Selling your Occupational or Hand Therapy practice in Colorado is a significant decision. The process involves more than just finding a buyer; it requires understanding current market dynamics, preparing your practice to showcase its maximum value, and navigating a complex transaction. This guide provides a clear overview of the Colorado market, key considerations for your specialty, and the steps involved in a successful sale, helping you move forward with confidence.
The Colorado Market: A Landscape of Opportunity
The market for Occupational and Hand Therapy practices in Colorado is shaped by positive state and national trends. For owners considering a sale, these factors create a promising environment. The key is understanding how these broad trends translate into value for your specific practice.
Strong Demand for Services
Nationally, the demand for occupational therapists is growing. The Bureau of Labor Statistics projects an 11% increase in employment from 2023 to 2033, much faster than the average for all occupations. This long-term demand provides a stable foundation for a practice’s future, which is a very attractive point for potential buyers. Practices with a specialty in hand therapy are often seen as even more valuable due to their focused expertise.
A Favorable Local Environment
Here in Colorado, recent legislative changes have also created a positive impact. The updated Colorado Occupational Therapy Practice Act now allows OTs to prescribe certain durable medical equipment (DME) without a physician’s order. This can expand your practice’s revenue streams and operational autonomy, making it a more attractive and resilient business to a potential acquirer.
What Buyers Look For in Your Practice
Before you go to market, it is important to see your practice through a buyer’s eyes. They are looking for a well-run business with clear, documented value. This means getting your financial house in order is a top priority. Your books should be clean, your billing and collections efficient, and your revenue streams easy to understand. A history of organized financials demonstrates stability and profitability. Beyond the numbers, buyers of therapy practices pay close attention to the human element. They want to see a strong team and a clear plan for a smooth transition that protects client relationships and staff morale. A buyer is not just acquiring assets. They are acquiring your reputation and legacy.
Understanding Current Market Activity
While you will not find specific sale prices for Colorado therapy practices published online, market activity is steady. We are seeing several key trends that influence who is buying and what they are looking for.
- A Diverse Pool of Buyers. The potential buyers for your practice are more varied than ever. They include other local therapy practices looking to expand, larger regional health systems, and private equity firms looking to invest in the stable healthcare sector. Each buyer type has different goals and offers a different kind of future for your practice.
- A Premium on Niche Expertise. Hand therapy is a respected specialty. Buyers are often willing to pay a premium for practices with a strong reputation in a specialized area of care. Your focused expertise is a major asset that needs to be highlighted correctly.
- Confidentiality is Paramount. Because specific deal information is not public, most successful transactions happen through private, confidential channels. An experienced advisor can connect you to a vetted pool of qualified buyers without alerting your staff, clients, or competitors, protecting your practice’s value throughout the process.
The Path to a Successful Sale
The sale of a practice follows a structured path designed to protect both you and the buyer. It starts with confidential conversations and preparation. We help you create a comprehensive profile of your practice that highlights its strengths for potential buyers. Once a qualified buyer expresses serious interest and signs a confidentiality agreement, they receive this information. If they wish to proceed, they submit a formal offer. After you accept an offer, a due diligence period begins. This is where the buyer verifies all the financial and operational details of your practice. Proper preparation is critical here, as a well-organized practice can move through due diligence smoothly, leading to a successful closing.
How Your Practice is Valued
A common question we hear is, “What is my practice worth?” In most cases, the value of an Occupational or Hand Therapy practice is calculated as a multiple of its Seller’s Discretionary Earnings (SDE). SDE is essentially the total cash flow available to a new owner, calculated by taking your net income and adding back your salary, benefits, and other non-essential business expenses. While industry averages suggest a multiple of 1x to 4x SDE, the final number depends on many factors. A professional valuation tells the full story of your practice’s strengths to justify the highest possible value.
| Valuation Factor | Pushes Multiple Lower | Pushes Multiple Higher |
|---|---|---|
| Provider Reliance | Dependent on a single owner | Multi-provider, associate-driven model |
| Revenue Streams | Relies on one primary service | Includes diverse sources like DME or workshops |
| Financial Records | Disorganized or inconsistent | Clean, with clear trends |
| Location & Lease | Nearing end of lease, poor terms | Long-term lease, desirable location |
Planning for Life After the Sale
The day you sign the closing documents is not the end of the journey. A successful transition is one where your legacy is protected, your staff feels secure, and your clients continue to receive excellent care. This is often achieved through a transition plan that you and the buyer agree on, which may involve you staying on for a period of time to ensure a smooth handover.
Equally important are the financial considerations. The structure of your sale has major implications for your after-tax proceeds. Decisions about how assets are transferred, whether you accept an earnout based on future performance, or if you retain a portion of equity in the new company all shape your financial future. Thinking through these outcomes with an advisor before you even list your practice ensures the deal is structured to meet your personal and financial goals from the very beginning.
Frequently Asked Questions
What is the current demand for Occupational Therapy practices in Colorado?
The demand for occupational therapists is growing nationally with an 11% projected increase in employment from 2023 to 2033, which is faster than average for all occupations. Colorado also has favorable legislative changes, such as allowing OTs to prescribe certain durable medical equipment without a physician’s order, adding to the local demand and practice value.
What do buyers typically look for when purchasing an Occupational or Hand Therapy practice?
Buyers look for a well-run business with clear, documented value, including clean financials, efficient billing and collections, and diverse revenue streams. They also value a strong team and a smooth transition plan to protect client relationships and staff morale. Reputation and legacy are important factors in the purchase decision.
How is the value of an Occupational or Hand Therapy practice determined in Colorado?
Practice value is often calculated as a multiple of Seller’s Discretionary Earnings (SDE), which is the cash flow available to a new owner after adjusting net income. The multiple can range from 1x to 4x SDE depending on factors like provider reliance, diversity of revenue streams, financial record quality, and location/lease terms.
What are important considerations during the sale transaction process?
Key steps include confidential discussions, preparing a comprehensive practice profile, signing confidentiality agreements by interested buyers, formal offers, and a due diligence period where financial and operational details are verified. Proper preparation is critical for a smooth due diligence and successful closing.
What should a practice owner plan for after selling their Occupational or Hand Therapy practice?
Owners should plan for a transition period to protect their legacy, reassure staff, and ensure client care continuity. Financial considerations include sale structure, tax implications, earnouts, and equity retention. Consulting an advisor early helps structure the deal to meet personal and financial goals effectively.
