As you begin crafting your exit from your plastic surgery practice, a succession plan is likely to cross your mind. Let’s be honest, the industry is full of ego’s, young and old, justified and not who can prospectively work for you. The question is, who will fill in the void you’ve left behind once you’ve stepped away from the business? Buyers ask themselves the same question and they’re willing to pay a premium for your practice if you have the “right” answer!

Mitigating Risk

MSOs and private equity buyers generally prefer practices with multiple providers because these operations are more stable and scalable. If the selling doctor is the sole provider, there is a higher risk of revenue decline after the sale. Associates, however, mitigate this risk by ensuring continuity of care and revenue. MSOs are more willing to negotiate favorable terms with a seller whose practice isn’t solely dependent on them. Sidenote, this also goes for other provider types as variability in service offerings and revenue streams provide an important hedge against future risk, or any key man risk in the business.

The Role of Associates in Sale Negotiations

For practice owners considering a sale, the presence of associates is not just a selling point—it’s a valuable tool when negotiating favorable post close terms. For instance, a seller that can show they’re “disposable” may be able to shorten their post-sale employment commitment, or reduce earnouts that are usually present in deal structures.

Furthermore, MSOs and private equity firms are more likely to provide competitive offers if they see that the practice is not overly dependent on the selling physician. It allows the buyer to get more comfortable with the possibility of a legacy doctor departing/retiring post close, thus helping to maximize the value of their investment.

The Impact of Scarcity in Plastic Surgery Graduates

Each year, only about 180 plastic surgeons graduate in the U.S., according to the American Council of Academic Plastic Surgeons. This limited pool of new talent creates a high-demand, low-supply environment, which can be a challenge for MSOs and private equity firms looking to expand or fill in the shoes of single-provider plastic surgery practices.

Thankfully, while the number of plastic surgery residents who are graduating is relatively low, the percentage of those graduates who indicate they’re not interested in practice ownership and/or leadership is growing, thus increasing the number of available associates to hire into your practice. Identifying those surgeons that you can bring in and retain through a sales process will be a big help as you’re introducing them to your new prospective partners.

Addressing the Concerns of Associates in the Practice Sale Process

Many practice owners are hesitant to initiate a sale due to concerns about how their associates might react. They may fear that associates will feel uncertain about their future or resent the change in ownership. This is a valid concern, but it’s important to remember that associates can benefit from the sale as well.

A well-executed sale to an MSO or private equity firm can provide associates with more resources, professional development opportunities, and access to advanced technologies. These firms often invest in the growth of their acquisitions, which can lead to increased marketing efforts, better patient management systems, and a more robust support structure—all of which can benefit the associates professionally. In many cases, when partnering with an MSO, associates will experience higher earning potential while minimizing the responsibility they have within the business.

Moreover, in many cases, MSOs and private equity firms offer lucrative retention packages to keep associates on board. Associates may receive bonuses, stock options, or other financial incentives to ensure their commitment to the practice post-sale. By framing the sale as a mutually beneficial opportunity, practice owners can foster a sense of collaboration and reduce any potential resistance from associates.

A Win-Win for Owners and Associates

Selling a plastic surgery practice with associates in place offers a strategic advantage in today’s healthcare M&A market. Buyers, particularly MSOs and private equity groups, prioritize scalability, stability, and long-term growth—all of which are bolstered by the presence of associates. Practices with a solid team of providers are not only more attractive but also command higher valuations, reducing the selling physician’s post-sale burden while ensuring a smoother transition and greater financial rewards.