Here’s a fact: everyone gets sick, so everyone will go to a medical clinic eventually. A medical clinic is a fancy name for what people usually call the doctor’s office. And let’s be honest: what can be more stable than a business where everyone needs to go to and that the economic situation almost doesn’t affect it’s growth?
It’s not easy to make money with a medical clinic, and it’s certainly not easy to sell it once you’re done.There’s a lot of aspects that must be taken into account before setting your asking price, such as location, office’s size, use of technology, recognition etc.
Check the following topics and learn how to sell your clinic for the best value.
What is your Medical Clinic business worth?
First, gather all the financial information from the past years and compile them into financial reports regarding sales, profit and growth trends. Then, look around you and analyze how competition works and how do the other medical-practice clinics reputation harm your business.
It’s important to have all these information in hands because potential buyers often ask the seller about financial and location aspects of the business they are interested in.
Check out these metrics and make sure you have all the information required:
- What are the sales?
- What is the profit?
- What are the growth trends?
- What is driving new sales and is that sustainable?
- What channels do new customers come from and what is the breakdown of each channel?
- What is your market position?
- Is your Location favorable?
- How reliant is the business on the owner?
- What systems and processes are in place to run the business?
What makes a Medical Clinic business worth more?
A good location, use of medical systems, a modern, clean and well decorated office, an efficient secretary, all of these are differentials that must be considered before you set your asking price as well.
But that’s not all. Take a look:
- Predictable key drivers of new sales
- Stable or growing traffic from diversified sources
- Established suppliers of inventory with backup suppliers in place
- Traffic stats
- High percentage of repeat visitors and repeat sales
- Clean legal history
- Brand with trademark, copyright or legal concerns
- Documented systems and processes
- Growth potential
If you own a medical clinic and share your office with one or more doctors, this must be put into account too. It’s not exactly something that will make your business worth more, but it depends if you are trying to sell only your share in the partnership but the whole clinic.
What does the average Medical Clinic business sell for?
There has been 270 medical-practice clinics since 2005, when our research started. In ten years, average sales price was almost $548k and average multiple, 2.02, which means average asking price is two times higher than total gross income.
In the same period, almost $175 million were at stake.
What is the most frequent deal size?
The most frequent deal size is $200k, which can be confirmed by looking at the chart.
Most of deal sizes were less than $250k and there have been more sales in 2015 than ever. In 2015, 38 medical-practice clinics were negotiated under $250k, 23 between $250-500k, 15 between $500k-1 million, 11 between $1-2 million and 2 over $2 million up to $10 million.
Is the Medical Clinic market getting bigger?
In 2015, medical-practice clinics market could not be better. It was the first time since there were more than $40 million in total transaction value.
Before, the best year was 2012, followed by 2014, which have accumulated more than $33 million and $32 million, respectively.
Are bigger businesses worth more?
Yes! In 2015, all medical-practice clinics negotiated under $250k had the exact multiple of those sold for between $250k and $500k: 2.23.
Businesses sold for $500k-$1 million had a 2.32 multiple, while $1-2 million multiple was 3,98 and $2-10 million had a multiple of 4,49.
The higher the deal size, the higher the multiple rate.
What states have the most Medical Clinic business deals?
California, Arizona, Florida, Texas and New York are the best states to close a medical-practice clinic deal nowadays.
Other american states, such as Utah, New Jersey and Illinois are also good places to make business.
Why would you sell in the first place?
The reason to sell always varies from each person. Maybe you are looking for new challenges, businesses and opportunities, or you just want to enjoy your family and retire. Although it can seem tempting to get your hard worked cash, make sure that you are clear on the motives so you don’t regret afterwards.
How long will it take to sell your business?
If you have read all the necessary steps to understand your valuation, and think you have focused on all the topics that make your company worth more, it is maybe time to start the process. Selling your business is a long-term process, and doesn’t happen overnight. Usually companies sell in 12 months, but you can also see deals getting closed in 6 to 9 months depending on the opportunity.
What is the process of selling your business?
This step by step process will help you get less confused when you make sure you are ready and confident to let go of your business, and perform a nice and positive sell. Many entrepreneurs forget about a step, or just don’t have the right guidance to know all the stages necessary and get lost through the process. Don’t forget to go through all of these, and if you have any questions, comment at the end of the article or contact us for more help.
Who will buy your business?
If you are wondering about the buyers that can be interested in your Medical-Practice Clinic, don’t worry, there are many options and possibilities. From First Time entrepreneurs, to businessmen interested in new opportunities, the chances are that in the medical industry it may likely be a person who already had a store in the field.
There’ve been almost 300 medical-practice clinics sold in the past ten years, with an average multiple of more than 2.
2015 was also the best year for this kind of business so far, and it’s possible to predict that 2016 is going to be even better.
If you want to start accelerating your buyout process, fill out our free valuation form and get your business valued today! Leave your comments on any doubts or feedback, we are glad to hear your thoughts!