How to Sell a Medical Practice: A Complete Step-by-Step Guide

Selling your medical practice is likely the most significant financial and professional decision of your career. There are two common exit strategies for medical practices:

• Exiting for retirement or to pursue another venture. A key part of this strategy is securing the capital you need to start the next chapter of your life.

• Bringing on a partner who can handle the business operations while you stay on as the medical provider. Here, you want to make sure you’re partnering with someone who is a good fit for you and your practice, while also getting a fair price for your exit.

Regardless of your exit goals, you want to run a strategic M&A process designed to help you maximize your exit outcomes, which include:

• Your exit timeline
• Your final sale price
• How the deal is structured
• What happens to your practice after your exit

Maximizing those exit outcomes requires having a network of buyers to market your business to, knowing from experience how buyers value medical practices, and taking the time to manage several interested buyers at once (disqualifying those who can’t deliver the exit you want and keeping the ones who can). Finally, you’ll also need to read through the deal agreements, looking closely at the specifics of the deal and how it’s structured.

Most business owners can’t do this on their own. Those who try risk hurting their business operations in the process, which can lower the practice’s value.

That’s why we recommend working with a medical practice M&A advisor who has experience in selling practices like yours. This is especially true for multi-provider practices with EBITDA of $1 million or more.

At Axial, we have over 14 years of experience in mergers and acquisitions, with data from over 3,000 M&A advisors in our network, including those who specialize in medical practice transactions.

For example, we’ve advised all types of practices and healthcare companies, including:

• A $2M in EBITDA psychiatry practice in Bethesda, MD
• A multi-site ophthalmology practice with 8 locations and $15M in revenue across New Jersey
• An autism/ABA therapy clinic in California with 3 clinics plus in-home services that brings in $6.5M revenue per year.
• A medical clinic in Eastern Canada providing Family Health, Private Surgery, and Specialty Services that brings in $35M in revenue.
• A menopause D2C telehealth company that brings in $60M in revenue.

Using this experience, we’ve put together this comprehensive guide to help you achieve your ideal exit.

In this guide, we cover:

• Why medical practice sales fail
• How to know if your medical practice is ready to sell
• How M&A advisors maximize your exit outcomes
• How to find the right M&A advisor for your practice

Why Medical Practice Sales Fail

According to the International Business Brokers Association, 75%–90% of businesses that go to market don’t sell. For medical practices specifically, the challenges are varied, including navigating healthcare-specific complexities that don’t exist in other industries.

Understanding what causes medical practice sales to fail helps you avoid common pitfalls. Based on healthcare transactions in Axial’s network and insights from experienced M&A advisors, these are the most critical mistakes to avoid:

Starting the Exit Process Too Late

Most medical practices reach peak value when they’re still thriving, not when owners are already reducing hours or patient load. Starting your exit too late often results in lower valuations and fewer buyer options.

The more time you give yourself to prepare, the better. Our best advice here is to run your practice as if you’re leading toward your exit. This means giving yourself time to:

• Optimize operations and resolve any outstanding issues
• Reduce key-person dependencies or bring on additional providers
• Document procedures and create systems that demonstrate operational stability
• Address financial preparation requirements (2–3 years of clean, accrual-based accounting records)
• Position the practice attractively by demonstrating consistent revenue growth
• Become a multi-practice provider, if you’re not already

Working with the Wrong M&A Advisor

When finding an M&A advisor, physicians often rely on referrals from colleagues who may have used advisors for different types of transactions, or generic broker searches that don’t account for healthcare expertise.

This approach can lead to working with a firm that:

• Undervalues your practice due to a lack of knowledge of the healthcare market. You need recent experience and relevant industry insight to value a medical practice accurately. If you’re using outdated data, your valuation will be off.

• Struggles to find qualified buyers in the healthcare space. Often, a medical practice will get an offer from a buyer, and that will start them thinking about selling. But accepting the first offer isn’t a strategic way to sell your business. Instead, you can run a competitive bidding process where multiple good-fit buyers are interested in acquiring your practice. This can lead to much more favorable exit outcomes.

• Creates delays due to unfamiliarity with healthcare regulations. Advisors without healthcare experience may underestimate the timeline for provider enrollment and credentialing with insurance payers. Medicare enrollment alone can take 90–120days, and if this isn’t planned for upfront, it can delay the buyer’s ability to bill under their own credentials post-closing. This uncertainty can derail deals or force unfavorable earnout structures. Experienced healthcare advisors know to address credentialing timelines early in the transaction structure, often recommending transition service agreements that protect both parties during the enrollment period.

• Fails to structure deals appropriately for medical practice transactions. For example, Ryan Mingus recently shared how earnouts have been part of most deals in the medical industry. However, in his firm’s experience, earnouts typically shouldn’t represent more than 20% of the total deal. With that kind of industry insight, Mr. Mingus and his team at TUSK Practice Sales can advise on what constitutes a good, competitive deal.

By working with the right M&A advisor, you get the relevant experience and network needed to exit your medical practice successfully.

At Axial, we have a network of over 3,000 M&A advisors and investment banks. Once we learn about your medical practice, we can hand-curate a list of 3–5 M&A advisors with recent and relevant experience in selling medical practices like yours. Then we help you choose the right one, including coming up with questions to ask each M&A advisor to better evaluate whether they’re a good fit. Schedule your free exit consultation today.

How to Know If Your Medical Practice Is Ready to Sell

Before you go to market with an M&A advisor, you can increase your chances of success by confirming that your practice is ready to sell with these two facets:

1. Is your value high enough to attract buyers? Private equity and strategic buyers tend to look for practices with $1M+ EBITDA because those practices usually offer proven management infrastructure, scalability potential, and multiple revenue streams across providers. Generally speaking, this means you’re running a practice with multiple providers, which is attractive to buyers.*
2. Is your practice exit-ready? This includes accurate financials, smooth operations, and a good transition plan that details how medical care will be handled after you step down as owner. Proper financial preparation requires 2–3 years of clean, accrual-based accounting records.

*In our interview with Mr. Mingus, he shared that solo practitioners in high-margin specialties like cosmetic dermatology or ophthalmology with ancillary revenue streams (ASCs, LASIK, cosmetic procedures) can occasionally reach $1M+ EBITDA, but these represent outliers rather than the norm.

How Healthcare M&A Advisors Can Maximize Your Exit Outcomes

When you work with the right M&A advisor, you increase the chances of maximizing your exit outcomes, such as finding a good steward for your practice and getting an exit timeline that works for you. Plus, the data shows that working with an M&A advisor can also result in getting a premium price for your business.

Below, we look at the key things an M&A advisor should do when working to sell your business.

1. They Get You an Accurate Valuation (That You Can Defend)

When physicians try to value their own practices, they typically make one of two mistakes: overvaluing based on emotional attachment, or undervaluing by not understanding what buyers actually pay for.

Based on data from Axial’s network, healthcare transactions show significant variation:

Whether your practice is 2.4x or 5x its EBITDA can change whether or not you want to sell.

Healthcare M&A advisors will use various valuation methods to get the most accurate valuation, including:

1. A discounted cash flow analysis to project your practice’s future cash flows while accounting for seasonal patterns, reimbursement trends, and competitive pressures specific to healthcare.
2. A comparable transaction analysis that examines what similar practices actually sold for — data that’s almost impossible for physicians to access independently because most healthcare transactions remain private.
3. An asset-based valuation that properly values intangible assets like patient loyalty, referral relationships, and clinical reputation — factors that generic business valuations consistently undervalue but healthcare buyers consider critical.

According to Ryan Mingus, valuation misalignment is one of the top reasons deals fall apart, particularly when:

• Practices are evaluated during seasonal low periods
• Key-person dependencies aren’t properly addressed
• Long-term payer contracts are nearing renewal
• Physicians rely on what their colleagues received years ago rather than on current market conditions

If there’s a valuation gap between what you need to sell your business and what you’re likely to get, your advisor can recommend specific improvements to maximize value before going to market, like streamlining operations to improve margins and reducing patient concentration risks.

Here are other resources Axial has written about business valuation:

• How to Value a Company for Sale: 3 Methods + Common Mistakes to Avoid
• How Much Can I Sell My Company For?

2. They Create Competitive Bidding Environments

Most medical practice owners have extremely limited buyer networks. In fact, they typically only hear from:

• Competitors who already know the market and may lowball
• Cold callers from generic acquisition groups
• One or two private equity firms that happened to find them

This puts you in a bad negotiating position with no leverage. You’re essentially negotiating with one or two parties who know you have no other options.

Working with a healthcare M&A advisor flips this dynamic entirely. They have established networks of buyers actively seeking practices like yours, and they know how to create genuine competition for your business.

For example, Mr. Mingus’s firm typically secures a double-digit number of Non-Disclosure Agreements (NDAs) for a deal. “In one specific case, we received 60 unique signed NDAs for a single transaction.”

A buyer signs an NDA when they want to learn more about the business — a good indicator that they’re interested. An M&A advisor’s network matters, and the sheer volume of interest TUSK generated for a single transaction is a clear reflection of how strong that network is.

Mr. Mingus attributes this volume to a large pool of potential buyers, estimating that over 150 private equity-backed platforms are currently active in the dental space.

“Our most active buyers are in the dental practice space. So, when we’re working with non-dental practices, such as dermatology, plastic surgery, or radiology, we leverage the Axial platform to find more buyers. It’s about getting our client’s practice in front of the right buyers to get a competitive advantage and find the right exit.”

This level of buyer interest creates three critical advantages:

• First, competitive pressure drives up the purchase price. When multiple qualified buyers want your practice, they compete on valuation multiples, cash at closing, and earnout terms.
• Second, you gain leverage in negotiations. If one buyer insists on unfavorable earnout terms, you can walk away knowing you have other options.
• Third, you can optimize for factors beyond price. Some sellers prioritize finding buyers who will maintain their practice culture and retain staff. Others want maximum cash at closing with minimal post-sale involvement. When you have multiple qualified offers, you can choose the buyer who best aligns with your priorities rather than accepting the only offer available.

Creating this competitive environment requires:

• Professional marketing materials that resonate with healthcare buyers
• Broad distribution through advisor networks and industry connections
• Systematic buyer qualification to focus on serious prospects
• Structured process that maintains confidentiality while generating competition

This isn’t something physicians can replicate on their own. It requires years of relationship-building with buyers, an understanding of what makes practices attractive to different buyer types, and expertise in managing a coordinated process that keeps multiple buyers engaged simultaneously.

3. M&A Advisors Navigate Complex Deal Structures

Modern medical practice sales rarely involve simple transactions where you receive all cash at closing and walk away. Understanding the nuances of deal structures — and negotiating them effectively — often matters as much as the headline purchase price.

Earnouts

Ryan Mingus told us that he is “…seeing some form of earnout in almost every deal. Market dynamics dictate how often you see earnouts and how much of the total deal is tied up in an earnout. We are in a higher interest rate environment than previous years, and it is resulting in earnouts being seen more frequently and as a greater percentage of the cash at close.”

Earnouts — where a portion of the purchase price is contingent on meeting specific post-closing targets — have become increasingly common. They typically involve patient retention thresholds, revenue maintenance adjusted for market conditions, provider retention commitments, or contract renewal milestones.

As a general rule, TUSK advises that you don’t want to see more than 20% of a deal in an earnout. That said, if there’s zero equity roll, you could see a higher percentage. It all depends on the seller’s risk threshold and the other options on the table.

Rollover Equity

Healthcare M&A transactions increasingly include rollover equity provisions.

Let’s say your practice is valued at $10 million. A private equity firm offers to buy 70% for $7 million cash, with you rolling over 30% ($3 million in equity). Over 3–5 years, if the PE firm successfully grows the practice and sells it for $30 million, your 30% stake is now worth $9 million — three times its original value.

This can be a great exit strategy for medical practice owners who want to sell to a PE firm that can help them grow their business. PE firms are experts in growing businesses and will resell the practice to realize a profit.

Healthcare-specific Transaction Complexity

Beyond deal structure, healthcare transactions involve regulatory and operational complexities:

• Provider credentialing transfers that take 90–180 days and affect revenue continuity
• HIPAA compliance requirements for patient data transfer and medical record custody
• State regulatory approvals that can delay or prevent transactions
• Corporate practice of medicine laws that vary significantly by state
• Hospital privilege transfers requiring medical staff committee approvals

Experienced healthcare M&A advisors anticipate these issues, build appropriate timelines into the transaction schedule, and know how to structure deals that account for healthcare-specific risks.

How Axial Helps You Find the Right Healthcare M&A Advisor for Your Medical Practice

Finding a qualified healthcare M&A advisor can be a major challenge for medical practice owners, especially physicians who haven’t worked with M&A firms. Most rely on referrals from colleagues or online searches.

But when you’re working with an M&A advisor, you want someone who’s a good fit for your practice, with recent and relevant experience in selling medical practices like yours.

Axial’s Data-Driven Approach

Axial specializes in matching medical practice owners with vetted M&A advisors who have proven track records in healthcare transactions. Our evaluation process goes beyond marketing claims to assess actual performance data.

We evaluate advisors based on:

• Number of medical practice transactions recently completed
• Experience in your specific specialty or practice type
• Geographic market knowledge and buyer relationships
• Deal size experience that matches your practice valuation
• Success in advancing buyers from initial interest to submitted bids
• Conversion rates from letters of intent to completed transactions
• Experience with existing platforms and PE firms
• Client feedback covering communication quality, negotiation effectiveness, and post-closing satisfaction

The Axial Process for Medical Practice Owners

Your process begins with a conversation with an Exit Consultant. We’ll assess your practice type, size, and complexity, discuss your exit timeline and objectives, evaluate your readiness for sale, and provide education about the medical practice sale process.

Based on your specific needs, we create a shortlist of 3–5 qualified advisors from our network of 3,000+ M&A professionals. These advisors have recent medical practice transaction experience, geographic market knowledge relevant to your location, buyer relationships in healthcare and your specialty, and a track record of successful closings at your practice’s size and complexity.

Advisors in our network have successfully represented diverse healthcare transactions, including psychiatry practices, multi-site ophthalmology groups, autism/ABA therapy clinics, family health and specialty service medical clinics, and telehealth companies.

Ready to explore your exit options? Schedule your free exit consultation with Axial today.

Additional Resources for Business Owners Looking to Sell Their Business

At Axial, we offer several resources for small business owners looking to sell their company, learn more about the M&A process, and better understand the value of their business.

Here are just some of the resources that can be helpful to you:

• Free Business Valuation Calculator: Use this calculator to get a rough estimate of your business’s value, based on an industry-specific DCF analysis trusted by M&A advisors.
• Checklist for Selling Your Business: We break down the selling process into an easy-to-follow checklist, including a business exit timeline to help you determine when to start the M&A process.
• Business Brokers vs. M&A Advisors: We clear up the confusion around the roles of business brokers and M&A advisors, explaining how each operates.

These are just a few of the resources we’ve created for business owners. You can find more here.

Frequently Asked Questions

What is the Average EBITDA Multiple for Medical Practices?

Based on data from Axial’s network, healthcare transaction multiples vary significantly by practice size:

• Under $1M EBITDA: 2.4x median (2.4x – 9.7x range)
• $1M – $3M EBITDA: 6x median (2.4x – 9.7x range)
• $3M+ EBITDA: 6x+ median (2.4x – 9.7x range)

Primary care practices typically sell for 0.5–0.9x annual revenue, with specialists commanding higher multiples up to 1.5x+ revenue. However, actual multiples depend on numerous factors, including historical growth, provider retention, payer mix, and market conditions.

Learn more in Axial’s breakdown of EBITDA multiples by industry.

How Much Can I Sell My Medical Practice For?

The amount you can sell your medical practice for depends on your specialty, practice size, payer mix, patient demographics, and financial performance. To get a rough estimate, use Axial’s free business valuation calculator, which uses an industry-specific DCF methodology to provide a realistic starting point.

For an accurate valuation that accounts for healthcare-specific factors and current market conditions, schedule a consultation with Axial to connect with experienced healthcare M&A advisors.

How Long Does It Take to Sell a Medical Practice?

Medical practice sales typically take 12–18 months from initial preparation through closing. The more prepared you are to sell your business, the smoother the M&A process will be.

Ryan Mingus provided this average breakdown:

• Onboarding and Preparation (6–8 Weeks): “Once a client signs an agreement, it takes approximately six to eight weeks to get them ‘in market.’ During this phase, our firm scrubs the data, rebuilds financials from the general ledger up to create three years of trended data, and produces a pitchbook.”
• Market to LOI (12–17 weeks): “After taking your practice to market, the process involves securing Non-Disclosure Agreements (NDAs), hosting buyer calls, and facilitating site visits and dinners.”

The goal is to move from the initial market launch to getting under a Letter of Intent (LOI) in ideally 12–17 weeks.

But keep in mind these are estimates. Healthcare transactions can take longer than other business sales due to regulatory approval requirements (now required in twelve states), insurance credentialing transfers (typically 90–180 days), and patient care continuity obligations.

Proper planning with an experienced healthcare M&A advisor can help minimize delays and avoid common issues that extend timelines.

Can I Sell My Medical Practice If I’m a Solo Practitioner?

Solo practitioners face significant challenges reaching the $1M+ EBITDA threshold that attracts most buyers. The average primary care doctor generates approximately $1.4 million in revenue annually, but median expenses per physician exceed $1 million.

Exceptions exist for solo practitioners in high-margin specialties (cosmetic dermatology, ophthalmology with ASCs or LASIK) who can reach $1M+ EBITDA, but these represent outliers. Most successful medical practice sales involve multi-provider groups with proven management infrastructure and reduced key-person dependencies.

If you’re a solo practitioner considering a future sale, focus on becoming a multi-provider practice or exploring partnership opportunities that increase scale.