To maximize valuation and ensure a smooth transition, owners should begin planning 5+ years before selling.
Courtesy of lin at Adobe Stock
If you own a medical aesthetics practice, you shouldn’t think in terms of “someday” regarding your exit strategy—you should design it in advance. The practices that command premium valuations and smooth transitions start building for the outcome they want long before a buyer, partner or successor ever approaches.
This article is only available to registered users.
Log In to View the Full Article
If you own a medical aesthetics practice, you shouldn’t think in terms of “someday” regarding your exit strategy—you should design it in advance. The practices that command premium valuations and smooth transitions start building for the outcome they want long before a buyer, partner or successor ever approaches.
I’ve worked with business owners who sell for life-changing numbers and others who leave money on the table because their data around revenue is messy, operations aren’t streamlined or the business is built around the owner’s personal hustle.
According to the Exit Planning Institute State of Owner Readiness Survey [1], 83% of practice owners have no written succession plan, 60% of physicians said they would retire today if they could and 49% have done no exit planning at all. These sobering statistics highlight just how unprepared most owners are—yet also how much opportunity there is to differentiate yourself by getting exit-ready now. More importantly, these numbers underscore that without proactive planning, valuations can plummet, transitions can fall apart, and owners risk losing the wealth they worked so hard to build.
I’ll break down four common exit paths—acquisition, franchise, succession (family or internal) and IPO/merger—and the early decisions that make or break each one. I’ll also highlight how failing to prepare beforehand can cause deals to collapse or valuations to sink dramatically, so you can de-risk now and keep your options open later.
When to Start Planning Your Exit
Ideally, the time to start preparing is five years out before you plan to exit. This gives you the runway to clean up financials, document processes and build the right professional support team. The three “must haves” are a strong CPA, an experienced legal team (specializing in mergers & acquisitions in healthcare) and an operations team (both internal and outsourced). Depending on your size, you may also want to bring in a wealth/tax manager and an investment banker. Together, this team demonstrates to buyers that you run a professional business and are measuring what matters.
Equally important is defining your goals and narrative, including:
What makes your practice unique?
What specific approaches or philosophies do you attribute to your practice’s success?
Where have you been, and where do you want to go?
Why should someone invest in you?
Why do you want to sell?
Ask yourself:
What is your ideal future post-sale? Do you want to stay long-term as an employee or do you want to wrap up as soon as possible? Remember, a typical exit takes years, and investors are investing in people as much as the business. Many will require lengthy employment agreements (on average 4–5 years). If your business can run independently of you, you’ll have more leverage and may exit sooner.
Adopt an “Exit Now” Operating System
Whatever path you choose, sophisticated buyers and partners look for the same core five signals:
Clean, defensible financials with at least 24–36 months of monthly P&Ls, normalized owner add-backs, and clear service/retail/membership mix.
Compliance and structure that respects corporate practice of medicine rules (see AmSpa CPOM Overview [2]) and uses an MSO/physician entity framework where required.
Process-driven operations, including SOPs, training and KPIs, so performance is repeatable beyond the founder.
Scalable growth channels, such as membership/recurring revenue, retention and measured acquisition costs.
Leadership bench (team members ready to step into leadership roles) beyond the owner, with incentives aligned to stick through a transition.
The aesthetic market is consolidating, and investor interest remains active—especially for larger, multi-site operators with recurring revenue and tight compliance. But according to the AmSpa 2025 Medical Spa State of the Industry Report [3], only a small percentage of med spas are actually private-equity-owned today, which means well-run independents still have leverage if they prepare. The common thread is if you neglect these fundamentals, your valuation will drop and your exit options will narrow.
Operate your practice as if it's always for sale by maintaining clean financials, legal compliance and scalable systems.Courtesy of rfassets at Adobe StockExit Path #1: Acquisition (Strategic or Private Equity)
What it is: You sell your practice to a strategic buyer (e.g., multi-site operator) or to a PE-backed platform. You may roll equity, stay on for a transition or exit fully depending on deal terms.
What buyers require (start early):
Financial clarity. Segment revenue by provider, treatment category, location, memberships vs. one-time services and retail. Normalize owner compensation and non-recurring expenses.
Compliance and legal structure. According to McGuire Woods Legal Considerations for Medical Spas [4], in CPOM states, your physician entity should own the medical side while your MSO provides non-clinical services via a properly drafted management services agreement (MSA).
People and contracts. Button up employment agreements, restrictive covenants, medical director agreements, supplier contracts and lease terms (including assignment provisions).
Systems and data. Demonstrate standardized charting, HIPAA-compliant records, OSHA training logs, device maintenance logs and marketing attribution dashboards.
Value accelerators:
Membership revenue with low churn and high LTV/CAC.
Multi-location footprint or documented playbook to open the next location(s).
Injector productivity dashboards tied to training pathways and compensation.
Deal Killers I See (and How They Plummet Value):
“Owner-centric” revenue where you, the founder, do the top 40–60% of injections without a succession plan—this creates buyer risk and drops multiples instantly.
Non-compliant ownership or supervision structures in CPOM states—investors will either walk or restructure at a steep discount.
Material revenue from off-label or poorly documented treatments; device usage with no service records—this can cause buyers to renegotiate or abandon deals.
Exit Path #2: Franchise (Becoming the Franchisor)
What it is: You package your brand and operating system so franchisees can replicate it under a Franchise Disclosure Document (FDD).
What franchisors require (start very early):
A replicable model. Documented SOPs for every function.
Brand standards. Naming, visual identity and patient experience checkpoints.
Unit economics. Validate profitability in multiple markets.
Franchising before validating unit economics across multiple locations—this exposes weakness and erodes credibility.
Ignoring CPOM and state-by-state rules—non-compliance can unravel the model and make your franchise unmarketable.
Franchising amplifies your brand—but only if your model is turnkey. If you can’t hand an operations team your playbook and see the same results 1,000 miles away, you’re not ready.
Exit Path #3: Succession (Family or Internal)
What it is: You transition leadership and ownership to family members or internal leaders.
What successors require (plan 24–36 months ahead):
Leadership development. Shift key relationships and decision rights gradually.
Legal and tax planning. Structure buy-sell agreements, valuation, and financing.
Incentives aligned to outcomes. Profit interests, bonuses, or equity tied to EBITDA (earnings before interest, taxes, depreciation, and amortization),and retention.
Documentation. Same playbooks that make a business sellable also make it transferable.
Value accelerators:
Multi-year mentoring with measurable milestones.
Equity paths for key providers.
Deal Killers (and How They Erode Outcomes):
Announcing succession and then taking the foot off the growth pedal—this causes revenue declines that tank valuation.
Fuzzy or “verbal” buy-sell terms—these often blow up during closing and destroy continuity.
Exit Path #4: IPO or Merger into a Larger Platform
What it is: You merge into a larger operator, or—rarely—pursue a public listing.
What the market requires:
Scale and governance. Multi-site footprint, professional board, and audit-ready controls.
For independents, IPOs are rare. More often you’ll merge into a PE-backed platform. But if governance and compliance aren’t already in place, your valuation plummets and your seat at the table can just disappear.
To Recap
Exits don’t fail because the market isn’t interested—they fail because businesses aren’t positioned. When you fail to prepare, valuations plummet, leverage disappears and options close. Operate like an asset that someone sophisticated will underwrite: compliant structure, clean financials, repeatable systems and a team that can carry the torch.
Remember, the best time to start is five years out. Use that time to assemble your professional team (CPA, legal, operations, and advisors) while also defining your goals and your story. Ask yourself what makes your practice unique, why someone should invest in you and what your ideal post-sale future looks like. By doing this early, you’ll give yourself maximum leverage, ensure a smoother transition, and preserve the wealth you’ve worked so hard to build.
Checklist: Are You Exit-Ready?
☐ CPOM/MSO legal structure compliant in your state ☐ 3 years of clean, segmented financials
☐ Monthly close process with external review
☐ Documented SOPs for all operations
☐ Injector training and certification pathways
☐ Membership model with low churn
☐ Employment contracts + restrictive covenants ☐ Leadership bench in place ☐ Data room prepared (financials, legal, HR, compliance) ☐ Active growth momentum, not stalled performance
Operate your practice as if it's always for sale by maintaining clean financials, legal compliance and scalable systems.Courtesy of rfassets at Adobe Stock
Operate your practice as if it's always for sale by maintaining clean financials, legal compliance and scalable systems.Courtesy of rfassets at Adobe Stock
