Selling a Medical Business in Florida
A Guide for Florida Business Owners by Patrick Archer, MBA, CBI, CM&AP | Florida M&A Advisor | Calder Associates of Florida | 305.763.4112 (Mobile) 407.499.2855 (Office)
Selling a Medical Business in Florida
Selling a Medical Business in Florida is an important decision for owners of these essential business in the Sunshine State. Owners contemplating selling a Florida medical-related business or medical clinic must weigh the pros and cons of selling the business. Retirement is the primary motivating factor for most owners, while other owners may be planning to pursue new ventures in different industries.
Regardless of the motivations, sellers of medical businesses in Florida will want to package and price the business to stand apart from competing listings and attract potential buyers. Many of these buyers are looking to take ownership of a successful medical practice in Florida and tap into the positive demographics, population growth, median household income and other trends benefitting Florida small business owners today.
Timing Considerations when Selling a Medical Business in Florida
If you are the owner of a successful medical related business in Florida, now could be a great time to take advantage of these trends and the rising demand among U.S. and international buyers for great businesses for sale in Florida that are established, profitable, and resistant to external pressures like recessions, global pandemics and online retailers.
Selling an Medical Business in Florida today can also help sellers command top dollar considering the supply and demand imbalance of available medical businesses in Florida post-pandemic. While the pandemic wiped out thousands of small Florida businesses in sectors like restaurants, gyms and beauty salons, Florida medical related businesses emerged stronger and more attractive in the eyes of their owners, their customers, and potential buyers.
The Health Care Industry in Florida
Florida is home to more than 46,000 healthcare companies dedicated to serving the needs of the state’s growing and aging population. Foreign entrepreneurs looking to tap into this growing industry can choose from a wide variety of medical services delivered to patients either in-home or at a retail location near one of Florida’s 750 hospitals.
“Florida healthcare companies cater to the state’s growing and aging population”
Both licensed physicians and non-physicians can purchase medical businesses and clinics in Florida depending on the type of patient services offered. Licensed physicians can also purchase existing medical practices in areas like dentistry, pediatrics and obstetrics. Assisted Living Facilities (ALF) and in-home care providers are another niche opportunity to purchase an existing business that caters to Florida’s booming senior population.
The Role of Medical Clinics in Florida
The health care industry plays an enormous role in the state economy of Florida, especially given the high percentage of residents approaching or beyond retirement age. As health care costs continue to rise in the United States at an astronomical rate, millions of Florida residents turn to medical clinics for primary care services, specialty care treatments, and preventive care solutions that promote wellness and longevity.
“Florida residents look to medical clinics for specialty and preventive care.”
Many medical clinics in Florida perform a wide range of minor surgery, clinical testing and diagnostic services in conjunction with primary care physicians and private health insurance companies that recommend these clinics through established referral networks. Many of these clinics have licensed physicians in-house and offer a wide variety of services like acupuncture, chiropractic, dermatology, general surgery, oncology, podiatry and radiology among others.
“Florida medical clinics offer a wide range of surgery, testing and diagnostic services”
Florida is also home to a growing number of health and wellness clinics that promote non-traditional and holistic therapies for mind and body. Many cosmetic and anti-aging medical spas in Florida cater to wealthy residents in coastal regions with non-invasive procedures such as Botox, facial fillers and other aesthetic facial and skin treatments.
“Florida medical clinics offer a wide range of surgery, testing and diagnostic services”
The legalization of medical marijuana in Florida in 2019 has also led to an increase in the number of clinics and dispensaries statewide that receive patients and sell a wide range of products containing hemp-derived CBD oil to treat arthritis, anxiety and insomnia. As of January 1, 2020, the State of Florida began more closely regulating the sale of CBD products for both people and pets in Florida.
Skills needed to Operate a Medical Business in Florida
As in all states, the medical industry in Florida is highly competitive, highly regulated, and owners of the most successful medical businesses in Florida have many years of experience and hundreds of satisfied customers who depend on these local offices and clinics for their surgical, testing, diagnostic, pain management and holistic wellness services.
Current owners thinking of selling a medical business in Florida will want to know that potential buyers of the business have the operational knowledge, managerial skills and financial resources necessary to manage and grow the business for the next generation.
Most buyers of medical businesses in Florida will pursue SBA financing, and most SBA lenders will want to see that the buyer has some knowledge or experience in a medical business or field.
“Florida medical clinics provide surgical, testing, diagnostic, pain management and holistic wellness services”
Ideally, a future owner of a medical business in Florida would already have several years experience as an employee or owner/operator of a medical-related business in their home state or home country.
Many owners of established medical businesses in Florida will only consider selling their business to a buyer who has a proven track record of experience in the medical industry or a related segment of the health care industry, either as an employee or an owner/operator of the business. Most SBA lenders will view potential buyers through the same lens of relevant medical experience and qualifications.
Best Cities For Selling a Medical Business in Florida
For potential buyers open to living anywhere in the Sunshine State, sellers of medical businesses in Florida will be competing with other owners of similar business statewide. These buyers will be weighing several factors including a variety of demographic and quality of life metrics that will impact both their decision making process.
Florida’s population of 23 million is spread throughout the state’s 67 counties, but the largest clusters of high net worth households paying top dollar for health care services are concentrated in the southern half of the state along a ring of 14 coastal counties on the Atlantic Ocean and the Gulf of Mexico. This “golden horseshoe” of Florida demographics encompasses the 25 Wealthiest Zip Codes in Florida based on Average Gross Income.
“This 14-county coastal region is the Golden Horseshoe of Florida demographics.”
This 14-county coastal region extends from Tampa/St.Petersburg on the Gulf side, south to Naples/FortMyers and down to the Florida Keys, east to Miami/Fort Lauderdale and extends north through the coastal communities of Pompano Beach, Boca Raton, Palm Beach, Jupiter, Stuart, Home Sound, Port Saint Lucie, Vero Beach and Melbourne. Some of Florida’s largest and most profitable medical clinics and businesses are located in this 14-county coastal region.
And, of course, no conversation about desirable areas to live and own a business in Florida would be complete without mentioning the Orlando metropolitan area. “The City Beautiful” is one of the fastest-growing metros in the country, and the influx of new residents creates ample opportunities for new and existing business owners.
“With over 2 million residents, Orlando’s economy is booming and increasingly diverse”
Long known as a tourism mecca and home to theme park giants like Disney and Universal, Orlando’s economy is increasingly diverse. And world class infrastructure improvements like the new $3 billion Terminal C at Orlando International Airport facilitate domestic and international arrivals and intrastate travel with the addition of Brightline, a high-speed rail link between Orlando and South Florida metros like Miami, Fort Lauderdale and West Palm Beach.
Median Asking Price of Medical Businesses For Sale in Florida
Once you have decided on selling a medical business in Florida, it’s a good idea to work with a licensed Florida M&A advisor to get a better understanding of the current value of your business and a most probable selling price to qualified buyers looking to buy your Florida medical business with some combination of cash and financing, either through an SBA loan, seller financing, a bank loan, a leveraged buyout, assumption of debt, or some other mutual buyer/seller agreement.
According to the Florida database of businesses for sale, the median asking price for a medical business in Florida is $1,382,000 for existing businesses generating over $500,000 in annual revenue and over $250,000 in annual cash flow.
“The median asking price of Florida medical businesses for sale is currently $1,382,000”
The range of asking prices for Florida medical businesses for sale extends from $350,000 on the low end to $8,000,000 on the high end for Florida medical businesses generating over $500,000 in annual revenue and over $250,000 in annual cash flow.
Median Annual Revenue of Medical Businesses For Sale in Florida
With a talented medical team, solid referral network, strong reputation in the community and an established clientele, medical businesses in Florida can be great revenue generators for both current and future owners. According to the statewide database of businesses for sale in Florida, the median annual revenue for Florida medical businesses is $1,655,000 for existing businesses generating over $500,000 in annual revenue and over $250,000 in annual cash flow.
“The median annual revenue of Florida medical businesses for sale is $1,655,000”
The range of annual revenue for Florida medical businesses for sale extends from $560,000 on the low end to $2,940,000 on the high end for Florida medical businesses generating over $500,000 in annual revenue and over $250,000 in annual cash flow.
Median Cash Flow of Medical Businesses For Sale in Florida
Established and well managed medical businesses and clinics in Florida can produce significant cash flow benefitting both the current owner and future owners of these businesses.
“The median annual cash flow of Florida medical businesses for sale is $452,000”
According to the official database of businesses for sale in Florida, the median annual owner benefit or cash flow for a medical business in Florida is $452,000. As such, medical businesses for sale in Florida enjoy a median cash flow of 30% of annual revenues. ($452,000 / $1,382,000 = 32%)
The range of annual cash flow for medical businesses for sale in Florida extends from $275,000 on the low end to $1,966,000 on the high end for Florida medical businesses generating over $500,000 in annual revenue and over $250,000 in annual cash flow.
“The median payback period for a Florida medical business is 3.2 years.”
Based on these same numbers, the ratio of median cash flow to median asking price for Florida medical businesses for sale is 32% ($452,000 / $1,382,000) which translates into a median payback period of 3.2 years.
Additional Resources for Selling a Medical Business in Florida
Selling a Medical Business in Florida is a major life decision that requires serious due diligence and sound guidance from and experience and trusted M&A advisor.
If you would like to schedule an initial consultation regarding your Florida medical business, current valuation and next steps, please call us at 305.763.4112, schedule a free consultation, or use the contact form below.