Selling a Dermatology Practice Is Not One-Size-Fits-All

Why Do Dermatologists Feel Pressure to Sell When a Colleague Does?

You know how it goes. You are on the golf course, or sitting at a quiet dinner with a colleague, and they start talking about the sale of their dermatology practice. The check was great, the administrative work is gone, and they have never felt lighter. What you hear is the outcome: the number, the relief, the freedom to simply practice dermatology.

What you rarely hear is what it took to get there, or that their terms were built for their practice and not yours. Those stories travel fast, the good and the bad. They can create real FOMO, but before you act on it, you need to understand the why, the how, and the when.

What Are the Real Benefits of Selling a Dermatology Practice?

The benefits of selling your dermatology practice can be very attractive, and you can hear it in the reasons many dermatologists are open to this path.

Many dermatologists sell their practice to:

• Take some chips off the table and stop carrying all the risk of running a business.
• Partner with a group that takes on the administrative burden (HR, payroll, rate negotiation) so they can focus on what they do best: dermatology.
• Secure the last piece needed for retirement. They are nearing the day they finish being a clinician, and they want to lock down their retirement timeline and finances now.
• Create generational wealth by monetizing the asset they spent a career building and putting that value to work for their family.

What Did It Take for Your Colleague to Get to That Sale?

Your colleague did not wake up one morning with an offer, sign on the dotted line, and then the wire hit. They built that practice brick by brick and patient by patient until it became, most likely, the most valuable asset they own, and until they were ready for the next chapter. Yours is the same. That is the road that leads an owner to consider a sale, but what does it actually take to go through one?

What Are the Steps to Selling a Dermatology Practice?

At TUSK, every sale follows the same five-step process, the TUSK Proven Process. We tailor every step to your practice, but at its core, it goes like this:

1. Discover. A 60-minute conversation about your five-year vision and whether a sale fits it. We want to get to know you, understand why you are interested in selling, and learn what a good outcome looks like to you, what platform would be a good partner for you, and we start the process of valuing your dermatology practice. Within a week, our in-house analytics team prepares your valuation materials.
2. Educate. Over two to four weeks, we walk you through your valuation, the buyer landscape, and the deal structures that would fit your goals, so you can decide with full information whether it is the right time to sell your dermatology practice. The decision to sell or partner your dermatology practice is a major one, and you should take the proper time with the best resources to make an educated decision. If you decide to move forward, this is where we put an engagement agreement in place and we kick off the sales process.
3. Analyze. This is the preparation that protects your value. We gather your financial and operational data, study industry trends, and calculate adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), which means normalizing your financials for items like owner compensation and one-time or personal expenses a buyer will not carry forward. Then we build your story out, the marketing materials, and a virtual data room, so buyers see the full story of your practice and not just a spreadsheet.
4. Negotiate. We take your practice to market and field the offers. We model the deal structures side by side, because the biggest number is not always the best deal once you weigh the terms, and we create competitive bidding among buyers. You choose the partner, and we negotiate and sign a letter of intent (LOI) with them.
5. Close. The deal is not done until the ink is dry and the wire hits your account. We defend your numbers through the buyer’s quality of earnings review, work through the legal documentation, and keep every party moving until closing.

Notice that three of the five steps happen before your practice goes to market. The early work is about getting you educated and your practice ready. At TUSK, we want you to be ready and confident when you make the decision to sell. 

How Does an Advisor Fit Into a Practice Sale?

Your colleague likely did not run this deal alone, and if they did, they probably left out details like the late nights pulling reports for the quality of earnings firm after eight hours of patient care. A dedicated dermatology practice sale advisor, such as TUSK, takes that off your plate and simplifies a very complex process. The MSO or platform you are partnering with does deals every day. You do it once. That is information asymmetry, and an advisor closes the gap by filling in what you do not know and making sure your interests are well represented. At TUSK, the increase in valuation, the time savings, and the negotiation can pay our brokerage fee back 10 to 20 times over compared to your sale proceeds.

Why Won’t My Practice Sale Look Like My Colleague’s?

Dermatology valuations are based on a multiple of EBITDA, and what drives that multiple differs from practice to practice: the mix of medical and cosmetic work, Mohs and dermatopathology, provider count, how much production depends on you, payer mix, and market. Their terms reflect their practice, their buyer, and their timing. Comparing numbers without that context tells you very little.

You Don’t Know What You Don’t Know

A conversation with TUSK is a way to find out what is real in what your colleagues are saying and what is possible for your practice. We will cover what those stories mean for a practice like yours, what it may be worth, and which options exist, including waiting. There is no commitment and no timeline. When you are ready to start the conversation, Contact Us.