There are a few ways to value a practice, but know that it is very complicated. This is just some thoughts for you to consider as you begin to value your practice. It is recommend having a professional help you to find the sellable value of your chiropractic practice. If there is a structural building involved, an appraiser would need to be contacted for an accurate value.
Business value is influenced by a number of factors including the last three years profit, revenue, goodwill, debts, branding, equipment (type and quality), and patient lists (current and past). Your accountant should be able to help you with determining the value of hard assets.
The value of patient files and lists will vary. Some things to consider that influence the value include the following:
- Age: When was the last time the patient was in your office?
- Frequency: How often did this patent come into your office?
- Care: Was this patient seen for acute or chronic care? Was this a “wellness patient”?
- Competition: How many chiropractors are around you? What type of practice do they have compared to your practice? What other types of practitioners are around you?
- Marketing: How have you marketed your office? Can this be replicated by the buyer?
- Staff: Will the staff be staying or will a new team come onboard with the new doctor?
- Parking: Is there sufficient parking for clients? Is your office handicap accessible?
- Practitioner similarity: How closely does the buyer and seller practice chiropractic (adjustment style, personality, leadership, beliefs, and the like)?
- Transition: Will the seller help with transition? If so, for what time frame? For what cost?
- Honesty: Is the seller being honest and transparent with the buyer? Is the seller showing his/her last three years of tax returns for clarity on income?
There is a lot to consider in the process of buying or selling a chiropractic practice. Hopefully, this gives you some things to consider as you look into the value of a chiropractic practice.