Written in collaboration with Leon Garber of Aesthetic Growth Partners Leon@aestheticgrowthpartners.com


Phase 1: Get a General Overview of the Practice

The first step when considering the purchase of a healthcare practice is to get general information about the practice and its customer base to determine if it would be a good fit for your business goals.

  • Ask: Why is the seller selling?
    • Does the seller work “in” the business or “at the business”?
    • Is the seller also the lead provider? If yes, will they stay on after the sale?
  • Evaluate the practice’s patients and treatments.
    • How often does the average patient visit?
    • What are the top 5 treatments as a % of revenue?
    • How many active patients are there (visited in the last six months)?
    • What is the average order value?
    • Who are the top 20 patients by revenue?
    • Treatment trends over last 3 years: increasing or decreasing for each treatment type, and why?
  • Evaluate the practice’s social media and marketing.
    • How extensive is their email list?
    • What is the average email open rate?
    • How many followers do they have on each social media platform? 
    • How engaged are the followers?
  • Review the books. 
    • Ask for three years of tax returns, balance sheets, and profit and loss statements.
    • Ask about any threatened or pending claims or lawsuits.
    • Ask for all loans and liabilities. 
    • Compare EOY accounting software generated statements against that year’s tax returns to understand current year’s interims better.
  • Ask about the real estate.
    • How long is left on the real estate lease? 
    • Is the landlord willing to extend? 
    • Will landlord accept an assignment or require a new lease?  
    • Will a personal guarantee will be required? If yes, full lease term or descending obligation? 
  • Ask about capital equipment on site: 
    • Will all of it stay and is it all owned by the entity to be acquired?
    • Is it under warranty (if yes, from manufacturer or 3rd party maintenance).  
    • When were last P.M.’s completed?
    • What is the  cost of consumables per treatment?
  • Ask: What assets and liabilities is the seller including in the sale? (equipment, loans, working capital, accounts receivable, rebates, etc).


Phase 2: Due Diligence

If you are still interested in purchasing the practice, now it’s time to do some due diligence to ensure you identify any hidden pitfalls before making the purchase. 

  • Review the practice’s compliance with healthcare laws and regulations.
    • Are they set up correctly for their state? 
    • Do they have an MSO/MSA?
    • Do they have a protocol manual?
    • Do they have the required licenses for the space?
    • Are they following scope of practice laws?
  • Ask: What employment and other contracts and promises are currently in place?
    • Is the seller willing to sign a non-compete and non-solicitation?
    • Are the providers being paid commissions?
    • What is/are the compensation models currently in place? How long have they been in place (compare/contrast revenue, etc…from prior to comp plan implementation to after implementing).
    • Is compensation above market and will it need to be adjusted? If likely, “mystery shop” local medspa/aesthetic employment scene to ascertain what competitive compensation looks like locally.
  • Obtain an independent valuation of the practice. We can recommend valuation companies to you.
  • Ask: Are there any pending or threatened lawsuits?


Phase 3: Closing the Deal

At this point, you have a solid understanding of the healthcare practice for sale, putting you in a strong position to negotiate with the seller and create a mutually-beneficial transition plan. 

  • Ask: Is the seller willing to share the risk with you?
    • Are they ok with a holdback or earnout?
    • Will they offer seller financing?
  • Make a transition plan.
    • Who will run this practice post-sale?
    • How much will they be paid to do so?
    • Which employees will stay?
    • How long of a transition period is the seller and key employees willing to agree to post-sale?