Selling smart: How physicians can maximize value by partnering at their peak

J. Blake Peart, RRT, CM&AA

Too many physicians wait until they're ready to slow down before exploring the idea of a strategic or financial partner. By that point, margins may be thinner, patient volumes lower, and key staff already gone. The result? Instead of negotiating from a position of strength, they're left with few options beyond selling their building, liquidating inventory, or taking whatever terms they can get for an asset sale.

As a healthcare M&A advisor, I've seen this scenario play out more times than I can count, and it's frustrating because it's almost always avoidable. The best time to explore a partnership is not when you're ready to step away. It's when your practice is thriving, your reputation is strong, and you still have the energy and desire to keep working for at least the next five years. That's when partners will pay a premium and bring the kind of resources that can help you grow even faster.

A well-timed partnership can give you immediate benefits like access to growth capital, expanded infrastructure, recruitment support, and improved reimbursement rates while also positioning you for a future liquidity event down the road. But those outcomes only happen if you prepare early and structure the deal the right way.

Preparing for a strategic or financial partner isn't just about deciding when to act. It's about strengthening the fundamentals of your practice so it's attractive, stable, and ready for scrutiny. That process comes down to a few critical areas.

Control debt before it controls you

Debt is a reality for most practices, but it must be managed strategically. Over-leverage can choke growth, delay needed investments, and drain working capital if patient volume dips. When financing an office buildout, equipment purchase, or expansion, ensure the cost fits a sustainable revenue-to-expense model.

Any debt you carry when you bring on a partner will factor into the transaction and can reduce the overall value you receive. While reasonable operational debt is expected, anything that signals unnecessary financial risk will raise concerns. Keep debt in check so it supports — not subtracts from — your value.

Clean books are a silent deal-maker

Clean, transparent financials are non-negotiable. Many physicians keep books just good enough for tax season, but that's not enough for a potential partner's due diligence. Nearly every potential partner will commission a quality of earnings (QofE) review by a third party. If it uncovers issues like commingled personal expenses, incomplete records, or questionable add-backs, your valuation can drop and negotiations can stall.

The right accounting team will go beyond tax compliance. They'll produce monthly profit-and-loss statements, maintain accurate billing and collections reports, classify expenses correctly, and provide strategic guidance. To a partner, well-organized books signal a professionally run practice worth paying a premium for.

Build a leadership team that's bigger than you

In most physician-owned practices, the owner is the business. That makes partners nervous. They want to see that patient care and business operations will continue seamlessly even if you step back from day-to-day management.

This means developing both an administrative leader — like a seasoned practice manager or COO — and a clinical leader, such as a senior associate physician or lead advanced practice provider. Building this leadership bench takes time, but it signals operational stability and lowers transition risk.

Retaining top people requires engagement and incentives. Share performance metrics regularly, celebrate successes, and consider profit-sharing or production-based bonuses. A stable, loyal team can add significant value in a partner's eyes.

Partner when you're at your peak

The ideal time to take on a partner is when you least feel the need — when your margins are strong, your patient pipeline is full, your staff is engaged, and you still plan to work for several more years.

I often tell physicians that this is the hardest advice to follow, because when things are going well, selling equity feels unnecessary. But it's exactly when you're at your best that you'll have the most leverage and the most choice in strategic and financial partners.

Waiting until reimbursement pressures, burnout, or declining performance set in will almost always result in tougher negotiations and lower offers. A partnership from a position of strength gives you immediate resources and a better long-term trajectory.

Always think about value

Your ability to secure the right partner isn't determined in the months before you start looking. It's built over years through decisions about debt, financial discipline, staffing, and leadership.

In my experience, the physicians who see the greatest success are the ones who treat readiness as part of running the business and not a scramble that begins when they're ready to exit.

Keep your financials investor-ready, debt manageable, and your team capable of running operations without your constant oversight. This approach not only makes you more attractive to partners but also gives you the flexibility to move quickly when the right opportunity appears.

Don't go it alone

Taking on a partner is one of the most complex and high-stakes business decisions you'll make. Potential partners are skilled negotiators who know how to spot weaknesses and use them to lower their offer. Surround yourself with the right advisory team, including a transaction advisor with deep healthcare experience, a knowledgeable accountant, and skilled legal counsel, to anticipate and, if necessary, counter these tactics.

The right team will also identify potential red flags early so you can address them before you go to market or they derail transaction negotiations. Transparency and preparation build trust and keep deals on track.

Lay the groundwork now

The earlier you prepare, the more options and negotiating power you'll have when it's time for your practice to take on a partner. That preparation pays off immediately in the form of better terms, greater resources, and a stronger platform for growth.

And if you choose the right partner and structure the deal well, there's an added upside: the chance for a future payout when your partner is acquired or recapitalized. In M&A, that's the "second bite of the apple." But the only way to get there — and to make that first bite truly satisfying — is to start now, while your practice is still at its peak.

J. Blake Peart, RRT, CM&AA, is a managing director for healthcare M&A advisory firm VERTESS where his work includes working with physicians to bring their practices to market. He has served as CEO for multiple hospitals of Fortune 500 companies, CEO for several large ambulatory surgery centers, and assistant professor at LSU, and sat on the boards for SCA Health and Kindred Healthcare.