing your financials by adding back one-time expenses and costs that a new owner would not have to bear. We often find owner-specific perks that can be added back. Common examples include luxury vehicle leases, personal travel billed as professional development, salaries for family members who are not active in the business, or significant, non-recurring legal fees from a past dispute. This adjusted figure represents the true, sustainable earning power of your practice a buyer is purchasing.

For a deeper look at this, you can read our guides on EBITDA Explained for Physicians and our EBITDA Normalization Guide.

Key Factors That Determine Your Practice’s Multiple

Once you have a solid Adjusted EBITDA, the next step is to apply a valuation multiple. This is where the unique qualities of your plastic surgery practice become central. The multiple is not a fixed number; it reflects the quality, stability, and risk profile of your earnings. A stronger practice with less perceived risk gets a higher multiple.

Here are the primary factors that influence your multiple.

• Scale and Profitability
  A practice with a higher Adjusted EBITDA is seen as less risky and more durable. A larger, more profitable business can better absorb economic downturns, the departure of a single provider, or changes in patient trends. It has more established systems and a more stable revenue base, which justifies a higher multiple for a buyer looking to build a platform.

• Service Mix
  Buyers are very interested in your mix of reconstructive procedures versus elective, cash-pay cosmetic services. A healthy blend is ideal. A strong and growing base of recurring revenue from non-surgical treatments like injectables, laser therapies, or a connected medspa can significantly increase your valuation. This type of revenue is predictable and less dependent on you, the primary surgeon. Think of it like a subscription model; a buyer can count on that income stream every month.

• Provider Structure and Dependency
  A practice that is entirely dependent on a single surgeon is far less attractive. If all the revenue and patient goodwill walk out the door when you do, a buyer sees immense risk. It feels less like buying a business and more like buying your job. A model with multiple associate surgeons, physician assistants, nurse injectors, and a strong clinical support team demonstrates a scalable business that isn’t just a job—it’s a self-sustaining enterprise.

• Patient Demographics and Brand Strength
  A well-regarded practice located in a high-income, growing metropolitan area will always command a premium. Your brand’s reputation is a major intangible asset. This isn’t just about name recognition. It’s about a high volume of positive online reviews, a robust patient referral network from other physicians and past clients, and a professional digital presence that constantly attracts new, high-value patients at a low acquisition cost.

• Documented Growth Potential
  You need to present a clear, believable story about future growth. This isn’t about vague promises. You should clearly outline untapped opportunities. This could include having physical space to add another operating room, a detailed plan to add new high-margin services like a body contouring suite, or market data showing an opportunity to expand into a neighboring territory.

Adjusted EBITDA	Typical Multiple Range (2025)
< $1M	4.0x – 6.0x
$1M – $3M	6.0x – 8.0x
> $3M	8.0x – 12.0x+

These ranges are dynamic and depend on market conditions. For more detail, see our analysis of valuation multiples by medical specialty.

A Step-by-Step Valuation Example

Let’s put these ideas into practice with a simplified example. Imagine “Prestige Plastic Surgery,” a practice with two surgeons and a strong cosmetic service line generating recurring revenue.

1. Calculate Adjusted EBITDA The practice reports $800,000 in net income. We analyze the books and identify that the two owner-surgeons are paid salaries that are a combined $200,000 above the market rate for their clinical work. We also find the practice paid for $50,000 in personal travel and event sponsorships that will not continue. The Adjusted EBITDA is $800,000 + $200,000 + $50,000 = $1,050,000.
2. Apply a Multiple Given the practice’s strong growth, multiple providers reducing dependency, and excellent mix of services, we determine a 7.0x multiple is appropriate.
3. Determine Enterprise Value The enterprise value is $1,050,000 × 7.0 = $7,350,000.
4. Calculate Net Proceeds From the enterprise value, you must subtract any outstanding business debt. If the practice has a $350,000 equipment loan and we estimate $250,000 in transaction fees, your estimated net proceeds would be approximately $6,750,000.

This example is for illustration. A formal valuation would include a much deeper analysis of your financials, operations, and market position.

The structure of your practice sale has major tax implications for your after-tax proceeds. Learn about our Tax-Efficient Sale Structures.

The Role of Equity Rollover and Earnouts

When you partner with private equity, the deal often includes more than just a cash payment. Two common components are equity rollovers and earnouts, both designed to align your interests with the buyer’s post-sale.

An equity rollover is when you reinvest a portion of your sale proceeds into the new, larger parent company. This gives you a “second bite at the apple.” By becoming a shareholder in the larger platform, you can benefit from the growth it achieves and its eventual sale in the future, which can often be very lucrative.

Earnouts are future payments tied to the practice hitting certain performance targets after the sale. They are a way for buyers to bridge a valuation gap and ensure the practice continues on its growth path. It is important to carefully model the likelihood of hitting these targets when you evaluate an offer.

For more information on these topics, see our page on private equity deal structures.

Common Mistakes to Avoid During Your Sale

We often see talented plastic surgeons make certain unforced errors that reduce their final valuation. Being aware of these can help you prepare for a much more successful sale.

• Using Inaccurate “Comps”
  Hearing that a colleague’s practice sold for a high price can be misleading. It’s like comparing two houses on the same street without knowing that one is twice as large and has been completely remodeled. Your neighbor’s service mix, provider structure, profit margin, and growth trajectory could be completely different from yours. Relying on this kind of informal information can lead to unrealistic expectations and poor decision-making.

• Not Preparing Your Financials for Due Diligence
  Prospective buyers will conduct a deep, exhaustive dive into your financials and operations. We understand that opening your books to a stranger can feel invasive. However, messy accounting, a lack of detailed reports, or inconsistent financial statements are major red flags. They signal disorganization to a buyer and make them wonder what other problems might be hiding beneath the surface. This creates uncertainty, and buyers reduce their offers to account for uncertainty. Our financial due diligence guide can help you prepare.

• Accepting the First Offer You Receive
  In almost any significant transaction, the first offer is a starting point for negotiation, not the final word. It’s often designed to see if you are serious and to anchor your expectations. The best way to ensure you are getting the maximum value for your years of hard work is to run a competitive process with multiple qualified buyers bidding for your practice. This creates leverage and shows you the true market value, not just what one group is willing to pay.

Proper preparation before selling can significantly increase your final practice value. Explore our Services

Your Practice is a Strategic Asset

Your plastic surgery practice is more than just a business—it is a strategic asset that you have spent your career building. Its value is a product of your hard work, your clinical reputation, and your vision. Understanding how sophisticated buyers will evaluate that asset is the first step toward a successful and profitable exit.

By focusing on your financial health, telling a clear growth story, and preparing properly for the sale process, you can position your practice to achieve the maximum value it deserves. When the time comes to sell, you want to be negotiating from a position of strength and knowledge.

Understanding your practice’s current market position is the first step toward a successful transition. Schedule a Valuation Consultation