You’ve spent years building your practice, one client at a time. You’ve celebrated breakthroughs and navigated the down times. Now maybe you’re starting to wonder about the future.
Perhaps you imagine stepping away one day, retiring, or moving into teaching or consulting. Or maybe you’re curious about what it would take to sell your practice without leaving your clients stranded. Whatever the reason, thinking about exit planning can feel overwhelming, but it doesn’t have to be.
Let’s talk through some ways to set your private practice up for exit successfully, in a way that protects your clients and rewards all the effort you’ve put in.
What Does “Exit” Really Mean?
First, it helps to get clear on what “exit” actually means for you.
Are you hoping to sell the whole practice? Pass it on to a partner or associate? Or do you want to gradually step back while keeping a small caseload?
The answer will shape everything else.
Selling often means showing steady revenue and clean financials. Passing it on might mean training someone to carry on your work. Even if you’re simply closing the practice, planning ahead ensures your clients’ care continues smoothly.
Take a Hard Look at Your Finances
It’s easier to plan an exit when you really understand where your practice’s finances stand. Pulling your finances together might feel tedious, but it’s worth it. Take a look at the past three years of tax returns, profit and loss statements, and balance sheets.
Then, zoom in on the past 12 months. How much income is actually coming in? How much is tied up in overhead like rent, software, and insurance? Be sure to account for the time and energy you spend on admin tasks. If you’re the one handling everything, that’s part of the value, too.
One way practices are often valued is by looking at Seller’s Discretionary Earnings, which essentially adds your salary and other personal benefits to see what the practice itself earns. Knowing that number can help you set realistic expectations for an eventual sale.
Make Your Practice Less Dependent on You
Many practices revolve entirely around the owner, which can make buyers nervous. If you can show that your systems run even when you’re not in the room, your practice becomes more attractive and valuable.
Start documenting how things work. Write down processes for client intake, scheduling, billing, client handovers, and even admin routines.
Create a simple guide for anyone who might step in if you’re away. It doesn’t have to be fancy. The goal is to show that your practice can run smoothly without your constant oversight.
Think About Client Records and Care
Your clients are your top priority. Start thinking now about how records will be handled and what clients need to know. Make sure you understand the rules in your state for transferring health information and that you have consent forms ready.
You might draft a simple letter to explain the upcoming changes. Tell clients who will take over their care, and offer options for referrals, if they prefer someone else. Clear communication here reduces stress for everyone and maintains the trust you’ve built over the years.
Look at Legal and Contractual Details
A buyer or successor will want clarity on leases, contracts, and employment arrangements.
Can your office lease be transferred? Are your contractor agreements or staff roles clearly documented? Are your insurance panel contracts up to date?
Getting these things in order early can save a lot of headaches later. Even small details, like non-compete clauses or vendor contracts, matter when someone else steps in.
Make Small Changes That Add Big Value
Even if your exit is a few years away, small improvements now can make a big difference later. Reduce any lingering accounts receivable. Streamline recurring revenue, where possible. Document referral sources and conversion rates. These are all pieces that make a practice more “sellable” and easier for a buyer to step into.
Prepare for Due Diligence
When someone is serious about buying or taking over your practice, they will want to see clear, organized financials and documentation. Think of this as a friendly audit rather than a stressful test. Having your records, SOPs, and client transition plans ready will make the process smoother and faster.
Due diligence typically covers financial statements, client counts, payer mix, staff and contractor details, contracts, and policies. Preparing these ahead of time reduces surprises and keeps negotiations on track.
Consider the Tax Implications
How you structure a sale or transfer affects what you take home. Selling assets, shares, or using seller financing all come with different tax consequences. Talking to a CPA experienced in practice sales early on can help you plan wisely and avoid unpleasant surprises.
Ready When You Are
Exiting your private practice is a big step, but thinking ahead gives you control and peace of mind. By tidying up your finances and getting the right advice, you set yourself and your clients up for a smoother transition.
At Traktion, we help therapy practice owners do exactly this. Whether it’s cleaning up financials or enhancing your practice valuation, we make sure your practice is positioned for a successful exit.
Schedule an introductory call with us, and let’s make a plan that works for you and your clients.