The Healthcare Sector Is Booming—Are You Advising These Owners?

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The Healthcare Sector Is Booming—Are You Advising These Owners?

Henry Schein became a $12 billion business, firmly ensconced in the middle of the Fortune 500, by focusing on one tiny niche within the small business market: dental practices. While most people picture a dentist with a drill in hand, behind every practice is an owner striving to build a successful business. Henry Schein recognized that need and became the go-to supplier, not just for equipment but for the tools dentists needed to run and grow their businesses.

That’s why this month’s Advisor Marketing News is focused on healthcare clinics—a massive but often overlooked segment of the small business market. In the US, tens of thousands of clinics generate $1M–$10M in revenue, from dental and physiotherapy offices to outpatient care centers and specialty practices like dermatology and cardiology. While these businesses are mission-driven, their owners still face the same challenges as any entrepreneur: growing, hiring, and preparing for an eventual exit.

These clinics may not make headlines, but they are highly profitable and primed for the kind of strategic guidance that helps them grow—and ultimately sell. For advisors looking to carve out a niche, healthcare is fertile ground.

📅 We're hosting a webinar on March 27th at noon EST to explore strategies for advising healthcare clinic owners. It will be hosted by John Warrillow, author of the bestselling books Built to Sell, The Automatic Customer, and The Art of Selling Your Business. He’ll share insights on how to attract healthcare clinic owners and position their practices for a more valuable exit.

Register Here

How Healthcare Stacks Up

Healthcare clinics are among the most profitable companies in the small business segment. Twice as many healthcare clinics boast gross margins of over 80% compared to businesses in other industries.

They also enjoy reliable cash flow that provides stability and predictability, making them attractive to acquirers. This further indicates that these owners have the ability to pay for your services and implement the recommendations you’ll make.

Another advantage of this sector? Healthcare clinic owners receive twice as many acquisition offers as other business owners, meaning they’re regularly confronted with their business’s value. Unlike other industries where owners might ignore valuation until they’re ready to sell, healthcare owners are being reminded of it early. That makes value building an idea that’s already squarely on their mind.

The Fly in The Ointment – How You Can Help

On the surface, it all sounds like good news. Yet, despite all the acquirer demands, these owners often find themselves frustrated by the offers they receive. On average, healthcare clinics see lower multiples than their peers in other industries, driven largely by the acquirer’s concerns around owner dependency.

Small medical clinics often face lower valuations because they tend to be too dependent on their owner. The key challenge for a healthcare owner is to ensure that patients and staff aren’t overly reliant on them. The more a clinic depends on the owner for patient relationships and daily operations, the harder it becomes to sell.

Larger medical clinics, on the other hand, are attracting above-average valuations. This suggests that lower valuations aren’t a reflection of the medical industry itself but rather a result of very small practices being too dependent on their chief practitioner.

In smaller clinics, the owner isn’t just running the business; they are often the primary revenue driver, making the clinic a riskier acquisition. Larger clinics, where the owner clearly can’t perform all the services themselves, don’t face the same valuation discount.

Acquirers see them as more stable and capable of running independently, which is why they command higher multiples. They want confidence that revenue won’t drop the moment the owner steps away. When patient relationships, key decisions, and day-to-day operations are deeply tied to the owner, acquirers hesitate—or lower their offer to account for the risk.

But stepping away can be hard for owners in the health care segment. Many healthcare clinic owners have spent decades building deeply personal relationships with their patients and creating legacies they want to protect. In fact, healthcare owners are 48% more likely than the average business owner to say their biggest fear when selling is that their legacy won’t continue.

How to Find Healthcare Clinic Owners

Reaching healthcare clinic owners in the $1 million to $10 million revenue range requires a targeted and thoughtful approach. Many of these owners, such as dentists, physical therapists, or outpatient clinic operators, are focused on patient care and may not yet realize the value of preparing their clinics for an eventual sale. Here’s how you can connect with them:

🩺 Leverage Industry Codes and Directories
Use NAICS codes to target mid-sized healthcare businesses, including dentists (621210), physical therapists (621340), outpatient care centers (621498), and diagnostic labs (621511). Tools like LinkedIn Sales Navigator, state medical boards, and association membership directories can help you identify business owners who fit the $1M–$10M range.

🤝 Tap into Vendors and Consultants
Medical supply vendors, practice management software providers, and industry consultants have direct relationships with healthcare business owners and often know which practices are preparing to expand or transition. Building partnerships with vendors in areas like billing, equipment, and operational consulting can lead to strong referral opportunities.

🎟️ Attend Healthcare Events
Industry conferences, trade shows, and regional business expos focused on private healthcare practice management, operations, and growth are ideal places to meet owners. Events catering to dental, therapy, and outpatient clinic owners often include breakout sessions on succession planning where business owners are actively looking for advice.

📈 Monitor Local M&A Activity
The healthcare sector is seeing significant consolidation, with private equity and larger healthcare groups acquiring small and mid-sized practices. Keeping an eye on regional M&A announcements, industry deal reports, and local business journals can help identify owners who may be considering an exit but haven’t yet taken the first step.

🌐 Engage with Healthcare Networks
Many healthcare business owners participate in local, regional, and online professional networks that focus on business growth, practice management, and industry best practices. Engaging in these communities—whether through LinkedIn groups, small business forums, or state-level healthcare associations—can position you as a go-to advisor.

📍 Focus on Multi-Location Practices
Practices that have expanded to 2–5 locations are often in the $1M–$10M revenue range and are more likely to be thinking about their long-term strategy. Looking for businesses that are hiring aggressively, opening new clinics, or investing in operational infrastructure can reveal owners who are ready for a conversation about planning their next steps.

Working With These Owners

For many small healthcare clinic owners, the business is them. Patients ask for them by name, referrals depend on their reputation, and every major decision—hiring, pricing, equipment purchases—runs through them. That setup might feel like it’s working day to day, but when it comes time for the owner to step back or sell, it becomes a problem.

Shifting from a model that ties the owner directly to the clinic to one that allows them to step away more easily when the time comes requires strategic changes. Whether it’s rebranding the business, narrowing its services, or streamlining patient flow, these changes make a clinic easier to run today and more valuable to an acquirer later.

For example,

1. Brand the Business, Not the Owner
   When the practice name is tied directly to the owner (think “Dr. Smith & Associates”), it reinforces patient dependency. Encouraging owners to build a standalone brand makes the practice more transferable and allows younger practitioners to take on a larger role.

2. Narrow the Focus
   A seasoned practitioner may be comfortable handling a broad range of procedures, but that breadth often keeps them tied to the business. By specializing in a smaller set of services and referring out complex cases, owners can create a structured, repeatable model that isn’t reliant on their personal expertise.

3. Systematize Patient Flow & Treatment Protocols
   Standardizing treatment plans, appointment structures, and patient hand-offs reduces reliance on the owner to be involved in every care decision. Healthcare owners who create detailed Standard Operating Procedures (SOPs)—especially for the patient experience, service delivery, and follow-up processes—can build consistency that allows other practitioners to step in with confidence (download our free Definitive Guide to SOPs eBook). The goal? Patients trust the practice, not just the owner.

The biggest challenge for healthcare clinic owners isn’t just increasing revenue—it’s making their business less dependent on them. Acquirers won’t pay a premium for a practice that can’t run without its owner. Helping owners shift patient trust from the individual to the business, streamline operations, and create consistency will make their clinics more attractive, more valuable, and ultimately, more sellable.

Learn More at Our Webinar

Want to go deeper into strategies for advising healthcare clinic owners? Join our upcoming webinar on March 27th at noon EST. Best-selling author John Warrillow (Built to Sell) will reveal:

• How to position yourself as the go-to advisor for healthcare clinics.

• Why owner dependency is the biggest threat to healthcare valuations—and how to fix it.

• Proven strategies to help healthcare clinic owners step back and grow.

✅ Save Your Spot

🛒 In case you missed it: Last month, we explored retailers and what it takes to position yourself as their go-to advisor.

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📖 Bigger isn’t always better when it comes to finding the right clients. Many advisors overlook businesses earning $1-10 million in revenue—we call them Zebras. These companies are often the best clients for advisory services. Our latest whitepaper, Zebras: Why the Best Customers Are Hiding in Plain Sight, breaks down what makes this segment unique, where to find them, and how to win them as clients.

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This Issue's Contributors

Jason Reilly, Vice President of Marketing; Michael Sarkis, Director of Advisor Marketing; Deanne Kong Ting, Director of Customer Success; and Jen Chou, Senior Graphic Designer.