The r/MedSpa post asking whether an offer "sounds reasonable" lays out three facts that decide the answer, and only one of them is a price. A med spa is offered at one million dollars. It revenues around 850 thousand a year, qualified by the seller's own phrase "at best." The lasers are a few years old and probably need replacing. And it was a small physician-run practice where the physician largely practised alone.
That last fact is the most important sentence in the post, and the price is the least.
One times revenue tells you almost nothing
A services business is not bought for its revenue. It is bought for the earnings that survive the change of owner, and revenue is only the top line of that calculation. A practice doing 850 thousand in revenue at a 30 percent margin and one doing the same revenue at 8 percent are different businesses at the same price, and the gap between them is what the negotiation is actually about.
Two qualifications worth attention. The first is "at best," which is the seller describing a peak. A valuation has to be built on a run rate, not a best month, and a business sold on its best month is being sold on its best month for a reason. Ask for thirty-six months of monthly figures, not a yearly summary, because the yearly number hides seasonality and hides the month the owner stopped trying.
The second is the add-backs question. In a small practice, the owner's compensation, the owner's personal expenses running through the business, and the owner's own treatment revenue are all entangled with the profit figure. What the buyer is purchasing is the profit after paying a market wage to whoever does the work — and if the physician is the one doing the work, that wage has to be subtracted before the number means anything.
What actually transfers
The single most consequential line in the post is that the physician practised alone. That means the practice is largely a personal book plus a licence, and those two things behave very differently after a sale.
The client list transfers only if the clients come with it. Client records, contact details and treatment histories are transferable assets subject to the practice's own consent and privacy obligations, which is a question for local counsel rather than for a forum. What is not transferable is the relationship. The physician's clients chose the physician. Some will follow the new owner; some will use the change as the natural moment to stop. A buyer should assume retention is a range, not a hundred percent, and should require evidence about it — last-visit recency across the client list, spend distribution, and how much of the revenue comes from the ten largest clients, because a small practice with heavy concentration in a handful of clients is one retirement away from losing a third of its revenue.
The medical oversight arrangement has to be replaced, not assumed. If services are provided under a physician's supervision or ownership, and the physician leaves, the practice needs a substitute arrangement before the sale closes, not after. Whether a given service requires physician ownership or supervision, and what the arrangement must contain, varies by jurisdiction and is decided by the licensing board and a lawyer. This is a condition of the deal that belongs on the closing checklist rather than in a conversation after the deposit is paid.
The lease is part of the purchase. Remaining term, renewal options, assignment clause, and whether the landlord's consent is required to assign all determine whether the goodwill being paid for can actually be operated. A practice is priced on its location and a lease that ends in fourteen months makes that location a rental arrangement, not an asset.
Staff are a variable, not a fixture. If the practice ran with one physician and assistants, whoever stays after the sale is doing so voluntarily. Retaining the clinical staff is usually the fastest route to retaining clients, and it should be secured with commitments before closing rather than hoped for afterwards.
Price the equipment honestly, because it is a capital call inside the price
The post's own observation that the lasers are a few years old and probably need replacing is not a minor caveat. It is a purchase price adjustment, and in an equipment-heavy aesthetic practice it can be one of the largest line items in the deal.
Three separate numbers have to be established for each major device.
What it is worth now. Depreciated value based on age, condition, service history and remaining life of the consumable parts — the tube, the handpieces, the optics. Get the service records, the usage counters where they exist, and an independent technician's assessment rather than the seller's description.
What it will cost to replace. A fair offer deducts the replacement cost of anything that is at end of life, or negotiates the price down by that amount, rather than absorbing the capital call after closing. Where a replacement is a like-for-like unit in the same category — a fractional CO2 class device such as this portable fractional CO2 laser machine is a common core replacement in a laser-led menu — the point is not which model to buy but that the number goes into the offer and the room, the power supply, the ventilation and the licence conditions are confirmed before the purchase order, not after.
Whether it should be replaced at all. A device should follow client demand. If the revenue attributed to a device does not cover its replacement cost within a reasonable period, the correct answer is to stop offering that service, not to buy a newer version of it. Some acquired practices carry equipment that was bought for the owner's interest rather than for the menu, and the buyer is under no obligation to keep it alive.
The practical form of this is a capital plan: what gets replaced in year one, what can wait, and what gets sold. That plan is a negotiating document as much as it is a maintenance schedule.
The liabilities nobody puts in the brochure
Two inherited obligations are regularly underestimated, and both are subtractable from the price.
Unused prepaid packages, series and gift cards. Every prepaid treatment the previous owner sold and has not yet delivered is a service the new owner will have to perform at no further revenue. It is a real liability, and it can be substantial in a practice that pushed packages. Get the outstanding balance by client, and subtract it.
Refund exposure and cancellation terms. What the practice's intake terms promise about refunds, expiry and transferability carries over. A practice that sold long-dated packages with generous terms has sold future obligations.
Alongside those: outstanding device finance agreements and liens on the equipment, disputes or regulatory history, and whether any of the revenue rests on arrangements with referral partners that end when the owner leaves.
Structure the deal around the retention risk
Because the practice's value is concentrated in relationships that the seller controls, the deal should be structured so the seller has an interest in the transition working.
A transition period where the seller stays on for a defined number of months, introduces the new owner to the client book, and is contractually available for handover is worth more than a modest price reduction. A portion of the consideration held back or earned against measurable retention milestones — clients still active at months three and six — aligns both sides. So does a seller note, because a seller carrying part of the purchase price has a reason for the practice to succeed after the sale.
What should be avoided is the structure that transfers all the risk to the buyer: full cash at closing, no transition, no retention measurement, and no deduction for the equipment and prepaid liabilities. That combination is how a one-times-revenue price becomes two times revenue in the first year.
The question to answer before signing
Not whether one million is reasonable, because on the facts given it cannot be answered. The answerable question is what the buyer is purchasing: the earnings after a market wage to the person doing the work, the equipment at its real remaining life, the lease for its remaining term, the client list at its demonstrated retention, and an oversight arrangement that survives the seller's departure.
Once those five are priced separately, the number either works or it does not, and the negotiation stops being about the multiple and starts being about the assets. A practice bought at one times revenue with old lasers, a solo physician who is the entire book, no transition plan and a pile of undelivered packages is not a bargain at any multiple. The same practice with a measured retention rate, a replacement plan and a seller who stays for six months is a different transaction entirely.