What is a solo therapy practice worth?

The honest answer is that it is probably worth less than you think, and the reason is arithmetic rather than pessimism.

This is the page the rest of this site does not write, because the rest of it is addressed to group practice owners. If you are a solo clinician wondering whether there is an asset here to sell, read this one first.

Why solo practices are valued so harshly

A buyer is not purchasing your revenue. They are purchasing the revenue that continues after you stop showing up.

In a solo practice those are close to the same thing, and that is the entire problem. The clients came for you. The referrers refer to you. There is no clinical director, no bench, no group contract — there is a licensed professional with a full calendar, and calendars do not transfer.

So the multiple sits at the bottom of the range: solo, owner-dependent practices run from about 1.2× at the small end to 2.2× at the top, against 3.4× for a group that demonstrably runs without its owner. The full tables are in what multiple do therapy practices sell for.

But the multiple is not what does the damage. This is.

The line that empties out most solo valuations

A buyer subtracts the cost of replacing your clinical production before applying any multiple — roughly 55 cents of every dollar you personally collect, fully burdened.

In a group, that deduction is a slice of earnings. In a solo practice, where you personally collect essentially everything, it is most of them.

Work an actual example rather than describing it.

A solo practice collecting $220,000 a year. Rent, EHR, billing, insurance and the rest come to $60,000. You take the remaining $160,000. There is $3,000 of interest and depreciation on the books.

Build up the earnings. Net income after your compensation is zero. Add back your $160,000 and the $3,000, and earnings before the replacement adjustment are $163,000.

Now the adjustment. You personally collected $220,000. Replacing that production costs about $121,000 fully burdened. That comes out before any multiple.

SDE is roughly $42,000.

Apply the multiple. At $42,000 of SDE this is a small, owner-dependent practice — 1.2×.

The practice is worth about $50,000.

A practice collecting $220,000 a year, that supports its owner comfortably, is worth around fifty thousand dollars. That is not a trick and it is not a lowball. It is what happens when the thing being sold is a job that only one person can do.

Why that number is not as bad as it feels

Two things are true at once, and holding both is the useful position.

The practice is a poor asset. It will not fund a retirement and it should not be in your plans as though it will.

The practice is an excellent business. It pays $160,000 a year to one person with low overhead, no payroll risk and complete control of the calendar. Most small businesses would trade places with it.

The mistake is not running a solo practice. The mistake is assuming that something which pays well while you run it must also be worth a lot when you stop.

What actually changes the number

The same arithmetic that produces $50,000 names the fix, and it is not subtle.

Add clinicians whose production is not yours. Suppose you bring on two associates who collectively collect $200,000. At roughly 55 cents on the dollar their cost is $110,000, and say another $20,000 of added overhead. That is $70,000 of additional earnings that carries no replacement deduction, because it was never your production.

Earnings go from $42,000 to about $112,000. And the practice is no longer solo — it is a group with associates, which at that size is 1.6× rather than 1.2×.

About $179,000, against $50,000. Roughly three and a half times, from a change in who sees the clients rather than a change in how hard you work.

That is the whole argument for building a group, stated numerically. It is also years of work and a different job from the one you trained for, which is a legitimate reason to decline it — but decline it knowingly.

How to increase the value of your practice sets out the order that work goes in.

If you are not going to build a group

Most solo clinicians will not, and should not have to. There is still a way to close the practice well, and it is worth planning rather than improvising.

A caseload transition has real value, just less of it. Another clinician or a local group will often pay for a warm introduction to an active caseload and the referral relationships behind it — typically structured as a share of collections over a period rather than a lump sum, because that is the only way a buyer can price something that may not stay.

Your referral relationships may be worth more than your client list. The physicians, schools and attorneys who send you work are an asset that transfers better than clients do, because the relationship is professional rather than therapeutic.

Continuity of care is not a negotiating chip. Your ethical obligations to clients govern how any transition happens, they are not subordinate to a deal timeline, and they need to be worked out with your own consultant before anything is agreed.

Set expectations accordingly: this is usually a modest sum paid over time, not a retirement event. Knowing that early is worth more than discovering it at sixty-four.

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Nothing here is legal, tax or accounting advice.

The valuation calculator handles solo practices and applies all of the above — the replacement adjustment included, which is the part that decides it. It is free, takes about four minutes, and it will tell you the real number rather than a flattering one.