If you are an Occupational or Hand Therapy practice owner in Washington, you have likely built more than just a business. You have built a vital community resource. When it is time to consider your next chapter, transitioning that legacy requires a plan. This guide provides a look at the current market, the selling process, and how to position your practice for a successful sale.
Curious about what your practice might be worth in today’s market?
Market Overview
The market for Occupational and Hand Therapy practices in Washington is strong. Buyer interest comes from several directions. You have local practices seeking to expand their footprint, regional healthcare systems looking to integrate therapy services, and private equity firms. These equity groups are increasingly active in acquiring therapy practices. They see the value in well-run, profitable clinics. This diverse buyer pool creates a competitive environment. For a seller, competition is good news. It can lead to better valuations and more favorable deal terms. The key is understanding what each type of buyer is looking for.
Key Considerations for a Seller
Thinking about a sale brings up important questions. Preparing in advance will make the process smoother and more profitable. It is about getting your house in order before you put it on the market.
Your Professional Team
Selling a practice is not a solo activity. You will need an accountant to organize your financials and a lawyer to handle contracts. An M&A advisor, like our team at SovDoc, can manage the entire process. We coordinate the experts, find the right buyers, and manage negotiations, which allows you to focus on running your practice.
Operational Readiness
Buyers pay for performance. We often see owners double their valuation with focused preparation. You can improve your practice’s appeal by:
1. Improving Cash Flow. Focus on efficient billing and follow up on any unpaid claims.
2. Reviewing Expenses. Cut any spending that is not essential to patient care or operations.
3. Demonstrating Growth. Highlight secondary revenue sources, like telehealth or specialized group classes.
Confidentiality
Keeping the sale confidential is critical. You do not want to worry your staff or patients prematurely. A private, controlled process ensures that information is shared only with serious, vetted buyers under a non-disclosure agreement.
Preparing properly for buyer due diligence can prevent unexpected issues.
Market Activity in Washington
The theory of a strong market is one thing. Seeing it in action is another. Recently, an Occupational Therapy practice in Kitsap County with a team of six therapists and over $700,000 in annual revenue was listed for sale. This shows that profitable practices with established revenue streams and skilled staff are exactly what buyers are searching for in Washington. The demand is not just for large-scale operations. Well-managed solo and small group practices are also attractive targets, especially for buyers looking to enter a specific geographic area or specialty like hand therapy. The key is presenting your practice’s story and its potential in a way that resonates with these buyers.
Timing your practice sale correctly can be the difference between average and premium valuations.
The Sale Process Explained
Selling your practice might seem like a complex journey, but it follows a clear path. Understanding the steps can help you feel more in control. We find that most owners are not ready to sell today. They are thinking about it for two to three years from now. That is the perfect time to start planning.
Here is a simplified look at the stages:
1. Preparation and Valuation. This is the foundational step. We help you understand your practice’s true worth by analyzing your finances and preparing for buyer review.
2. Confidential Marketing. We do not just list your practice. We run a professional process, reaching out to our network of qualified buyers confidentially to create interest.
3. Negotiation and Offers. With multiple interested parties, you are in a stronger position to negotiate the best price and terms.
4. Due Diligence and Closing. This is where many deals face challenges. A buyer will verify all the information about your practice. Being prepared for this intense review is critical to prevent delays or a failed transaction.
A comprehensive valuation is the foundation of a successful practice transition strategy.
How is a Practice Valued?
You might hear that therapy practices sell for a multiple of revenue, often between 0.5x to 2.5x. A more accurate method looks at profitability. For smaller practices, this is usually Seller’s Discretionary Earnings (SDE), with multiples ranging from 1x to 4x. Sophisticated buyers, like private equity firms, look at Adjusted EBITDA. This figure shows your practice’s core profitability by adding back owner-specific expenses and normalizing salaries. A practice owner might think their business is not worth enough to sell. But most practices are undervalued until their financials are properly adjusted. Presenting a clear picture of your true earnings is the most important factor in securing a premium valuation.
The due diligence process is where many practice sales encounter unexpected challenges.
Life After the Sale
The moment you sign the closing documents is not the end of the story. Planning for what comes next is just as important as planning for the sale itself. The right transition plan protects your legacy, your staff, and your financial future. It addresses the common fear of losing control of the practice you built.
Here are some key areas to consider with your advisor.
| Consideration | Why It Matters |
|---|---|
| Your Transition Role | Defines your commitment. You might stay on for a set period to ensure a smooth handover. |
| Staff Security | A structured plan for retaining your team provides stability for them and the new owner. |
| Deal Structure | How the sale is structured directly impacts your final take-home pay after taxes. |
| Protecting Your Legacy | A good partner will be committed to maintaining the quality of care and culture you established. |
Thinking about these elements early in the process ensures your personal and financial goals are met.
The structure of your practice sale has major implications for your after-tax proceeds.
Your Next Step
Every practice owner’s situation is unique. Your goals, your timeline, and your vision for the future of your practice should drive your strategy. Whether you are ready to sell now or just starting to think about your options, understanding the landscape is the first step.
Every practice sale has unique considerations that require personalized guidance.
Frequently Asked Questions
What is the current market like for Occupational and Hand Therapy practices in Washington?
The market in Washington is strong with diverse buyer interest including local expanding practices, regional healthcare systems, and private equity firms. This competition among buyers can lead to better valuations and more favorable deal terms for sellers.
What should I do to prepare my Occupational or Hand Therapy practice for sale?
Preparation involves improving cash flow by efficient billing and collections, reviewing and cutting non-essential expenses, and demonstrating growth through secondary revenue sources like telehealth or specialized classes. Also, assembling a professional team including an accountant, lawyer, and an M&A advisor is crucial.
How important is confidentiality during the sale process?
Confidentiality is critical to avoid unsettling staff or patients prematurely. The sale process is managed privately, sharing information only with serious, vetted buyers under non-disclosure agreements to protect your practice’s stability.
How is the value of my Occupational or Hand Therapy practice determined?
Practice valuation is often based on profitability metrics like Seller’s Discretionary Earnings (SDE) with multiples from 1x to 4x for smaller practices, or Adjusted EBITDA for larger buyers such as private equity. Properly adjusting financials to reflect true earnings is key to securing a premium valuation.
What should I consider for life after selling my therapy practice?
Planning post-sale involves deciding your transition role, securing staff retention plans, structuring the deal for tax efficiency, and protecting your practice legacy by ensuring the new owner maintains care quality and culture. Early planning helps meet personal and financial goals smoothly.