Valuing the Family Practice
Standard Valuation Methods: Comparison
One way to value a Family Practice is to compare the Practice to others in the local area. While this may work for realty situations involving homes or buildings, it doesn't work in this case. The problem with this method of valuation for Family Practice is that there are too many intangibles involved. Not all Family Practices are the same size or serve the same patient base. There are too many variables to arrive at a reasonable sum.
Standard Valuation Methods: Inventory
The inventory method of valuation looks like a simple one. All assets are inventoried and a value is assigned to them. The values are added and the total liabilities are deducted, leaving a valuation sum. The problem with the inventory method of valuing the Family Practice is, again, the presence of intangibles. It's hard to assign a definite value to an intangible.
Standard Valuation Methods: Cash Flow
Cash flow valuation of the Family Practice takes income and accounts receivable into consideration. Too large a sum in the accounts receivable column can negatively affect cash flow figures and the attitude of potential buyers.
Standard Valuation Methods: Appraisal
Professional business appraisers usually take several issues into consideration when valuing the Family Practice. Cash flow and a potential practice growth in years to come are part of the process.
Standard Valuation Issue: Goodwill
One intangible asset that may be overlooked in the family practice valuation process is goodwill. Goodwill is an asset that is often defined by charisma and an inherent talent that invites trust. Goodwill includes the ability to attract and keep clients, reputation, etc. Some professional appraisers add goodwill to the valuation, others do not.
According to some reports, the assigned value of many Family Practices is 20 to 50 percent goodwill. This is an important figure. If the physician operating the practice is a large part of the reason the practice is successful, what would the family practice be without that physician?
Professional goodwill is a conglomeration of experience, reputation, charisma, skills, abilities, etc. of a physician. Practice goodwill is based more on location and the nature of the family practice and how long it has been in business.
Valuating Goodwill
One commonly used method of calculating the value of goodwill in a family practice is comparing the family practice to that of another physician with similar background and specialty. The low number is subtracted from the higher one. The resulting sum is then divided by 20 percent. The result is the goodwill dollar value.
If the need to value the family practice should arise, a general valuation or valuation method will be available. If a professional appraiser is chosen, it should be one who does use the goodwill factor.
Comments
Menu
My Articles
The Employee Manual In Family PracticeOffice Management And The Family Practice
Family Practices And Medical Malpractice
Open House Benefits In Family Practice
Support Staff For Family Practice
Designing & Furnishing The Family Practice
Why People Love A Doctor With A Family Practice
Medical Record Systems For Family Practice
Repositioning Your Family Practice For Future Growth
Choosing Family Practice For Replacement Therapy.
Making The Most Of The Family Practice Website
Cash Only Family Practice Pros And Cons
Marketing The Family Practice
Making Certain That Your Family Practice Doesn't Grow Out Of Control
Implementing Office Systems In The Family Practice
Challenges Of Family Practices In Today's Health Care System
Valuing The Family Practice
When Your Family Practice Physician Retires
Choosing A Family Practice Facility
Recognizing And Accepting Family Practice
Goodwill In Family Practice Success
Women Are Changing Family Practice
Tax Entities And Family Practice
Rising Liability Insurance Rates Hurt Family Practices
My Articles When Your Family Practice Physician Retires You may have had the same family practice doctor for a great number of.. Building A Patient Base In Family Practice The whole point of a family practice is treating patients. Once the clinic is.. Women Are Changing Family Practice Today more than ever women are helping to change the face of family.. Medical Record Systems For Family Practice Many clinic and medical care facilities can tell horror stories.. |
|
|
Related News:
|