Sell-Side Prep: The Practice Sale Readiness Guide & Checklist

Start with runway

A sale planned over three to five years beats one forced by burnout or a deadline. Time is leverage: it lets you improve profitability, clean up the financials, reduce owner-dependence, and sell on your terms rather than a buyer’s. Even a 12-month head start changes the outcome.

The four levers that raise your price

1. 1Profitability — trim overhead toward benchmark; buyers pay for reliable cash flow.
2. 2Clean, verifiable financials — three years of reconciled P&Ls and documented add-backs.
3. 3Lower owner-dependence — associate and hygiene capacity make the practice transferable (a widely cited ~15–22% premium).
4. 4Growth trend — steady, rising collections read as lower risk and support a higher multiple.

The sale-readiness checklist

Work through these before you go to market. Anything you can’t check is either a fixable project or a question a buyer will raise in due diligence — better to find it now.

Financials & tax

• Three years of clean, reconciled P&Ls, balance sheets, and tax returns that tie out.
• Overhead reviewed by category against benchmarks; obvious excess trimmed.
• Personal expenses run through the practice identified and documented as legitimate add-backs.
• Accounts receivable current; adjusted collection percentage tightened toward ~98%.
• Production and collections reports by provider and by procedure available and accurate.
• A conversation started with your CPA on the likely tax structure (asset vs. stock, allocation).

Revenue quality & payor mix

• Fee schedule reviewed; weakest PPO plans renegotiated or dropped.
• Payor mix understood (fee-for-service vs. PPO vs. Medicaid) and its effect on value.
• No single payor, referral source, or employer group is an outsized share of revenue.
• Recent collections trend is flat-to-growing, not declining.

Patients & production

• Active-patient count (seen in the last 18 months) and new-patients-per-month documented.
• Hygiene department full and productive, with a strong reappointment rate.
• Unscheduled/diagnosed-but-untreated treatment tracked — the pipeline a buyer inherits.
• Production not overly dependent on the selling doctor’s personal chair.

Operations, systems & team

• Core systems and protocols documented so a buyer inherits a turnkey practice.
• Key team members stable; roles, tenure, and compensation clear and current.
• Owner-dependence reduced — associate and/or hygiene capacity in place (a widely cited ~15–22% transferability premium).
• Software, imaging, and scheduling in good order with clean, exportable data.

Facility, lease & equipment

• Lease reviewed — enough remaining term, and assignable to a buyer.
• If you own the building, decided whether to sell it or hold it and lease to the buyer.
• Equipment reasonably current; deferred maintenance addressed; technology not glaringly dated.
• Equipment list, service records, and any leases/loans on equipment gathered.

Legal, entity & compliance

• Entity documents, licenses, and credentialing current and organized.
• No unresolved liens, disputes, or pending issues (or they’re disclosed and understood).
• OSHA/HIPAA and clinical records in order for diligence.
• A transition attorney identified to paper the deal.

Value, deal & personal readiness

• Understand your practice’s value and what drives it — start with the valuation calculator.
• Estimated your after-tax cash in hand, not just the headline price.
• Decided what matters most: maximum price, the right steward for your legacy, or a balance — and which deal structure fits.
• Confirmed the sale (plus your other assets) actually funds your retirement — the number has to work for you.
• A plan for what’s next — the transition is a beginning, not just an ending.
• Your CPA, attorney, and financial advisor lined up before you go to market.

The final 6–12 months

1. 1Lock in clean financials and a defensible valuation.
2. 2Finish the highest-impact value projects (overhead, hygiene, documentation).
3. 3Decide your ideal structure and buyer profile with your advisors.
4. 4Go to market (or open the successor conversation) from a position of strength.
5. 5Run offers through the after-tax, cash-in-hand lens — not the headline number.

How we help

We’re not brokers — we don’t market practices or find buyers. In the years before a sale we help you understand and build value, plan the taxes and timing, and — once you have a buyer or successor in mind — evaluate the deal and turn the proceeds into lasting retirement income. See our practice transitions approach. Educational only; not legal or tax advice.