Getting a medical practice ready to grow, take a partner or sell
Updated 16 October 2026
A buyer pays for the earnings a practice's records can prove. Growth and a sale are two separate questions. Growth asks whether the practice can add a provider, a location or a service line without breaking how it runs. Sale readiness asks whether a strategic buyer or a private equity platform can review the books and find figures it can defend. The same records answer both questions. This page lists what buyers check, how adjusted earnings are documented, and what to prepare. Some examples use clinic figures from franchise brands' Franchise Disclosure Documents (FDDs), the documents a franchisor gives a buyer before a sale.
Growth and sale readiness use the same records
Most owners want options. They may grow, hold, take a partner or sell, and they want to choose on their own schedule. Each option needs the same three things. The finance function must run on a monthly close. The financial statements must be accurate and consistent across years. The owners must know the economics of each provider, service line and location. With those in place the owners choose. Without them a buyer's timetable sets the choice.
AFC Urgent Care's FDD splits its 370 reporting centers by age. The 214 AFC Urgent Care centers open by 2020 averaged 40.0 patients a day, and the 156 opened from 2021 to 2025 averaged 29.6. Averan's AFC Urgent Care page puts the revenue gap between those two groups at $546,110. A buyer looking at a young AFC Urgent Care center reads that 10.4 patient gap as room to grow, and the center's own monthly records show whether it is closing.
Adjusted EBITDA and the add-backs behind it
EBITDA is earnings before interest, taxes, depreciation and amortization. Buyers price most practices on a multiple of adjusted EBITDA. Adjusted EBITDA adds back costs a new owner would not carry, such as owner pay above a market salary or a one-time legal bill. Every add-back needs a document behind it. Recurring costs stay in. One-time costs come out, with an invoice and an explanation. The financial statements must be on the accrual basis, which records revenue when earned and costs when incurred, for three years with the same methods each year.
The figures are an illustration. A practice reports $600,000 of EBITDA. The owner took $450,000 of pay for clinical work a buyer could hire for $300,000, so $150,000 is added back. A one-time $40,000 legal settlement is added back with its invoice and the settlement letter. Adjusted EBITDA is $790,000, and each of the two adjustments has a document a buyer's accountants can check.
Provider pay at market rates
Add-backs move in both directions. A provider paid below market makes EBITDA look larger than a buyer will accept. The buyer lowers the figure to what it would cost to hire that provider. Provider employment agreements also matter to a buyer, including their term length and any non-compete terms. For the terms of those agreements and their enforceability, talk to a healthcare attorney.
The figures are an illustration. An owner surgeon takes $200,000 a year. A buyer would need to pay $300,000 to replace that surgeon's work. The buyer subtracts $100,000 from adjusted EBITDA. At a multiple of six, that adjustment lowers the price by $600,000, so the owner gains nothing by underpaying the surgeon on paper.
What buyers check
Strategic and financial buyers review a short list. They check the quality of adjusted EBITDA. They check concentration, meaning how much revenue depends on one payer, one provider or one referral source. They check provider retention, and multi-provider groups draw higher multiples than solo practices. They check recurring revenue from established patient panels and contracts. They check systems, including the health record, billing, the close and reporting. They check compliance, including coding accuracy, credentialing, HIPAA and OIG matters. They check the case for why the next owner earns more.
AFC Urgent Care's 79 affiliate-run centers averaged $282,343 of 4-Wall profit in 2025. Averan's AFC Urgent Care page sets that against $1,231,125, the middle of AFC Urgent Care's opening cost range, and finds a payback of 4.36 years. A buyer of an AFC Urgent Care center runs the same arithmetic with the center's own profit, and that profit is only as reliable as the center's books.
Three years of history, prepared ahead
Buyers review three years of history whenever the owner starts preparing. The practical start is three years before the planned sale. The work covers a clean, adjusted financial history, written procedures and monthly reporting, the quiet resolution of payer or compliance issues before diligence, a management structure that runs without the owner, and growth cases a buyer can test. Owner work must be written down and handed to others, because a practice that depends on its owner is worth less. Payer contracts are reviewed for assignment to a new owner or for a path to renegotiation.
The Joint Chiropractic's company-owned clinics fell from 125 to 75 during 2025. The Joint Chiropractic sold 41 of them to franchisees in that year. Each of those buyers acquired a clinic with its own operating history, and The Joint Chiropractic's FDD shows top-quartile clinics averaging 101 months open. A clinic with a long, documented record gives a buyer more to rely on than a clinic with a short one.
What this means for a practice owner
A buyer pays for adjusted EBITDA that documents support. The practice needs three years of accrual statements with the same methods each year. Add-backs need invoices and explanations. Provider pay sits at market rates. Concentration in one payer, provider or referral source lowers value. Owner work is written down and handed off. Value depends on the specialty and the practice's own drivers, and the owners learn those drivers from their own figures.
Getting the records ready
Averan Advisors rebuilds financial history, documents add-backs and builds the growth cases a buyer will test through its fractional CFO service. The controller service keeps the monthly close and statements in the form a buyer expects.
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What happens next
Reading about it and having it done are different things. Here is exactly what happens if you want the second one.
- The call takes thirty minutesYou describe the business and where the numbers are letting you down. We give you an expert view of your situation, and what we would start with. There is no pitch deck.
- We look at the fileYou give us read access to the books as they are. We come back with what is wrong, what it will take to fix, and whether the answer is bookkeeping, controller work, or something else.
- We send a written scope and a priceIt lists what we do each month, what you get, the date it lands and the fee. We agree it before anything starts, and it does not change unless you agree.
- We take over the books and close the first monthWe set up access and systems and enter the opening balances. The first close lands on the date in the scope, and every one after it does too.