Guide to Selling Your Therapy Practice: Important Steps and Considerations

Building a private practice is an investment of your time and your money.  You’ve poured your hopes and dreams into making something you’re proud of, and now, if you’ve been strategic about it, it might just be a marketable business that you can sell. It’s likely that if you’ve worked hard at your group practice, it has become a familiar place in your community for both clients seeking services and other therapists wanting a place to work and it provides value to others.

Many therapists are making the decision to sell their practices, often to larger groups or companies.  But why would they want to sell? There are many reasons a therapist might want to sell their practice.  

1. Typically, the biggest reason for selling is because they’re ready for retirement. The practice owner has decided to sell instead of close their practice.
2. They may be moving to a new state or country and have decided not to maintain their practice from a distance.
3. They’re wanting to cut back on the time and energy they devote to their practice but it’s thriving.  Maybe they only want to work virtually, or part-time, but they still have many clients who want to come to the office and their practice typically stays full.
4. They’re ready for something different.  Maybe they’ve developed other streams of income, such as coaching or courses or maybe they are burned out and ready to start a new career.

Regardless of the reason, as a practice owner moves toward listing their practice for sale, there are some important things to consider:

1. Make sure to have the right team in place to guide you through this process.  Here’s a few advisors who can be hired to assist with the process.

• Certified Public Accountant (CPA) – A CPA can assist them with gathering the appropriate financial information that will be needed to demonstrate owners, value, and fiscal responsibility.
• Business Broker.  A broker can help with advertising the practice and help with finding buyers.   They may also assist with business valuations (determining what the practice is worth) and help with negotiations when an offer is made. Typically, Business Brokers charge a fee for this service, such as a percentage of the sale price.
• Attorney – An attorney can represent the seller to ensure they are protected legally throughout the process.  They can draw up contracts, and review offers provided by potential buyers to ensure it’s in their client’s best interest.

2. Gather important documents related to the business.  Business licenses and any permits, contracts with outside entities and staff, rental agreements, and the last few years of tax returns will be needed for the seller’s portfolio. If the seller owns the building and property from which their practice operates, then they’ll need to also gather the paperwork related to that ownership.

3. Make an inventory of business assets, such as furniture, electronics, etc. Typically, these will belong to the practice if they were purchased with business funds and will be negotiated as part of the sale.

4. There will need to be a determination of the value of the practice so that the seller (and buyer) can gauge whether the asking price and the offer for purchase is realistic.  This is where a CPA or business broker can be helpful.

5. Establish an asking price. This is the beginning amount to start negotiations for sales.

6. While waiting for the sale, keep personal and business accounting and purchases separate.  

7. Consider converting any paper records to electronic versions to make the practice more marketable while they are waiting to sell.  This will make the practice more attractive to buyers and easier to transition to the new buyer. 

8. Once the practice goes “on the market” the therapist owner may want to consider reaching out to potential buyers, such as larger practices or companies, and letting them know the practice is for sell. They may be interested in purchasing your practice. The practice can also be listed in online sites geared towards business sales such as BizBuySell, 

9. Treat it like a business because it is.  It’s hard to let go of something that you’ve invested your life into, but in the end, a buyer is purchasing a business.  It can be uncomfortable to many therapists focusing on the business side of things when there are important memories of “firsts” tied to their practice, such as when they first opened their practice, received their first client, got on their first insurance panel, hired their first clinician and more. If there are important things that you wanted honored by the new owners, such as the name, logo, staff, etc. then make those clear in the beginning.  It may also be helpful to seek your own counseling as you begin to prepare to let go. 

10. Don't rush the process.  It can be tempting to take the first offer made but be sure it’s the offer you can walk away and feel good about.

11. Consider options for transitioning to the new owner. Sometimes sellers work out agreements to stay on as consultants or work part-time in the practice for a few months to a year.

Congratulations on building something of value to your community and best wishes as you move forward to the next chapter of your journey!