The practices you already own decide whether the next one works

Every group I talk to that are planning their next acquisition tend to focus on the next location, the next deal. But from my perspective they're not looking hard enough at what's really going on in the ones they already own. It makes sense though, because expansion feels like progress. Buying the next practice is visible, tangible momentum that shows the group is growing. But growth on a fragile foundation isn't really growth. So although optimising what you already have is less exciting, it's what determines whether the expansions are even sustainable.

If a group has say 8 locations, with full schedules, collections looking fine and everyone busy, but underneath that there's lapsed recall nobody's worked in months, countless treatments that got diagnosed and never scheduled, one provider producing 35% more than another for reasons nobody's investigated, or no-show rates twice as high in two locations than the rest. What does that tell you about how the next locations are going to go? This sort of important data and context doesn't show up in the P&L, yet it all represents real value. If you're not taking it into account, you're buying location 9 which will end up with its own version of the same leaks. And before you know it, you're running the same suboptimal performance across even more locations now.

This all matters because of how it impacts your capital. The cash you'd use to fund good expansion is partly sitting inside your existing practices right now, uncaptured. Recover it first, and your next deal is funded by performance instead of purely by debt, and in 2026 this difference matters. The cheap debt that made roll-ups easy is gone, hold periods have stretched, and I believe buyers and sponsors will increasingly be less willing to pay for growth potential, and more focused on how each location performs. Same-store execution is the number that matters now of course, and adding locations on top of weak ones doesn't hide that anymore but actually compounds it.

This is why the sequence I'd argue for is contrary to the norm. Before you expand, get a real read on what the practices you already own are capable of producing versus what they produce today. A proper quantified picture of where the recoverable revenue is, netted down to what's realistically recoverable, location by location, provider by provider. Fund from that first. Then expand from a base that works, into deals you can underwrite with your eyes open because you finally know what good looks like in your own group.

The groups that scale well aren't the ones that buy fastest, or even the ones that buy the best deals. They're the ones whose existing locations are already running at what they're capable of before they add the next one.