A physician we spoke with had built a practice most owners would envy. Twenty years of steady growth, a loyal patient base, a reputation that filled the schedule without much marketing. Every year around the holidays his wife asked the same question: is this the year you sell? And every year he gave the same answer. One more good year.
Then one of his associates left for a hospital job. Honestly, he did not mind. He stopped paying that salary and kept the difference, his payroll shrank, and he no longer had the headaches of managing another provider. He was tired anyway, so he covered what he could himself and let the rest go. Some patients drifted away because there was less capacity to see them. But at the end of the month, the money in his pocket was the same, maybe even a little more. It felt like a good trade.
So he kept coasting. One more good year became three. When he finally decided he was done, the offers came in well below what the same practice would have commanded a few years earlier. He had not lost a single patient he cared about, and his take-home had never dropped. He had simply let the practice get smaller, and a smaller practice sells for less.
That is the trap. Most medical practice owners decide to sell the year they are done. Burned out, slowing down, tired of the payroll and the paperwork. It feels like the natural time. It is actually the most expensive one. Buyers do not pay for a finish line. They pay for momentum. And by the time you feel ready to walk away, the momentum is usually already gone.
The best time to sell is two to three years before you actually want to leave, while the practice is still climbing and you still have the energy to run it hard.
Why Waiting Quietly Costs You
Here is the part that makes this so easy to miss. When that provider left, the owner’s take-home did not fall. It held, maybe even rose, because payroll dropped faster than revenue did. That is exactly how the decline stays invisible. You feel fine. Your bank account feels fine. Meanwhile the practice underneath you is quietly getting smaller.
Does this sound familiar to you? I see it more often than I would like to. An owner optimizes for the money in his pocket this month and assumes the value of the practice is moving in the same direction. It is not.
Practices are valued on trailing performance, usually the last twelve to twenty four months, and a buyer pays for the total revenue and profit the practice produces, not the take-home you propped up by letting the practice shrink. When you sell on the way down, every soft month is baked into your multiple. You are not just losing this year’s profit. You are lowering the number the buyer multiplies.
| 2 to 3 yrs | 12 to 24 mo | 20 to 30% |
| Ideal runway before you exit | The window buyers actually weight | Value commonly lost selling on a decline |
How to Time It Right
You do not need a perfect market. You need to sell from strength instead of exhaustion. The owners who capture the highest multiples plan the exit while the practice is still an asset they would want to buy themselves.
| Move | Why It Matters to Buyers | What It Protects |
| Sell on an upward trend | Buyers pay premiums for growth, not recovery | A higher multiple on a higher number |
| Give yourself a 2 to 3 year runway | Time to clean the books, document add-backs, build the team | More qualified buyers, fewer discounts |
| Watch the market, not just your calendar | Rate environment and strategic buyer appetite shift year to year | Real competition for your practice |
| Start before burnout, not after | Tired owners let the practice drift | The last few years of performance that set your price |
Sell From Strength, Not From Fatigue
The cruel irony of practice sales is that the owner who least wants to keep working is often the one who most needs to. Selling from a position of energy and growth is what creates leverage, multiple offers, and a number you are proud of.
The decision to sell and the moment you actually close do not have to be the same year. The best exits are planned early, so that when you are ready to be done, the practice is already built to sell.
If any part of that doctor’s story felt like looking in a mirror, you are closer to your best exit window than you think. The worst thing you can do is coast through it. Now is the time to know your number and your timeline, while you still have room to protect both.