The Charlotte market for Occupational and Hand Therapy is strong, presenting a significant opportunity for practice owners considering a sale. However, turning this opportunity into a successful outcome requires more than just good timing. A successful transition depends on strategic preparation and a deep understanding of the local market, valuation drivers, and regulatory landscape. This guide provides the initial insights you need to navigate the path toward a profitable and smooth exit.
A Thriving Market for Therapy Practices in Charlotte
If you are considering selling, the timing is favorable. The market for therapy services is experiencing powerful growth, creating significant demand from buyers for well-run practices.
National Tailwinds
The U.S. Occupational and Physical Therapy market is on a steep upward trajectory. Projections show the market doubling in size to over $128 billion by 2032. This isn’t just a number. It reflects a fundamental increase in demand for services, with the U.S. Department of Labor forecasting an 11.2% growth in jobs for occupational therapists in the coming decade. Buyers, from private equity groups to strategic health systems, see this growth and want to invest in it.
The Charlotte Advantage
This national trend is clearly reflected in Charlotte. The Charlotte-Concord-Gastonia area is home to a robust workforce of therapy professionals, ensuring a new owner can find the talent needed to continue and grow your practice’s legacy. This combination of high demand for services and a solid local talent pool makes Charlotte a highly attractive location for acquirers.
Key Considerations for Selling in North Carolina
While the market is strong, selling a medical practice in North Carolina involves navigating a specific set of rules. Getting these wrong can cause significant delays or even invalidate a deal. Here are a few critical points you must address.
- State Board Approval. Any change in the ownership of your professional corporation requires prior approval from the North Carolina Medical Board. This is not a suggestion; it is a legal requirement under state statute NCGS 55B.
- Ownership Rules. North Carolina’s Corporate Practice of Medicine (CPOM) laws dictate who can own a medical practice. Generally, ownership is restricted to licensed physicians or a mix of physicians and certain advanced practice providers. Structuring your deal to comply with these rules is vital.
- Federal Compliance. Your sale and any ongoing relationship with the buyer must be structured carefully to comply with the federal Anti-Kickback Statute and Stark Law. How payments are structured and how referrals are handled post-sale will be scrutinized.
What We’re Seeing in Market Activity
The conversation around selling a practice quickly turns to price. While you may see “rules of thumb” based on revenue, sophisticated buyers today look much deeper.
Beyond Revenue Multiples
It is true that therapy practices often sell for a multiple of their annual revenue. However, the most desirable practices are valued based on their profitability, or Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). A practice with a 20% profit margin will command a much higher valuation than one with a 10% margin, even if their revenues are identical. This is where preparation before a sale can dramatically increase your final price.
The Rise of Sophisticated Buyers
The buyers in today’s market are not just other local therapists. They are often private equity-backed groups and large strategic health organizations. These groups have the capital to pay premium prices, but they also conduct rigorous due diligence. They look for practices with clean financial records, diverse referral sources, and a strong operational team beyond just the owner.
The Four Stages of a Successful Sale
Selling your practice is a process, not a single event. While every sale is unique, they generally follow a clear, four-stage path. We find that owners who understand this path are better prepared and achieve better outcomes.
- Preparation and Strategy. This is where the most value is created. It involves getting your financial records in order, clarifying operational procedures, understanding your key growth drivers, and addressing any potential issues before a buyer finds them.
- Valuation and Marketing. This stage starts with a comprehensive valuation to set a realistic and defensible asking price. Then, we create marketing materials that tell your practice’s story and confidentially present the opportunity to a curated list of qualified buyers.
- Negotiation and Due Diligence. After receiving offers, you negotiate the key terms of the deal. The chosen buyer will then conduct due diligence, a deep dive into your financials, contracts, and operations. This is where many deals encounter turbulence if the preparation in Stage 1 was incomplete.
- Closing and Transition. Once due diligence is complete and legal documents are finalized, the deal closes. The final step is executing the transition plan to ensure a smooth handover for your staff, patients, and the new owner.
How Your Practice is Valued
Valuing your practice is more than a math problem. Its about understanding the true profitability and potential in the eyes of a buyer. At SovDoc, we don’t rely on simple rules of thumb. We focus on a metric that sophisticated buyers use: Adjusted EBITDA. This process normalizes your financials to show the practice’s true earnings power. It adjusts for owner-specific expenses and one-time costs. The difference can be dramatic.
| Financial Item | As Stated on Tax Return | Adjusted for Sale | Explanation |
|---|---|---|---|
| Net Income | $200,000 | $200,000 | The starting point. |
| Owner’s Salary | $250,000 | $150,000 | Owner salary is adjusted to reflect a market-rate salary for a manager. |
| Add-Back: Salary | +$100,000 | The difference is added back to the profit. | |
| Add-Back: Personal | +$25,000 | Personal travel or car expenses run through the business. | |
| Adjusted EBITDA | $200,000 | $325,000 | This is the figure buyers use for valuation. |
This Adjusted EBITDA figure is what a buyer will apply a multiple to. Getting this number right is the foundation of a successful sale.
Life After the Sale: Planning Your Next Chapter
The transaction itself is not the end of the story. A successful exit strategy includes a clear plan for what comes next, for both you and the practice you built. The best deals are structured to protect your legacy and align with your personal goals.
Protecting Your Legacy and Team
For many owners, the biggest concern is what happens to their staff and patients. This is a key point of negotiation. We help owners secure commitments from buyers to retain staff, protect the practice’s culture, and continue the standard of care you established. Your transition plan is a critical document that ensures the continued success of the practice after you step away.
Your “Second Bite of the Apple”
Selling doesn’t always mean walking away with a check and nothing more. Many deals today include an “equity rollover,” where you retain a minority stake (e.g., 10-30%) in the new, larger company. This allows you to benefit from the future growth of the platform and get a potential second, often larger, payday when the entire platform is sold again in 3-5 years. This strategy can align your financial future with a partner who will grow your practice to the next level.
Frequently Asked Questions
What is the current market outlook for selling an Occupational & Hand Therapy practice in Charlotte, NC?
The market for Occupational and Hand Therapy practices in Charlotte is strong and growing, with high demand from buyers including private equity groups and strategic health systems. Nationally, the therapy market is projected to double to over $128 billion by 2032, and the Charlotte area benefits from a robust workforce and high demand for services.
What legal approvals are required to sell an Occupational & Hand Therapy practice in North Carolina?
Any change in ownership of a professional corporation must receive prior approval from the North Carolina Medical Board as required by state statute NCGS 55B. Compliance with North Carolina’s Corporate Practice of Medicine laws is also critical, as ownership is generally limited to licensed physicians or certain advanced practice providers.
How is the value of an Occupational & Hand Therapy practice determined in Charlotte?
Valuation is primarily based on Adjusted EBITDA, which reflects true profitability by adjusting for owner-specific expenses and one-time costs. Practices with higher profit margins command higher valuations. Buyers look beyond revenue multiples and evaluate financial health, referral diversity, and operational strength.
What are the key stages in successfully selling a therapy practice?
Selling a practice involves four stages: 1) Preparation and Strategy—organizing finances and operations; 2) Valuation and Marketing—setting a realistic price and presenting to buyers; 3) Negotiation and Due Diligence—finalizing deal terms and buyer investigations; 4) Closing and Transition—finalizing the sale and ensuring smooth ownership handover.
What should sellers consider regarding their staff and patients after the sale?
Sellers often prioritize protecting their legacy by ensuring commitments from buyers to retain staff, preserve the practice culture, and maintain the quality of care. Transition planning is critical to safeguard the future success of the practice and support a smooth changeover for patients and employees.
