Selling your Occupational Therapy practice is one of the most significant financial decisions you will ever make. For owners in Connecticut, navigating today’s dynamic market requires more than just finding a buyer. It demands a clear understanding of your practice’s true worth and a strategy to achieve it. Proper preparation before you sell can dramatically change your final outcome. This guide provides a clear overview of the landscape, process, and key factors for a successful transition.
Market Overview
The market for Occupational Therapy practices in Connecticut is strong. Demand for OT services is robust, supported by the state’s demographics and a well-established healthcare ecosystem. Buyers are actively looking for well-run practices to gain a foothold or expand their presence in the New England region. They see the value in established referral networks and skilled clinical teams.
This interest comes from two main groups: strategic buyers and financial buyers. Strategic buyers are often other therapy companies that want to grow their geographic footprint. Financial buyers, like private equity groups, see the stability and growth potential in healthcare services. This competition is good news for sellers. It means that a practice positioned correctly can attract multiple offers and achieve a premium valuation.
Key Considerations for Connecticut OT Practices
Buyers look beyond your top-line revenue. They dig into the quality and sustainability of your operations. In Connecticut, several factors are particularly important:
- Your Referral Network. How strong and diverse are your relationships with local pediatricians, school districts, orthopedic groups, and hospitals? A documented, consistent flow of referrals is a major asset.
- Your Payer Mix. A healthy balance between commercial insurance, private pay, and state-funded programs like Husky Health is attractive. Buyers want predictable, reliable reimbursement.
- Your Clinical Team. A stable, licensed, and experienced team of OTs that doesn’t rely on a single person (especially you) is a huge plus. It signals to a buyer that the business can run smoothly through a transition.
- Your Niche Services. Do you have a strong reputation in a specialty like hand therapy, sensory integration, or assistive technology? Differentiated services command higher interest and value.
Market Activity
We are seeing significant activity from buyers looking specifically in Connecticut. They are not just buying a business; they are buying a strategic asset. Larger, multi-location practices with strong earnings are viewed as “platform” investments a base from which a buyer can grow. These often command the highest valuations.
But smaller, single-location practices are also highly sought after as “tuck-in” acquisitions. A larger group may want to acquire your practice to enter a new town or add a specialty service they lack. For them, your established patient base and reputation are worth a premium. Buyers pay for proven success and a clear path to future growth. Your job is to make that path as clear as possible before you ever go to market.
The Path to a Successful Sale
Selling a practice follows a structured path. Understanding the key phases helps you prepare for what lies ahead.
Phase 1: Preparation and Valuation
This is the most important step. It happens months before your practice is shown to anyone. Here, we work with you to clean up your financial records, analyze your operations, and determine an accurate and defensible valuation. This is where you build the story that will attract the best buyers.
Phase 2: Confidential Marketing
Your practice is presented to a curated list of qualified buyers without revealing its identity. This protects your staff, patients, and referral sources. We manage all communications, field initial questions, and bring qualified, interested parties to the table for serious discussions.
Phase 3: Diligence and Closing
Once you accept an offer, the buyer will begin due diligence. This is a deep dive into your financials, contracts, and operations to verify everything. This is where many deals encounter problems if the initial preparation was weak. With proper guidance, it becomes a smooth validation process leading to the final legal paperwork and a successful closing.
What Is Your Practice Really Worth?
A common question we hear is, “What’s the formula for my practice’s value?” It’s less of a formula and more of a two-part equation. First, we determine your practice’s true annual cash flow, called Adjusted EBITDA. This isn’t just the profit on your tax return. It’s your earnings before interest, taxes, depreciation, and amortization, with adjustments made for owner-specific expenses like an above-market salary or personal car lease. This gives a clear picture of the practice’s profitability.
Second, that Adjusted EBITDA figure is multiplied by a number called a “valuation multiple.” This multiple, which might range from 3x to over 7x, reflects the market’s perception of your practice’s risk and future opportunity. A practice that can run without the owner, has diverse referral sources, and a strong team will receive a much higher multiple than one completely dependent on its founder.
Planning for Life After the Sale
A successful sale isn’t just about the price you get. It’s about structuring a deal that aligns with your personal, professional, and financial goals for the future. You need to consider what happens the day after the transaction closes. Protecting your legacy and ensuring a smooth transition for your team are critical parts of the plan.
Here are a few key elements to consider:
| Consideration | Common Structures | Why It Matters |
|---|---|---|
| Your Role | A 1 to 3 year employment or consulting agreement. | Ensures a smooth handover and is often tied to your full payout. |
| Staff & Legacy | Retention bonuses and new career paths for your team. | Protects the practice’s most important assetits people. |
| Your Payout | A mix of cash at close, an earnout, and rollover equity. | Balances immediate security with long-term wealth creation. |
Frequently Asked Questions
What is the current market like for Occupational Therapy practices in Connecticut?
The market for Occupational Therapy practices in Connecticut is strong with robust demand supported by the state’s demographics and healthcare ecosystem. Buyers include strategic therapy companies and financial groups eager to invest, leading to competitive offers and potential premium valuations.
What factors do buyers consider important when evaluating an Occupational Therapy practice in Connecticut?
Buyers look at the quality and sustainability beyond revenue, focusing on your referral network, payer mix, stability and experience of your clinical team, and any niche specialty services you offer, such as hand therapy or sensory integration.
What are the key phases involved in selling an Occupational Therapy practice in Connecticut?
Selling involves three key phases: 1) Preparation and Valuation to clean up records and establish value, 2) Confidential Marketing to present the practice discreetly to qualified buyers, and 3) Diligence and Closing where buyers verify records leading to legal closing of the sale.
How is the value of an Occupational Therapy practice determined?
Value is calculated by determining your true annual cash flow (Adjusted EBITDA) — earnings before interest, taxes, depreciation, and amortization adjusted for owner-specific expenses — then multiplying by a valuation multiple, typically between 3x to over 7x, based on risk and growth potential.
What should I consider for life after selling my Occupational Therapy practice?
Post-sale planning should align with your personal and financial goals. Consider your ongoing role (employment or consulting agreement), staff retention and legacy protection, and structuring your payout via a mix of cash, earnout, and rollover equity for balanced immediate and long-term benefits.