Preparing Your Psychiatry Practice for Sale: The Owner’s Playbook
Quick Answer: Preparing psychiatry practice for sale means cleaning up your financials, reducing dependence on you as the owner, documenting contracts and compliance, and addressing
Quick Answer: Preparing psychiatry practice for sale means cleaning up your financials, reducing dependence on you as the owner, documenting contracts and compliance, and addressing
Quick Answer: To sell a psychiatry practice, you (1) get a confidential valuation, (2) prepare your financials and operations for scrutiny, (3) quietly approach qualified
Key takeaways. Selling a psychiatry practice typically moves through five stages: preparation, valuation and confidential marketing, a letter of intent (LOI), due diligence, and closing.
A typical sale runs several months from preparation to close — often in the range of six to twelve months once you decide to go to market, depending on diligence and financing. Preparing the practice beforehand can take longer and materially improves the outcome. (Illustrative — not transaction guidance.)
The common path is: preparation (cleaning financials and reducing risk), valuation, confidential marketing to qualified buyers, a letter of intent (LOI), due diligence, and closing. Each stage has its own purpose, and most surprises happen in diligence — which is why preparation matters.
An LOI is a mostly non-binding document that sets out a buyer’s proposed price and key terms before formal diligence begins. Signing it usually starts an exclusivity period. It is not a contract to sell, but it frames the deal — so the terms inside it matter a great deal.
An earnout is a portion of the price paid later, contingent on the practice hitting agreed targets after closing. It can bridge a gap between what you want and what a buyer will pay up front, but it shifts risk onto you. Whether it is fair depends entirely on how the targets are written.
Rollover equity is the share of your sale proceeds you reinvest into the buyer’s larger company instead of taking as cash. It lets you participate in future growth — a “second bite” — but it is illiquid and carries the buyer’s risk. It is common in private-equity-backed deals.