You built something worth real money. The question is whether you know how much, and whether you’ve done anything to make that number bigger before someone writes a check.
Private equity did 1,029 healthcare deals in 2025 alone (PESP, 2026). That’s not a trend. That’s a feeding frenzy. And the practices getting top dollar aren’t just profitable. They’re structured in a way that makes a buyer feel safe writing a seven-figure check.
If you’re a plastic surgeon doing $2 million in EBITDA, the difference between a 7.3x multiple and an 11.3x multiple is over $8 million. Same practice. Same revenue. Same doctor. I cover how to build toward that higher multiple in my medical practice exit strategy guide and the practice growth framework. The difference is in the details that buyers care about and most practice owners never think about.
What Your Practice Is Actually Worth
Let’s start with the numbers. First Page Sage compiled EBITDA multiples from M&A databases and PE networks covering Q1 2022 through Q1 2025:
Plastic surgery practices at $1-3 million EBITDA trade at roughly 7.3x. At $3-5 million, that jumps to 9.7x. Hit $5-10 million and you’re looking at 11.3x.
For context, dermatology runs 5.4x to 8.3x across the same range. General medical practices land at 5.6x to 8.8x. Plastic surgery commands a premium because of high margins, cash-pay revenue, and strong patient demand.
But here’s what that table doesn’t show: two practices with identical EBITDA can get wildly different multiples. Sofer Advisors’ 2026 data shows the overall range stretching from 6x to 12x, with PE-backed platforms pulling 10-12x and smaller practices stuck at 6-8x.
The gap isn’t random. It’s earned.
The Seven Things That Move Your Multiple
FOCUS Investment Banking published their 2026 analysis of what actually drives practice valuations. I’ve seen the same factors play out across every deal I’ve been close to. Here’s what matters:
Quality of earnings. This is number one for a reason. Buyers don’t care about your top-line revenue. They care about clean, recurring, growing EBITDA. That means your financials need to tell a clear story. Personal expenses run through the business? They need to be identified and adjusted. One-time revenue spikes? Called out. Inconsistent reporting? Fixed before anyone looks at it.
A buyer will hire an accountant to do a quality of earnings analysis, and that person’s job is to find every reason your numbers aren’t what they look like. You want that process to go smoothly.
Scale. Multi-location, multi-provider practices command premiums because they reduce risk. If the entire practice depends on one surgeon working 60 hours a week, a buyer sees a liability, not an asset. What happens when that surgeon gets sick? Retires? Decides to cut back?
The practices hitting those 10-12x multiples have multiple providers generating revenue, multiple locations creating geographic coverage, and an organizational structure that doesn’t collapse when one person takes a vacation.
Ancillary revenue streams. A plastic surgery practice that only does surgeries is leaving money on the table in two ways: missing revenue today and depressing their valuation tomorrow. Aesthetics, medical-grade skincare, injectables, laser treatments, these all add recurring revenue that buyers love because they increase visit frequency and patient lifetime value.
Payer mix. Commercial insurance pays better than government programs. Cash-pay procedures are even better. Buyers look at your payer mix because it predicts future margins. A practice with 80% commercial and cash-pay patients is worth more than one with 60% Medicare, even at the same revenue level.
Credible growth trajectory. The word “credible” is doing heavy lifting here. Every practice owner says “we’re growing.” Buyers want to see documented evidence: year-over-year revenue trends, patient volume growth, new service line adoption rates, marketing ROI data. If you can show that your marketing generates a predictable return and that the pipeline is healthy, you’re worth more.
Low owner dependency. This is the killer for most single-surgeon practices. If you are the practice, the practice can’t be sold for maximum value. Buyers apply a heavy discount when the primary revenue generator is the person walking out the door after closing.
Reducing owner dependency takes years, not months. Hiring associates, training them, building their patient bases, and documenting your clinical and operational processes so they survive your departure. If you’re thinking about selling in five years, this work starts now.
Practice preparation. Flychain’s 2026 data recommends 2-3 years of advance preparation before a sale. That’s not excessive. Cleaning up your books, building transferable systems, reducing personal expenses flowing through the business, training your team to operate without you. All of that takes time.
What PE Firms Are Actually Buying
The PE playbook in healthcare isn’t a mystery anymore. Capital has rotated out of labor-heavy provider services like nursing homes and into outpatient specialty care, health IT, and pharma services (Holt Law, 2026).
The dominant strategy is “platform and add-on.” A PE firm buys one well-run practice as a platform, then bolts on smaller practices in the same specialty and geography. Those add-on acquisitions typically happen at lower multiples (6-8x) while the combined platform trades at 10-12x. The PE firm pockets the spread.
What this means for you: if you’re a single-location practice with strong fundamentals, you might be an attractive add-on acquisition. The multiple will be lower than a platform deal, but the check is still significant. If you want platform-level multiples, you need multiple locations, multiple providers, and $5 million+ in EBITDA before you go to market.
Dermatology is one of the hottest sectors, with 16 buyout deals tracked through October 2025 alone (FOCUS Bankers). Plastic surgery, ophthalmology, and cardiology are right behind it. All share the same characteristics: high margins, insured or cash-pay patients, and procedures that can be standardized across locations.
The Valuation Killers Nobody Warns You About
Patient concentration. If 30% of your revenue comes from 10 patients, a buyer sees catastrophic risk. What happens when those 10 people move, switch providers, or stop coming? Diversified patient bases are worth more.
Staff dependency. Same principle as owner dependency, but applied to key staff. If your office manager runs everything and has no backup, that’s a risk. If your best injector accounts for 40% of aesthetic revenue and has no non-compete, that’s a bigger risk.
Lease problems. Your practice lease might be the most overlooked valuation factor. If your lease expires in two years and the landlord isn’t committed to renewal, a buyer has a serious concern. Long-term leases with favorable terms, or even building ownership, add value.
Deferred maintenance. Equipment that’s past its useful life, a facility that needs renovation, IT systems from 2015. Buyers will discount for every dollar they’ll need to spend to bring the practice up to current standards.
Undocumented processes. If everything runs on tribal knowledge and the doctor’s personal relationships, that’s not a business. That’s a personality cult. Buyers want documented SOPs, training manuals, and systems that transfer.
What to Do Starting Now
If a sale is 3-5 years away, here’s the order of operations:
First, get a baseline valuation. Not a back-of-napkin guess. Hire someone who values medical practices for a living. You need to know where you stand before you can improve.
Second, clean your books. Every personal expense, every inconsistency, every reporting gap, fix it now. Two to three years of clean financials is what buyers want to see.
Third, reduce owner dependency. Start hiring and training associates. Build their patient relationships. Document your clinical protocols. The goal is a practice that generates revenue whether you’re in the building or not.
Fourth, build recurring revenue. Membership programs, aesthetic service lines, skincare, anything that brings patients back on a predictable schedule. Recurring revenue trades at a premium because it’s predictable.
Fifth, fix your marketing attribution. If you can’t show a buyer exactly how your marketing generates patients and at what cost, you’re leaving money on the table. Practices with documented marketing funnels and clear ROI data are worth more because the buyer knows the growth engine will keep running after the sale.
The practices getting 11x multiples didn’t stumble into those numbers. They spent years building something that works without them. That’s what you’re really selling.
FAQ
How is a medical practice valued?
The standard method is an EBITDA multiple. Your annual earnings before interest, taxes, depreciation, and amortization, multiplied by a factor that ranges from 4x to 12x depending on your specialty, size, and growth profile. Plastic surgery practices currently command 7.3x to 11.3x, based on First Page Sage data from 2022-2025. Revenue multiples of 0.5x to 1.0x are sometimes used as a secondary benchmark.
What’s the difference between a platform deal and an add-on acquisition?
A platform deal is when a PE firm buys a practice as the foundation for a regional or national group, typically at 10-12x EBITDA. An add-on is a smaller practice bolted onto an existing platform, usually at 6-8x EBITDA. The PE firm makes money on the spread between what they pay for add-ons and what the combined entity is worth.
How long does it take to prepare a practice for sale?
Two to three years of active preparation, minimum (Flychain, 2026). That includes cleaning up financials, reducing owner dependency, documenting operations, building recurring revenue, and stabilizing your staff. Practices that try to sell without preparation leave significant money on the table.