Medical aesthetics practice owners have many options to consider when they begin to plan their exit from the market. I am often asked when succession planning should start, and my answer is always, “Sooner than you may think!”
Transitioning ownership is one of the most pivotal moments in a business’ life cycle. Thoughtful analysis and strategic planning can support a successful, sustainable transition for practice owners and the organizations they’ve built.
Succession planning is often misunderstood as a final chapter rather than an essential component of long-term business strategy.
In aesthetic medicine, exit planning requires careful coordination of timing, leadership transition, asset protection, and brand legacy. Prioritize strategies that include business valuation, reduce disruption, and safeguard future growth—even after leadership transitions.
There are four typical paths to succession planning to consider, and one does not exclude another. Owners may find themselves in some variation or combination of paths.
1. Hire an Associate
Traditional succession planning for a provider owner is to hire an employed associate that transitions into ownership over time. Patient care is carefully transitioned to the associate over time to ensure a smooth transition. A practice valuation is usually performed to determine the buy-in and buy-out terms and mechanisms for the current and future owners.
This can be attractive for both the existing owner and the employed associate because a strategically planned exit can allow for a smooth and predictable transition for all parties involved. Finding the right associate can take some time: The old adage is true that we hire slowly to vet candidates for their long-term fit on the organization. In this scenario, we recommend beginning succession planning as early as seven to 10 years prior to a complete exit from the market.
2. Sell to Private Equity
An increasingly popular strategy owners are turning to is selling their practice to private equity (PE). The owner will typically receive a cash payout at the initiation of ownership transfer and continue to work as an employee for a designated period of time, usually around three to five years. A practice valuation is performed in this scenario as well; however, the valuation method is different from the method used when transferring a private practice from owner to owner.
This approach is attractive to owners because they receive cash immediately and continue to draw a salary as an employee after the ownership transition. The ultimate phase-out of the previous owner and ensuring smooth transitions of patient care becomes a mutual responsibility of the prior owner and the PE group. Because owners are expected to continue practicing in this situation, planning to sell to a PE group should be approached as early as six to eight years prior to a full-market exit.
3. Sell To Another Private Practice
Some private business owners may opt to partner with another private practice to purchase their business. The buyer may find this attractive for many reasons, including the practice location itself, expanding their current patient base, and continuing the goodwill in place with the established patient population and practice reputation in the area.
This transition can take place closer to a planned exit, usually within 12 to 18 months in advance of a planned exit. A practice valuation is also typically performed to determine the sell price and terms of ownership transition.
4. Sunset & Close the Practice
Lastly, an owner may decide to sunset their business and close the practice altogether. In this scenario, equipment assets are sold, patients are informed with ample notice and offered referrals when appropriate, and patient records are securely stored for the required period (paper or electronic). The retention period for patient records is determined by your state’s regulations. Contracts and licensures are wound down in alignment with the planned exit timeline; administrative records are saved for at least six years, per HIPAA guidelines; and staff may be supported through early notice or transition resources.
Although this is likely a less lucrative exit strategy, it may be attractive to owners seeking a simple, autonomous exit that avoids the complexities of third-party involvement. When planned thoughtfully, this approach can preserve goodwill, protect the owner’s legacy, and offer a clean transition into retirement or new ventures.
How Do Owners Decide?
A comparative analysis can be performed for each of the outlined strategies to help owners determine what method, or combination of methods, is the best for them. In all cases, financial modeling through a practice valuation will inform all parties of the business’ financial and operational health, signaling optimal timing for a market exit and a clearly outlined transition.
During the transition, the goal is always to preserve a positive business culture and patient trust through a meticulous plan that makes the transition seamless. Exit does not mean end for the owner in play; it can mean an evolution through mergers, franchising, advisory roles, and beyond.
A well-designed succession plan starts with understanding your practice’s true value. Connect with VMG Health to develop a tailored strategy that supports a smooth and successful market exit.
