Los Angeles Dermatology Practice, 35-Year Cosmetic & Medical Derm in Affluent LA

$2.2M

Revenue

$1.4M

SDE

2.1x

Multiple

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Full Editorial Writeup

This is a general and cosmetic dermatology practice operating in an affluent pocket of Los Angeles since 1989. It delivers medical dermatology, wrinkle treatments, sclerotherapy, dermal fillers, skin checkups, and related cosmetic services. The business is cash-pay only, meaning it does not accept insurance, an intentional decision to protect margins and avoid reimbursement friction. On $2.2M of revenue it throws off $1.36M of SDE, a 62% owner-earnings margin that is extraordinary for a single-provider clinic.

The kicker here is capacity. The selling physician is the sole licensed provider and works only about 70 hours per month, roughly a week off every month, and she deliberately dialed back further in late 2024. There is no nurse practitioner, no marketing spend, and no insurance panel. In other words, this level of profit is being produced on a fraction of a full schedule by one part-time doctor with three support staff.

The practice's edge is its brand and location: a top-rated, reputation-driven clinic serving affluent, discretionary-spend patients who value the cash-pay, high-touch model. The obvious risk is provider concentration, since the entire clinical output currently runs through the retiring owner. A buyer's whole thesis rests on transferring that patient flow to added providers and expanded hours without diluting the premium positioning.

Why we like it

Earnings quality is exceptional: $1.36M SDE on $2.2M revenue is a 62% margin, and it is cash-pay only with zero insurance receivables or reimbursement risk. There is no collections lag or payer denial drama, which makes the cash flow unusually clean for a medical practice. At a 2.06x SDE multiple this prices like a services shop, not a premium derm asset.
Durability and moat come from a 35-plus year reputation in an affluent LA submarket where patients pay out of pocket by choice. Cosmetic and medical dermatology to a wealthy patient base is sticky and referral-driven, and the top-rated brand is a real barrier for new entrants. Skin care, skin cancer checks, and aesthetic maintenance are recurring by nature as patients return on cycle.
Market tailwinds favor cosmetic dermatology: aging affluent demographics, growing acceptance of injectables and fillers, and a self-pay model that sidesteps reimbursement compression. Medical dermatology is genuinely recession-resistant because skin checks and treatments are not deferred indefinitely. The cash-pay positioning also insulates the practice from the payer-rate cuts squeezing insurance-based clinics.
The operator advantage is enormous slack in the current model. The owner runs this on roughly 70 hours a month with no marketing, no insurance, no NP, and non-traditional hours. A buyer who adds a provider, expands to a 40-hour week, and turns on basic marketing is buying a business built to double without acquiring a single new competency.

How to improve it

Recruit and onboard a nurse practitioner or associate dermatology provider within the first 90 days to add clinical capacity. With the owner staying up to a year at half workload, you can layer in a second provider and transfer patient relationships while she is still present. This directly attacks the single biggest constraint on revenue and de-risks provider concentration.
Extend clinic hours from the current part-time schedule toward a traditional 40-hour week. The practice is closed roughly a week a month and runs limited hours, leaving obvious appointment slots unfilled at a location with proven demand. Simply matching normal business hours captures revenue the brand is already generating demand for.
Turn on marketing from a standing start, since the listing states there is none today. Build a basic local SEO presence, Google Business optimization, targeted paid social for aesthetics, and a patient reactivation campaign to the existing base. In an affluent, review-driven aesthetics market, even modest spend should move new-patient flow meaningfully.
Evaluate a selective insurance strategy for medical dermatology only while keeping cosmetics cash-pay. The owner intentionally avoids insurance to protect margin, but accepting a few high-value plans for skin cancer and medical visits could fill the schedule and feed the cosmetic funnel. Model this carefully so it adds volume without cannibalizing the premium margin.
Expand the aesthetics service menu with higher-ticket, high-margin procedures like laser resurfacing, body contouring, or memberships. The affluent patient base and existing filler and wrinkle demand support cross-selling into recurring maintenance packages. Introduce an aesthetics membership or treatment plan to convert episodic visits into predictable recurring revenue.
Build a management and clinical layer so the practice is not dependent on a single provider. Document protocols, add a practice manager function, and formalize the patient panel so goodwill survives the owner's exit. This both protects value and sets up a platform for adding a second location or acquiring a nearby practice.

Diligence notes

Scrutinize provider concentration and patient transferability, since the owner is the sole licensed provider and is retiring. Confirm how much of the patient loyalty is to her personally versus the brand and location, and stress test what happens to volume if a new provider is not accepted as warmly. This is the single largest risk to the deal.
Reconcile the SDE against actuals given the owner's declining hours. The listing notes she cut her workload further in late 2024 and cites a 2026 SDE forecast of $1.3M as of August, so verify trailing twelve month financials, tax returns, and monthly production trends. Make sure the $1.36M SDE reflects real recent performance, not a peak or a forecast.
Validate the cash-pay revenue mix and average ticket by service line. Understand what share comes from cosmetic injectables versus medical dermatology, and how sensitive that discretionary aesthetics revenue is to a downturn. Confirm there are no undisclosed insurance receivables, discounting, or one-time revenue spikes inflating the numbers.
Review the lease terms, licensing, and staff continuity. Rent is $5,870 per month on a leased space, so confirm remaining term, renewal options, and assignability. Verify the three support employees will stay, check California medical practice ownership and MSO structuring requirements for a non-physician buyer, and confirm all provider licensing and malpractice history.

Source

Originally listed on BizBuySell. View original listing →