How much is my practice worth?

The short (and only real) answer is the amount someone is willing to pay for it.

However that probably isn't much use to you because how do you arrive in the right ball-park to begin with. Firstly you need to identify what you are selling as there may be a number of various types of assets making up the sale. Ordinarily this might include the freehold, items of equipment, stock of items for re-sale and maybe some debtors and creditors of patient treatments.

The freehold can be valued by commercial property surveyors. The value of the items of equipment can be listed and an approximate current value estimated and debtors and creditors can probably be obtained from your patient software.

However there is also goodwill.

What is this? Well techniquely it is the right to future profits. Broadly it is your patient list. Goodwill is a very real asset and exists in just about all industries and we see chiropractic clinics sold almost every week and each one contains an amount for goodwill. The only issue is how much?

Well, the two most important factors to arrive at the first estimate will be the current profit of the clinic and comparable evidence of similar clinic sales.

There are several other factors that we consider initially but the skill is to arrive at the correct value such that the clinic is not over-valued (which would waste time and put off otherwise possible purchasers) or under-valued (which would leave money on the table).

However even during negotiation other factors can play a part. Issues such as timescale, the number of interested parties, and the respective personalities of the vendor and purchaser can shift the value ultimately agreed. Using a third party in these circumstances may help you to achieve a better price whilst securing the deal.