PracticExit · Preliminary Exit-Readiness Evaluation · Sample Report
Suburban Foot & Ankle Associates
Podiatry · Suburban Chicago Market (Naperville, IL)
2 Providers · 8 Staff · Owner Age 62 · 18 Years in Practice
Goal: Sell or partner with a larger group
Exit-Readiness Score
Sample report using mock data. Your report will reflect your actual practice.
Executive Summary
Annual Revenue
$1,820,000
Adjusted EBITDA
$422,000
23.2% margin
Valuation Range
$1,470,000 – $2,310,000
3.5x–5.5xx Adj. EBITDA
Suburban Foot & Ankle Associates is an established podiatry practice operating in a suburban Chicago market. With 18 years of operation, two providers, and approximately $1,820,000 in annual revenue, this practice represents a solid foundational asset for a potential buyer or group partnership.
The overall exit-readiness score of 72/100 (Moderate) reflects reasonable financial performance tempered by meaningful operational risks — particularly around owner dependency. With targeted pre-sale improvements, a score in the 80–85 range is achievable within 12–18 months.
Based on the provided mock data, this practice may fall in a preliminary valuation range of 3.5x–5.5x adjusted EBITDA, or approximately $1,470,000–$2,310,000 before deal-specific adjustments. This range is for preliminary planning purposes only.
Exit-Readiness Score Breakdown
Overall Score
72/100
Moderate — Addressable with a 90-day plan
Well-positioned for a transaction. Minimal pre-sale work required. Buyers will be competitive.
Solid foundation with addressable gaps. An improvement plan is recommended before marketing to buyers.
Significant issues identified that will affect buyer pricing, deal structure, and certainty of close.
Financial Cleanliness & Billing and Collections
Financial Cleanliness — 78/100
The practice's financial records are generally well-organized with three years of tax returns and P&L statements available. Owner compensation has been consistently documented.
Add-back opportunity: Estimated $30,000–$50,000 in discretionary expenses (personal vehicle, owner CE, personal cell) have not yet been formally documented as add-backs. Proper documentation by a healthcare CPA before marketing could improve adjusted EBITDA and therefore valuation.
Billing & Collections — 70/100
Collections performance is adequate but not optimized. Estimated clean claim rate of 87% leaves meaningful revenue recovery opportunity.
Est. Clean Claim Rate
~87%
Industry avg: 94%+
Days in AR
~48 days
Target: <35 days
Medicare %
58%
Single-payer risk
Collection Rate
~92%
Slightly below avg
Improving clean claim rate to 94% could recover an estimated $40,000–$75,000 in annual collections.
Owner Dependency & Buyer Attractiveness
Owner Dependency — 55/100 ⚠️
This is the practice's most significant valuation risk. Estimated 70%+ of patient relationships and referral sources are directly tied to the owner-physician.
Buyers — particularly PE groups — heavily discount practices with high owner dependency because of the risk that patients and referrals will not transfer post-sale.
Buyer Attractiveness — 75/100
Despite the owner dependency concern, this practice scores well on buyer attractiveness due to its established brand, suburban market position, and consistent revenue growth.
Key Red Flags Identified
These are issues buyers commonly surface during due diligence. Addressing them before engaging buyers can reduce deal friction, protect your multiple, and improve deal certainty.
Estimated 70%+ of patient relationships tied directly to the owner-physician.
Medicare represents approximately 52% of collections.
Remaining lease term is 2.5 years with no executed renewal option.
Revenue concentrated in one location. Multi-site practices typically achieve higher multiples.
Value Improvement Opportunities
The following represent specific areas where pre-sale improvements are estimated to increase practice value or improve deal terms. Prioritize items with the highest ROI relative to your timeline.
Revenue Cycle
Improve clean claim rate to 94%+. Potential recovery: $40,000–$75,000 annually.
Owner Transition
Associate training now could improve multiple by 0.5x–1.0x.
Ancillary Services
Orthotics and wound care show untapped capacity: est. $80,000–$120,000 incremental annual revenue.
Lease Renewal
5-year renewal with options eliminates a key buyer concern.
EBITDA Cleanup
Documented add-backs for owner expenses: potential $30,000–$50,000 EBITDA improvement.
Recommended 180-Day Improvement Plan
A prioritized action sequence to meaningfully improve your exit-readiness score before engaging with buyers or brokers. These steps are sequenced for maximum impact.
Weeks 1–2
Compile 3 years of P&L statements, tax returns, and collections reports.
Weeks 3–4
Engage healthcare-specialized CPA for adjusted EBITDA review and add-back documentation.
Weeks 5–6
Initiate lease renewal discussion. Target 5-year term with 2 renewal options.
Weeks 7–8
Billing and collections audit. Identify top denial reasons.
Weeks 9–10
Begin associate or PA/NP recruitment to reduce owner dependency.
Weeks 11–12
Review and update provider contracts, vendor agreements, and HR documentation.
Suggested Next Steps Before Engaging Buyers
Engage a healthcare-specialized CPA to prepare a clean adjusted EBITDA summary with documented add-backs.
Initiate lease renewal discussions with your landlord before marketing the practice.
Consult a healthcare attorney to review provider contracts and employment agreements.
Begin associate recruitment or onboarding to reduce owner dependency before a formal process.
Request a formal certified business valuation from a licensed appraiser when you are ready to proceed to market.
Important Disclaimer
This report is a preliminary business evaluation for discussion purposes only. It is not legal, tax, accounting, investment banking, or certified valuation advice. The valuation range presented is based on publicly available market multiple data and the mock financial information provided. Actual transaction values depend on numerous factors including deal structure, buyer type, market conditions, due diligence findings, and negotiation. Final conclusions and decisions should be reviewed by qualified legal, tax, and financial professionals. All figures used in this sample report are fictional and for illustrative purposes only.