As a practice sales specialist, the most common question I am asked by practice owners is: “What’s my practice worth?” Not too surprising, potential buyers most often ask: “How much should I pay for a practice?” So, how do buyer and sellers determine the value of a practice? There are 3 methods commonly used in determining the answer to these questions
METHODS USED TO DETERMINE THE VALUE OF AN
SELLER RESOURCES
Submitted by Randy M. Krivo, Licensed Business Broker, CMSBB, MBA
As a practice sales specialist, the most common question I am asked by practice owners is: “What’s my practice worth?” Not too surprising, potential buyers most often ask: “How much should I pay for a practice?” So, how do buyer and sellers determine the value of a practice? There are 3 methods commonly used in determining the answer to these questions:
- % of Gross Receipts
- Combination of Assets and Net Earnings
- Multiple of Net Earnings (SDE)