The market for dermatology practices in San Antonio is experiencing unprecedented interest from buyers. A growing population, high demand for services, and a shortage of providers have created a seller’s market. However, translating this market climate into your practice’s full financial potential requires a well-planned strategy. This guide offers insights into the key factors you should consider to navigate a successful sale and protect your legacy.
Market Overview
The conditions for selling a dermatology practice in San Antonio are strong. As the seventh-largest city in the U.S., San Antonio provides a large and growing patient base with increasing awareness of both medical and cosmetic dermatology. This demand is amplified by a national trend: a shortage of dermatologists, with nearly half of all specialists approaching retirement age. For practice owners, this creates a supply-and-demand imbalance that attracts significant buyer interest. This is not just a local trend. It is a fundamental market shift that positions well-run San Antonio practices as highly valuable assets.
Key Considerations
A successful sale involves more than just accepting an offer. It is a strategic process where preparation directly impacts the outcome. As you consider selling, focus on these critical areas.
Beyond the Highest Offer
The best partner for your practice isn’t always the one with the biggest checkbook. You should consider the buyer’s values and their plans for your practice name and brand. Will they maintain your patient-centric culture? Do they have a good reputation? Defining your non-negotiable terms early on is a key step.
Preparing for Scrutiny
Sophisticated buyers will conduct deep due diligence on your financials. Clean, organized records that clearly show your practice’s profitability are not optional. You must be prepared to demonstrate a history of stable or increasing revenue and stand behind your numbers.
Protecting Your Legacy
What happens to your loyal staff and physicians after the sale? This is a major concern for many owners. The structure of the deal can include provisions to protect your team and ensure a smooth transition. Thinking about these legacy issues beforehand helps you find a buyer who aligns with your goals.
Your legacy and staff deserve protection during the transition to new ownership.
Market Activity
The interest in dermatology practices is not just theoretical. It is driving real transactions. Private equity (PE) firms, in particular, have become aggressive buyers. One study showed that between 2012 and 2018, Texas was one of the top two states for PE dermatology acquisitions, accounting for 36% of all deals nationally. This trend continues today. We see evidence right here in San Antonio, where a busy practice with $2.1 million in revenue was recently acquired. For owners, this means there is a large pool of well-capitalized buyers actively looking for high-quality practices. For those thinking of selling in a few years, starting the preparation process now ensures you are ready when the timing is perfect for you.
The Sale Process
Selling your practice is a significant project, but it can be managed efficiently. With the right preparation, many transactions are completed in under six months. While every sale is unique, the process generally follows four key stages.
- Preparation and Valuation. This is the foundational step. We help you organize your financials, identify areas for improvement, and establish a clear, defensible valuation. This is where you build the story that buyers will see.
- Confidential Marketing. Your practice is presented to a curated list of qualified buyers without revealing its identity. This protects your confidentiality while creating a competitive environment to generate strong initial offers.
- Negotiation and Due Diligence. After selecting the best offer, you enter a formal due diligence period. The buyer will verify all financial and operational information. This is often the most challenging stage, where organized preparation pays off.
- Closing. Once due diligence is complete, final legal documents are drafted and signed. The funds are transferred, and the ownership of your practice officially changes hands.
The due diligence process is where many practice sales encounter unexpected challenges.
How Your Practice is Valued
Your practice is worth more than its equipment and real estate. Buyers are interested in its future cash flow. The primary metric they use is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure starts with your net income and adds back owner-specific or one-time expenses to show the true profitability of the business. For example, a practice with $500k in net income might have a $700k Adjusted EBITDA after accounting for an above-market owner salary.
This Adjusted EBITDA figure is then multiplied by a number (the multiple) to determine the Enterprise Value. The multiple is not a fixed number. It changes based on risk and growth potential.
| Factor | Lower Multiple | Higher Multiple |
|---|---|---|
| Provider Mix | Relies on a single owner | Multiple associate providers |
| Service Mix | Mostly medical dermatology | Strong cosmetic/cash-pay revenue |
| Growth | Flat or declining revenue | Consistent year-over-year growth |
| Scale | Under $1M in revenue | Over $3M in revenue |
Understanding these factors is the first step toward maximizing your practice’s value.
A comprehensive valuation is the foundation of a successful practice transition strategy.
Post-Sale Considerations
The day you close the deal is not the end of the story. The structure of the transaction has long-term implications for your finances, your role, and your team. A successful transition plan addresses these points before you even go to market. Many owners find that the right deal structure allows them to secure their financial future while remaining involved in the practice they built. Key questions to ask include:
- What role, if any, do I want to have in the practice after the sale?
- How can I structure the sale to be as tax-efficient as possible?
- Am I open to an earnout or retaining equity (a “rollover”) for potential future upside?
- What assurances can be built into the deal to protect my key employees?
Thinking through these questions with an advisor helps you negotiate a deal that aligns with your personal and financial goals for the years to come.
Every practice sale has unique considerations that require personalized guidance.
Selling your San Antonio dermatology practice? Get key insights on market trends, practice valuation, and sale strategies to maximize your outcome and protect your legacy.
Frequently Asked Questions
What factors contribute to the strong market for selling dermatology practices in San Antonio, TX?
San Antonio’s large and growing population, high demand for both medical and cosmetic dermatology services, and a shortage of dermatologists (especially with many approaching retirement) create a seller’s market, attracting significant buyer interest.
How is the value of a dermatology practice in San Antonio determined?
The value is mainly based on Adjusted EBITDA, which accounts for profitability by starting with net income and adding back owner-specific or one-time expenses. This figure is then multiplied by a variable multiple reflecting factors like provider mix, service mix, growth, and scale to determine the enterprise value.
What are critical considerations beyond just the highest offer when selling a dermatology practice?
Sellers should evaluate buyer values, plans for the practice’s name and brand, commitment to maintaining patient-centric culture, reputation, and protections for loyal staff and physicians to ensure the right partnership and legacy protection.
What are the main stages involved in the sale process of a dermatology practice in San Antonio?
The process generally involves four key stages: 1) Preparation and Valuation; 2) Confidential Marketing to qualified buyers; 3) Negotiation and Due Diligence where buyers scrutinize financials and operations; 4) Closing where legal documents are signed and ownership formally transfers.
What post-sale considerations should sellers be aware of?
Sellers should consider their future role in the practice, tax-efficient deal structures, potential earnouts or equity retention for future upside, and protections for key employees to ensure a smooth and beneficial transition aligned with their personal and financial goals.