Selling your school and community-based ABA practice in Colorado presents a unique opportunity. The market is defined by growing demand and legislative support, but also complicated by rising costs and funding questions. Understanding how to navigate this landscape is the key to a successful exit. This guide provides the strategic insights you need to make an informed decision and prepare your practice for its next chapter.
A Market of Opportunity and Challenge
The story of the Colorado ABA market is one of dualities. On one hand, demand for your services has likely never been higher. A new state law is opening doors for ABA providers to offer therapy directly within schools, tapping into a critical need. This legislative tailwind places well-run, community-integrated practices in a very strong position.
On the other hand, the operational realities can be tough. We’ve seen operational costs for providers in Colorado increase by roughly 30%. At the same time, challenges with state Medicaid funding persist, creating revenue uncertainty. For a potential buyer, seeing a practice that has successfully navigated these financial pressures is a massive vote of confidence. It proves your business model is resilient.
3 Key Factors That Drive a Successful Sale
When we talk with buyers, they are looking beyond the numbers. They want to see a sustainable, high-quality operation. For a school and community-based ABA practice in Colorado, three areas stand out.
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Your Community and School Integration. Your established relationships with local schools are now a strategic asset due to new legislation. A buyer isn’t just acquiring a practice. They are acquiring access. Showcasing how deeply embedded you are in the community and how you can leverage these new school-based opportunities is a powerful selling point.
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A Strong, Stable Team. Staff burnout is a known industry challenge. A practice that can demonstrate low turnover and a positive work culture is significantly more valuable. Buyers see this as a sign of operational maturity and reduced risk. Highlighting your experienced therapists and collaborative approach proves you have a team that can carry the legacy forward.
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A Data-Driven Story of Success. Your model’s strength is its ability to help children generalize skills in real-world settings. Buyers want to see this. Compiling anonymized data on client outcomes, retention rates, and the success of your personalized programs provides concrete proof of your practice’s impact and effectiveness.
What We’re Seeing in the M&A Market
You may be thinking about selling in two or three years, not right now. That is the perfect time to start preparing. Buyers pay for proven performance, not just potential. The broader pediatric therapy market is active. We saw this when Proven Behavior Solutions acquired Prism Autism Education & Consultation to expand its footprint. This shows that strategic buyers and private equity groups are eager to partner with strong, regional ABA practices. For sellers, this competition can drive premium valuations. The value of these practices is often discussed in terms of a multiple of Adjusted EBITDA, which typically ranges from 3x to 6x. The key is that the highest multiples don’t go to the practices that simply list themselves for sale. They go to those who have prepared their financials and operations to tell a compelling growth story.
Understanding the Sale Process
Selling your practice is not a single event. It is a structured process. Thinking about it in distinct phases can make it more manageable.
Phase 1: Preparation and Positioning
This is the most important phase, and it starts long before you go to market. It involves getting your financial records in order, clarifying your practice’s unique growth story, and understanding what your practice is truly worth. This is where you move from having messy QuickBooks to having clear, buyer-ready financials.
Phase 2: Confidential Marketing
You don’t want to just “list” your practice for sale. The goal is to find the right strategic partner who will protect your legacy and your team. We run a confidential process to identify and approach a curated list of qualified buyers. This creates competitive tension to ensure you get the best possible terms, not just the first offer that comes along.
Phase 3: Due Diligence and Closing
Once you agree to terms with a buyer, they will begin a deep dive into your practice. This is the due diligence phase. They will review everything from your financials and client contracts to your staff credentials and compliance procedures. Being well-prepared for this phase can prevent surprises and keep the deal on track to a successful close.
How Your ABA Practice is Valued
A common mistake owners make is looking at their net income and thinking that is what their practice is worth. Buyers, however, value your practice based on its true cash flow, a metric called Adjusted EBITDA. This starts with your earnings but adds back things like owner’s excess salary, personal expenses run through the business, and other one-time costs. This adjusted number gives a truer picture of the practice’s profitability.
That Adjusted EBITDA is then multiplied by a number (the multiple) to determine your practice’s Enterprise Value. That multiple is not random. It depends on your practice’s specific characteristics and risks.
| Factor | Lower Multiple (e.g., 3.0x) | Higher Multiple (e.g., 6.0x) |
|---|---|---|
| Provider Model | Heavily reliant on the owner | Associate-driven with multiple BCBAs |
| Payer Mix | High concentration of Medicaid | Diverse mix of commercial insurance |
| Growth | Stagnant or declining revenue | Consistent, documented growth |
| Systems | Basic, manual operations | Professionalized systems and clear data |
Most practices are undervalued until their EBITDA is properly normalized and their story is framed for buyers.
Planning for Life After the Sale
The transaction is not the end of the journey. A successful exit plan considers what happens on day one after the closing. For many owners we work with, protecting their legacy is just as important as the sale price.
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Securing Your Team’s Future. A key part of finding the right buyer is finding one who shares your values and will take care of the team you built. This is often a major point of negotiation, ensuring your staff have a secure and positive future.
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Structuring Your Role. Selling does not always mean walking away. Many deals include an “equity rollover,” where you retain a stake in the larger company, giving you a second potential payday when that company sells. Deals can also include “earnouts,” where you receive additional payments for hitting performance targets post-sale. These structures can keep you involved, but they need to be negotiated carefully.
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Maximizing Your Net Proceeds. The headline price is not what you put in the bank. The structure of your sale has major tax implications. Planning ahead with a team that understands tax-efficient sale structures can significantly increase your final take-home proceeds.
Your legacy deserves to be protected. Thinking through these issues early is the best way to ensure a smooth transition for you, your team, and your clients.
Not sure if selling is right for you?
Frequently Asked Questions
What makes the Colorado market attractive for selling a school and community-based ABA practice?
The Colorado ABA market is attractive due to growing demand and new legislative support allowing ABA providers to offer therapy directly within schools. This creates strong strategic value for practices deeply integrated in local communities and schools.
What are the main operational challenges sellers face in Colorado?
Sellers face rising operational costs by about 30% and continuing challenges with state Medicaid funding, which create revenue uncertainties. Demonstrating the ability to manage these financial pressures is crucial to winning buyer confidence.
What key factors do buyers consider when purchasing an ABA practice in Colorado?
Buyers look for: 1) Strong integration with local schools and community, 2) A stable, experienced, and low-turnover team, and 3) A data-driven track record showing client success and practice effectiveness through measurable outcomes.
How is the value of an ABA practice determined in Colorado?
Value is based on Adjusted EBITDA, which normalizes earnings by adding back owner’s excess salary and one-time costs, then multiplied by a multiple ranging from about 3x to 6x. The multiple depends on factors like how owner-dependent the practice is, payer mix, growth trends, and professionalism of systems.
What should sellers plan for after the sale of their ABA practice?
Sellers should plan for securing their team’s future with a buyer that shares their values, structuring their continuing role through equity rollover or earnouts if desired, and maximizing net proceeds by carefully planning tax-efficient sale structures. Protecting their practice legacy is a key consideration.