5 Mistakes PT Practice Owners Make When Selling (and How to Avoid Them)

Mihama Acquisitions has represented practice owners across 46 states and closed over 250 transactions. Across those deals, certain seller mistakes appear repeatedly — and they consistently destroy value. Most of them happen before a single offer is on the table.

Mistake 1: Negotiating with a Single Buyer

The most common and most costly mistake is accepting a direct approach from a buyer and negotiating privately without running a competitive process. When a buyer contacts you directly, they are doing so because they believe they can acquire your practice below what a market process would establish. They have spent significant time and resources identifying you, analyzing your practice, and crafting an offer designed to feel compelling while leaving margin for themselves.

Leverage in an M&A negotiation is not a function of how good your business is. It is a function of how many credible buyers are simultaneously at the table. A single buyer — no matter how enthusiastic — has no incentive to increase their offer without competition. The gap between what a single direct buyer offers and what a competitive auction produces can be substantial — and it is largely explained by process, not practice quality. Buyers who approach you directly know they have no competition, which means they have no incentive to put their best number forward. A well-run auction changes that dynamic entirely.

Mistake 2: Going to Market Too Early

Sellers who go to market before their financials are clean, their addbacks are documented, and their owner dependency is reduced are leaving money on the table in a different way. Buyers who see messy financials, high owner dependency, or unresolved compliance issues will either walk or heavily discount their offers to account for the risk they perceive.

The 12–18 months before going to market are the highest-leverage period for improving your outcome. Spending that time reducing personal clinical production, building management depth, cleaning up AR aging, and converting to accrual accounting consistently produces better results than going to market quickly in an unoptimized state.

Mistake 3: Underestimating the Addback Opportunity

Most practice owners significantly undercount their EBITDA because they don't systematically identify every legitimate addback. Personal vehicle expenses, above-market owner salary, family member compensation, one-time legal fees, de novo startup costs for locations since closed, and personal health expenses are all potential addbacks — but only if they are identified and properly documented before the audit.

Every dollar of legitimate addback that survives due diligence increases your enterprise value by whatever multiple the buyer is applying. On a 6x deal, identifying $50,000 in additional addbacks is worth $300,000 in proceeds. This is one of the most concrete ways an experienced advisor pays for themselves many times over.

Mistake 4: Disclosing the Sale to Staff Too Early

Premature disclosure to employees is one of the most damaging things that can happen during a sale process. Staff who learn about a potential acquisition often begin looking for other jobs, reducing productivity, and creating patient care disruption — all of which can be observed by buyers during site visits and due diligence, and all of which can reduce your valuation or cause a deal to fall apart.

A well-managed sale process maintains complete confidentiality until the deal is fully closed. Site visits are conducted after hours. Management calls are framed as strategic conversations rather than sale negotiations. The buyer list is kept confidential. Staff are notified only at closing, which is the point at which their employment situation is actually defined and secure.

Mistake 5: Focusing Only on the Headline Number

The LOI that offers the highest enterprise value is not always the best deal. Deal structure matters enormously. Key terms to evaluate alongside the headline include:

• Escrow percentage and duration: Buyers typically hold 5–10% of proceeds in escrow for 12–24 months to cover potential indemnification claims. A lower escrow percentage or shorter duration meaningfully increases your day-one liquidity.
• Earnout structure: Earnouts tie a portion of your proceeds to future performance metrics. They can be valuable if the targets are reasonable, but they add complexity and risk. Scrutinize the measurement methodology carefully.
• Employment agreement terms: The length, compensation, and operational autonomy of your post-close employment agreement significantly affects your quality of life for the next two to five years. A higher headline with a restrictive employment agreement may be worth less to you personally than a slightly lower offer with favorable terms.
• Non-compete scope: Pay attention to geographic radius and duration. An overly broad non-compete can limit your professional options for years after the sale.
• Cultural fit: Reference calls with former clients of each buyer are invaluable here. How a buyer treats sellers post-close is much more predictable from their track record than from anything they say during the negotiation.