If you are a Wisconsin Occupational Therapy practice owner, selling your business is one of the most significant financial decisions you will make. This guide provides a clear roadmap. We will cover the local market landscape, key steps to make your practice more attractive to buyers, and how to understand its true value. Proper preparation is the foundation of a successful exit, and it starts with having the right information.
Not sure if selling is right for you?
Market Overview
The market for Occupational Therapy practices in Wisconsin is shaped by a stable professional base and growing interest from diverse buyer groups. While specific sales data for OT practices in the state isn’t widely public, we can see clear trends by looking at the broader healthcare landscape. Understanding these dynamics is the first step in positioning your practice for a successful sale.
A Stable Professional Landscape
Wisconsin is home to approximately 3,220 licensed Occupational Therapists. This creates a mature and respected professional community. This stability is attractive to buyers. They see a consistent talent pool and established referral patterns. It signals a healthy, long-term market rather than one based on passing trends.
Who Are the Potential Buyers?
The buyers for a practice like yours are more varied than ever. They typically include other local or regional therapy practices looking to expand their footprint. Hospitals and larger healthcare systems also acquire practices to broaden their service lines. Increasingly, we see private equity firms and other financial investors entering the market. They are looking for well-run practices to use as a platform for growth. Each buyer type has different goals and will value your practice differently.
Key Considerations for a Successful Sale
Before you even think about a price, there are foundational elements you need to address. Buyers scrutinize a practice from top to bottom. Getting your house in order now not only makes for a smoother process but can directly increase your final sale price. This is often where we see owners who start preparing a year or two before selling achieve the best outcomes.
One of the most important tasks is to get your financial records organized. Buyers expect to see at least three years of clean, clear financial statements. Disorganized books are a major red flag and can prolong the due diligence process or even kill a deal. At the same time, maintaining confidentiality is critical. A premature announcement can disrupt your staff and cause clients to worry. You must manage the flow of information carefully. Finally, ensure you are fully compliant with the Wisconsin Occupational Therapists Affiliated Credentialing Board regulations. For example, you are selling the assets of your business, not your actual license to practice.
Current Market Activity and Trends
The market for healthcare practices is active, driven by a few key trends. Understanding them can help you decide if now is the right time to explore a sale. While you won’t find many Wisconsin OT practices listed publicly, the private market is busy. Here is what we are seeing behind the scenes:
- Consolidation is a major theme. Larger therapy groups and regional health systems are actively acquiring smaller, successful practices to gain market share and achieve economies of scale. Being a part of a larger group can provide stability and resources that are hard to build on your own.
- Private equity brings a new dynamic. Financial buyers are interested in the consistent cash flow and growth potential of therapy practices. They often seek to partner with owners, providing capital for expansion while the owner continues to run the clinical side. This can be an attractive option for owners who aren’t ready to retire completely.
- Specialization creates premium value. Practices with a strong reputation in a specific niche, like pediatrics, geriatrics, or hand therapy, are highly sought after. Buyers are willing to pay more for a business that is the clear leader in a specific segment of the market.
The predictable stages of a sale
Once you decide to move forward, the sale process follows a structured path. It is not something that happens overnight. The entire journey, from preparation to closing, often takes several months. Thinking of it as a series of manageable stages can make it feel less intimidating.
It begins with preparation and valuation, where you work with advisors to understand your practice’s worth and prepare a comprehensive selling memorandum. This document is like a professional brochure for your business. Next, your advisor confidentially markets the practice to a curated list of potential buyers. Once interest is generated, you will receive Letters of Intent (LOI), which are non-binding offers. You negotiate the best offer and then enter the due diligence phase. This is where the buyer verifies all the financial and operational details of your practice. It is the most intensive part of the process. Once due diligence is complete, lawyers finalize the Asset Purchase Agreement, and the deal is closed.
What Is Your Practice Really Worth?
One of the first questions every owner asks is, “What is my practice worth?” The answer is more complex than a simple formula. A practice’s value is typically calculated as a multiple of its Seller’s Discretionary Earnings (SDE). SDE is essentially the total cash flow available to you as the owner. It includes net income plus your salary, and any personal expenses run through the business.
However, the multiple applied to that SDE can vary widely. It is not just about your specialty. It is about the quality and risk associated with your earnings. A practice that is well-managed, has diverse revenue streams, and is not entirely dependent on the owner will command a higher multiple than one that is not. An expert valuation is critical to not just find a number, but to tell the story of your practice in a way that sophisticated buyers understand.
Factors That Influence Your Valuation Multiple
| Factor | Impact on Value |
|---|---|
| Provider Reliance | A practice that relies on multiple therapists, not just the owner, has lower risk and receives a higher multiple. |
| Revenue Streams | Diversified income beyond client services (e.g., workshops, product sales) shows resilience and earns a higher multiple. |
| Financial Records | Clean, organized financials for at least three years inspire buyer confidence and support a higher multiple. |
| Growth Potential | A clear path for growth, like an underserved local market or an opportunity for new services, justifies a higher multiple. |
Life After the Sale
The day the sale closes is not the end of the story. It is the beginning of a new chapter for you, your staff, and your legacy. Planning for this transition is just as important as planning for the sale itself. Your role after the sale will be defined in the purchase agreement. Many buyers want the selling owner to stay on for a transition period, typically six months to a year, to ensure a smooth handover of relationships with clients and referral sources.
You also need to consider your team. A key part of a successful transition is communicating the change to your employees at the right time and in the right way. Most buyers want to retain your talented staff, and a well-structured plan can protect their futures. Finally, think about the financial outcome. The way a deal is structured has major implications for the amount you keep after taxes. A little planning on the front end can make a significant difference in your net proceeds, securing your financial future and the legacy you have worked so hard to build.
Frequently Asked Questions
What is the current market landscape for selling an Occupational Therapy practice in Wisconsin?
The market in Wisconsin is stable, supported by approximately 3,220 licensed Occupational Therapists, creating a mature professional environment attractive to buyers. Diverse buyers include local therapy practices, hospitals, healthcare systems, and private equity firms, each valuing practices differently based on their goals.
What should I do to prepare my Occupational Therapy practice for sale?
Preparation involves organizing at least three years of clean financial statements, maintaining confidentiality about the sale to avoid staff disruption, and ensuring compliance with Wisconsin Occupational Therapists Affiliated Credentialing Board regulations. Starting preparations one to two years in advance often leads to better outcomes.
Who are the typical buyers of Occupational Therapy practices in Wisconsin?
Buyers typically include local or regional therapy groups looking to expand, hospitals and healthcare systems broadening services, and private equity firms seeking well-run practices for growth. Each buyer type has different priorities and will value your practice differently.
How is the value of my Occupational Therapy practice determined?
Practice valuation is usually based on a multiple of Seller’s Discretionary Earnings (SDE), which includes net income, owner’s salary, and business expenses. Factors influencing the multiple include provider reliance, diversified revenue streams, clean financial records, and growth potential. A practice with multiple therapists, diverse income, and strong management commands a higher valuation.
What should I expect during the sale process of my Wisconsin Occupational Therapy practice?
The sale process typically includes preparation and valuation, confidential marketing, receiving Letters of Intent, negotiating offers, a due diligence phase where buyers verify all practice details, and closing with a finalized Asset Purchase Agreement. This process usually takes several months and requires careful planning and professional guidance.
