A small practice sells on owner earnings (SDE) once a market physician salary is charged for the patients you personally see — and the 12-20x multiples in the headlines are PE PLATFORM values, not a single practice's price. See where you really land.
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We answer each one from your books first — so you fix the story before a diligence team writes the number.
You're the primary clinician — a buyer must hire a physician to replace you (~$250K-$450K+), straight out of earnings before any multiple. Until an associate carries real clinical load, expect an earnout and a clinical tie-in, and an offer anchored to the bottom of the SDE band.
Revenue is third-party rates: one commercial payer above ~25-30% is a single point of failure, and declining-rate Medicare is policy risk a buyer carries into the model. Show the mix and the trend, or the buyer assumes the worst.
The comp data is broad 'physicians except mental health' — a buyer adjusts for your specialty's procedure mix, ancillary depth, and reimbursement. A derm, GI, ophthalmology, ortho, or cardiology practice doesn't price like the broad-physician median, up or down.
Labs, imaging, in-office procedures, and dispensing can be durable, transferable income — or owner-personal and at-risk. A buyer probes whether the ancillary lines are Stark/anti-kickback-clean and survive your departure, or evaporate with you.
Stark, anti-kickback, physician credentialing, and payer re-enrollment can delay close and create a billing gap — a new owner-physician can't bill until enrolled. A buyer prices that lead time and the compliance risk into the deal.
Each lever is sized for a typical owner-physician practice ~$2.1m revenue, ~14% ebitda after a market physician salary is charged; pre-normalization owner benefit is far higher — the normalization produces this figure — about $300K EBITDA. Same number whether we frame it as “what a buyer discounts” or “what you keep by fixing it.”
The single biggest lever. A physician other than you carrying RVU/visit volume proves transferability, defuses the owner-is-revenue attack, and is the fastest path from the SDE band to the EBITDA market.
adds about 0.5–0.6× to your multiple · usually takes 12–24 months
A commercial-weighted mix with no single payer dominant insulates against Medicare-rate erosion and reads as durable revenue — lifting both the normalized margin and the buyer's confidence in the pro forma.
adds about 0.2–0.4× to your multiple · usually takes 12–24 months
Labs, imaging, procedures, and dispensing that are Stark/anti-kickback-clean and not owner-personal draw the top of the single-practice band. Document the compliance and the transferability before you list.
adds about 0.2–0.5× to your multiple · usually takes 6–18 months
The 10-20x headlines are PE/MSO PLATFORM values; a single practice sells INTO that roll-up at SMB multiples. Position the practice as a clean add-on — that, not the headline multiple, is how a small practice captures platform interest.
adds about 0.1–0.3× to your multiple · usually takes 3–12 months
Typical impact ranges blended from lower-middle-market transaction data, sub-$50M M&A databases, and observed consolidator pricing in the $300K–$3M EBITDA band. Directional, not a guarantee — your memo computes your actual numbers from your books.
The metrics buyers grade physician practices on. The diagnostic fills the “your business” column from your actual QuickBooks data.
| Metric | Physician & Medical Practices benchmark | Your business | What it means |
|---|---|---|---|
| Recurring / contracted revenue | ~55% of revenue | Your data | Higher is better — the top multiple lever |
| Gross margin | ~62% | Your data | Pricing and job-costing discipline |
| EBITDA margin | ~14% | Your data | What flows to the bottom line |
| Healthy customer-concentration ceiling | top customer under 30% | Your data | Above it, buyers price the risk |
| Typical industry growth | ~4% / yr | Your data | Beating it can add to your multiple |
| Typical sale multiple | 2.3–8.0× EBITDA | Your data | Where the bidding starts; the levers above move you up |
Benchmarks are blended industry composites, service businesses $1M–$10M revenue, 2026-Q1 — directional, not a precise bar. Your memo measures you against your own books. Connect QuickBooks to fill in your numbers →
The diagnostic arrives as formats you can actually use, plus a private, scoped link to share a curated package with a specific buyer — you decide, card by card, what they see.
A branded slide deck, ready to present — for the buyer meeting, the lender, or the board.
A written diagnostic that holds up with buyers, yours to edit — plain-English summary, how we rebuilt your real earnings, every add-back listed.
Live formulas, not a dead printout — the path from raw profit to your real number, plus the cash-tied-up scenarios a buyer can stress-test.
Physician practices sit in one of the most active healthcare roll-up waves, specialty-by-specialty — PE-backed MSO platforms acquire established practices as add-ons and pay up when the practice runs without its owner: dermatology (Schweiger/LLR), ophthalmology (EyeCare Partners), GI (GI Alliance), urology (U.S. Urology Partners), cardiology (Cardiovascular Associates of America), and ortho (HOPCo). The 12-20x multiples you read about are what the acquirer's whole PLATFORM is worth — a single $500K-$5M practice sells INTO that roll-up on SDE (after a market physician salary) or, with associate coverage, normalized EBITDA at SMB multiples (~3-6x); for a small practice the realistic buyer is often a regional group or another physician-owner.
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Just what the books can’t show — agreements, key accounts, who runs the crews.
Buyer-readiness score, normalized EBITDA, value range and top flags — instantly.
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Most Physician & Medical Practices businesses in the $1M–$10M revenue range trade at roughly 2.3× to 8.0× normalized EBITDA, with a typical deal near 5.0×. Smaller, owner-dependent shops sit at the low end; larger, manager-run businesses with recurring revenue reach the top. Your actual number depends on your books — that's what the diagnostic computes, blending recent lower-middle-market closings, main-street marketplace sales, and academic M&A survey data.
No — those are what the acquirer's entire specialty platform is worth. A single owner-physician practice trades on SDE (after a market physician salary) or normalized EBITDA ~3-6x; the multiple arbitrage is THEIR return, not your sale price.
Because the owner-physician IS the revenue — SDE is measured before replacing your clinical labor, and a buyer must hire a physician (~$250K-$450K+) to do what you do. Once that salary is charged, the residual transferable profit gets the multiple.
Yes, and the broad-physician comp data doesn't fully capture it — a buyer adjusts for your specialty's procedure mix, ancillary, and reimbursement. Treat the headline as a starting point, not the answer.
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