Selling your physical therapy practice is one of the most important financial decisions you will ever make. The process involves more than market dynamics. It is a personal and professional transition that requires careful planning. For owners in Nebraska, the current market presents unique opportunities, but success depends on strategic preparation and a clear understanding of what buyers are looking for. This guide offers insights to help you navigate the path ahead.
Proper preparation before selling can significantly increase your final practice value.
The Nebraska PT Market: What You Should Know
The market for physical therapy practices in Nebraska is active. Demand is driven by an aging population, a focus on outpatient care, and continued interest from both local and regional buyers looking to expand their footprint. This creates a favorable environment for practice owners who are ready to sell. However, buyers are selective. They are looking for well-run, profitable clinics with a strong foundation for future success.
To stand out in the Nebraska market, your practice should ideally demonstrate a few key attributes:
- Consistent Revenue Growth: Buyers want to see a history of stable and increasing revenue.
- Diverse Referral Sources: A healthy mix of referrals from physicians, chiropractors, sports teams, and direct patient access reduces risk.
- Efficient Operations: Clean billing practices and strong patient outcomes show that your practice runs smoothly.
- A Strong Brand: The practice’s reputation should extend beyond you as the owner.
Key Considerations Before You Sell
Before you even think about putting your practice on the market, the most important work begins. Buyers will conduct thorough due diligence, and being prepared is the best way to protect your valuation. You should focus on organizing your financial records, ensuring at least three years of clean statements are ready for review. It is also important to assess your clinic’s referral diversity. If most of your patients come from a single source, a buyer will see that as a risk. Finally, consider your practice’s owner dependence. A business that can thrive without your daily presence is much more valuable and shows a buyer that continuity of care is secure. Many owners start this process two or three years before a sale. That is the right timeframe to make changes that meaningfully increase your practice’s worth.
The structure of your practice sale has major implications for your after-tax proceeds.
Market Activity: Who is Buying and Why
The consolidation trend seen nationally is also present in Nebraska. This means there are several types of buyers interested in acquiring successful physical therapy practices. Understanding who they are and what they want is key to positioning your practice correctly.
Who is Buying?
Buyers typically fall into a few categories: larger regional therapy groups looking to enter or expand in the Nebraska market, private equity-backed platforms building a national presence, and sometimes, local competitors seeking to grow by acquisition. Each buyer has a different vision, from preserving your local brand to integrating you into a larger corporate structure.
What Are They Looking For?
Regardless of type, all sophisticated buyers look for growth potential. They are not just buying your past performance. They are paying for future opportunity. They want to see a clear path to increasing revenue, whether it is by adding new services, opening another location, or optimizing your current operations. A practice that has demonstrated an ability to scale is always more attractive.
Finding the right type of buyer for your practice depends on your specific goals.
The Four Stages of a Practice Sale
Selling a practice can feel like a complex journey. We find it helpful to think of it in four main stages. The first is Preparation, where you organize your financials and operations to maximize value. This is the work you do long before a buyer is involved. The second stage is Marketing, where your advisor confidentially presents the opportunity to a curated list of qualified buyers. The goal is to create a competitive environment.
The third stage is Negotiation and Due Diligence. This is where offers are evaluated and a buyer is selected. The due diligence phase is often where deals face challenges, as the buyer verifies every detail of your practice. The final stage is Closing, which involves finalizing legal documents and officially transferring ownership. Navigating these stages smoothly requires a clear plan and experienced guidance to avoid common pitfalls.
The due diligence process is where many practice sales encounter unexpected challenges.
How Your Physical Therapy Practice is Valued
Many owners ask us, “What is my practice worth?” The answer is based less on assets and more on profitability. The key metric used to value a physical therapy practice is Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure represents your practice’s true cash flow by adding back owner-specific or one-time expenses to your net income.
This Adjusted EBITDA is then multiplied by a “multiple” to determine the practice’s enterprise value. The multiple isn’t a fixed number. It changes based on risk and opportunity.
| Factors That Increase Your Multiple | Factors That Decrease Your Multiple |
|---|---|
| Multiple providers and locations | High reliance on a single owner/therapist |
| Diverse mix of insurance and cash pay | Heavy dependence on one payer (e.g., Medicare) |
| Strong, documented growth history | Inconsistent or declining revenue |
| Multiple, consistent referral sources | A single, dominant referral source |
Calculating the correct Adjusted EBITDA and arguing for the highest possible multiple is where professional guidance can dramatically change the outcome of your sale.
A comprehensive valuation is the foundation of a successful practice transition strategy.
Life After the Sale: Planning Your Transition
The sale of your practice is not the end of the story. The terms you negotiate for your own future are just as important as the sale price. Most transactions include a Post-Sale Employment Agreement for the owner, often lasting two to five years. This agreement details your compensation, role, and responsibilities under the new ownership. It is important that these terms align with your personal and professional goals.
You should also be prepared to negotiate a Non-Compete Clause, which will likely restrict you from practicing or owning another clinic in the same area for a set period. Finally, a portion of the sale price, typically 5 to 10 percent, may be held in an Escrow Account for one to three years to cover any unforeseen issues. Planning for these post-sale realities from the beginning ensures your transition is as successful as the sale itself.
Your legacy and staff deserve protection during the transition to new ownership.
Frequently Asked Questions
What factors can increase the value multiple of my Physical Therapy practice in Nebraska?
Factors that can increase your practice’s multiple include having multiple providers and locations, a diverse mix of insurance and cash payers, a strong and documented growth history, and multiple, consistent referral sources.
How far in advance should I start preparing my Physical Therapy practice for sale?
Many owners begin preparing their practice two or three years before the intended sale date. This timeframe allows for meaningful changes that increase the practice’s worth, such as organizing financial records, diversifying referral sources, and reducing owner dependence.
What types of buyers are typically interested in Physical Therapy practices in Nebraska?
Buyers usually include larger regional therapy groups expanding in Nebraska, private equity-backed platforms aiming to build a national presence, and local competitors looking to grow through acquisition. Each buyer may have different goals, from preserving local brand identity to integrating into a larger corporate structure.
What is Adjusted EBITDA, and why is it important in valuing my Physical Therapy practice?
Adjusted EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It represents the true cash flow of your practice by adding back owner-specific or one-time expenses to net income. This figure is critical because it is multiplied by a market multiple to determine your practice’s enterprise value.
What should I expect regarding post-sale employment and legal agreements?
After the sale, most transactions include a Post-Sale Employment Agreement lasting two to five years, which outlines your compensation, role, and responsibilities under new ownership. You will likely need to negotiate a Non-Compete Clause restricting you from practicing nearby for a set period. Additionally, 5 to 10 percent of the sale price may be held in an Escrow Account for one to three years to handle unforeseen issues.