The market for occupational and hand therapy is expanding, creating significant opportunities for practice owners in Wisconsin. If you are considering the next chapter for your career and your business, understanding the sale process is the first step. Selling your practice is one of the most important financial decisions you will ever make. This guide offers a clear overview of the market, key steps, and valuation insights to help you navigate the path to a successful transition.
Market Overview
Nationally, the occupational and hand therapy sector is thriving, with projections showing steady growth year over year. This upward trend is driven by consistent demand for specialized therapy services. For practice owners in Wisconsin, this national strength translates into a positive local climate for a potential sale.
This healthy market means that buyers, from local practices looking to expand to larger healthcare groups, are actively seeking established, profitable therapy practices. Your deep community roots and patient relationships in Wisconsin are valuable assets in this environment. The key is knowing how to present that value to the right audience.
Key Considerations Before You Sell
Moving toward a sale requires careful thought and planning. It goes beyond just the numbers. Here are three major factors every Wisconsin therapy practice owner should consider.
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Maintain Strict Confidentiality. News of a potential sale can create uncertainty among your staff and patients. A successful process requires keeping the exploration confidential until the right moment. This protects your practice’s stability and your negotiating position.
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Prepare Your Practice for Scrutiny. Buyers look for clean, organized businesses. This is the time to organize your financial records, trim unnecessary expenses, and document your operational procedures. A well-run practice is a more valuable practice.
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Understand the Buyer Landscape. The right buyer for you depends on your goals. Are you looking to sell to another local therapist, a regional hospital system, or a private equity group? Each buyer type has different motivations and will structure a deal differently. Knowing the field is a major advantage.
Market Activity
The current market for therapy practices in Wisconsin is not just active. It is diverse. We see local and regional therapy groups looking to expand their footprint by acquiring smaller, well-run practices. Hospitals and larger healthcare systems are also in the market, aiming to integrate therapy services into their patient care continuum.
More recently, private equity firms have shown a strong interest in the occupational and hand therapy space. They are drawn to the stable revenue and non-discretionary nature of the services you provide. These buyers often bring significant resources and can offer premium valuations, but their process is rigorous. Understanding what these different buyers are looking for is critical to positioning your practice for the best possible outcome.
The Sale Process at a Glance
Selling a practice is a structured process, not a single event. While every sale is unique, it generally follows a clear path from preparation to closing. Understanding these stages can help you feel more in control of the journey.
| Phase | What It Means for You |
|---|---|
| 1. Preparation & Valuation | Gathering financial documents, understanding your practice’s true value, and defining your personal goals for the sale. |
| 2. Confidential Marketing | A targeted and confidential outreach to a curated list of potential, qualified buyers without alerting staff or competitors. |
| 3. Buyer Negotiation | Receiving and evaluating offers, negotiating key terms, and selecting the best partner for your practice’s future. |
| 4. Due Diligence | The chosen buyer conducts a deep review of your financials, operations, and legal standing. This is where preparation pays off. |
| 5. Closing & Transition | Finalizing legal documents, transferring ownership, and executing the plan for a smooth transition for you, your staff, and your patients. |
How Your Practice is Valued
A common question we hear is, “What is my practice worth?” The answer is more than a simple formula. Sophisticated buyers don’t value your practice based on your equipment or revenue. They value it based on its consistent, predictable cash flow. The key metric here is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
Think of Adjusted EBITDA as your practice’s true annual profitability. It’s your net income after adding back owner-specific personal expenses, one-time costs, and any above-market owner salary. This adjusted number is then multiplied by a specific factor (the “multiple”) to determine your practice’s enterprise value. This multiple is not fixed. It rises and falls based on your practice’s size, growth rate, provider diversity, and location within Wisconsin. Getting this calculation right is the foundation of a successful sale.
Planning for Life After the Sale
A successful transaction is about more than just the final price. It is also about setting up a smooth transition for your legacy, your team, and your own financial future. Planning for these elements ahead of time is just as important as the sale itself.
Your Team and Legacy
Your staff and patients are the heart of your practice. A key part of any deal is negotiating a transition plan that ensures their continued success and maintains the quality of care you worked so hard to build. This protects your legacy and provides peace of mind.
Your Financial Next Steps
The structure of your sale has major implications for your after-tax proceeds. Decisions made during negotiations around deal structure such as an asset sale versus an entity sale, or the use of earnouts and rollover equity will directly impact your financial outcome. Proper tax planning is not an afterthought. It is a core part of the deal strategy.
Frequently Asked Questions
What is the current market outlook for selling an Occupational & Hand Therapy practice in Wisconsin?
The market for occupational and hand therapy practices in Wisconsin is expanding, with steady national growth driving strong local demand. Buyers include local therapy groups, hospitals, and private equity firms, creating diverse opportunities for sellers.
What are the key considerations before selling my therapy practice in Wisconsin?
Important factors include maintaining strict confidentiality during the sale process to protect your practice’s stability, preparing your financial records and operations for buyer scrutiny, and understanding the different types of buyers and their motivations.
How is the value of my Occupational & Hand Therapy practice determined?
Practice value is primarily based on Adjusted EBITDA, which reflects the true annual profitability after adjusting for owner-specific expenses and one-time costs. This figure is then multiplied by a factor that varies based on practice size, growth, provider diversity, and location in Wisconsin.
What steps are involved in the sale process of a therapy practice in Wisconsin?
The sale typically follows five phases: 1) Preparation & Valuation, 2) Confidential Marketing, 3) Buyer Negotiation, 4) Due Diligence, and 5) Closing & Transition. Each stage requires careful planning and execution for a successful sale.
How should I plan for life after selling my therapy practice?
Planning involves ensuring a smooth transition for your team and patients to protect your legacy, and making tax-efficient decisions regarding deal structure. Consider the impact of asset versus entity sales and options like earnouts or rollover equity on your financial outcome.