Practice Valuation & Sale Terms to Know
EG Transitions Terms To Know For Doctors Selling & Buying A Medical Practice
- Goodwill vs. tangible assets — you're not just selling the chairs and equipment.
- Working capital — what happens to cash, A/R, inventory, and liabilities at closing.
- What happens to patient records — particularly important in healthcare transactions.
- Transition period — the seller may need to stay involved after closing.
- Buyer financing — a great buyer doesn't necessarily mean a financeable transaction.
- Don't make major changes right before selling — sudden staffing, hours, compensation, or accounting changes can create questions.
- The importance of clean financials — buyers buy the economics of the practice, not just the doctor's reputation.
- Closing isn't the same thing as signing — there are often conditions and deliverables that have to be satisfied first.
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Practice Valuations For Doctors
Medical Practice Valuation for MDs & DOs
Medical practices vary significantly by specialty, practice model, patient population, ownership structure, and the role of the physician in the day-to-day operation of the practice.
Two practices with similar financial performance may nevertheless have very different characteristics when considered for a transition.
EG Transitions evaluates each medical practice individually, taking into consideration the characteristics that contribute to its success and those that may affect its transition to another physician or ownership structure.
The relationship between the physician, patients, staff, referral sources, clinical services, and overall practice model can be an important consideration when determining how readily a practice may transition to a new owner.
Transferability is not assumed simply because a practice is financially successful. It is an individual characteristic of the practice that must be understood as part of the valuation and transition process.
Every medical practice is different, and the factors that influence its value and potential transferability will vary from one practice to another.
Podiatry Practice Valuation
Podiatry practices can be highly individualized, with significant differences in clinical focus, services, patient populations, referral relationships, and the role of the individual podiatrist. A practice may be built around general podiatry, diabetic and wound care, surgery, biomechanics, orthotics, or another specialized model.
These differences can have an important impact on the potential transition of a practice. A financially successful practice may appeal to a relatively specific group of prospective buyers depending on its clinical focus, business model, and the characteristics that have contributed to its success.
EG Transitions considers the individual characteristics of each podiatry practice when evaluating its potential value and transferability. The objective is not simply to apply a standard formula, but to understand what makes the particular practice work and how those characteristics may translate to a new owner.
Transferability must be evaluated on a practice-by-practice basis. What works exceptionally well for one podiatrist may require a very different buyer for another.
Chiropractic Practice Valuation
A chiropractic practice is often closely connected to the individual practitioner, including the doctor's clinical philosophy, treatment approach, patient relationships, referral sources, and overall practice model.
As a result, two chiropractic practices with similar financial performance can have very different characteristics when it comes to a potential transition.
EG Transitions considers the unique characteristics of each chiropractic practice and the factors that may affect its ability to transition successfully to another chiropractor. Clinical philosophy and treatment approach can be particularly important. A practice built around a specific technique or approach may not be an appropriate fit for every prospective buyer, even when the underlying business is financially successful.
Transferability must be evaluated rather than assumed. Our chiropractic practice valuation process is designed to help understand the individual practice, its unique characteristics, and how those characteristics may affect its potential transition to a new owner.
Every chiropractic practice is different. There is no one-size-fits-all approach to determining its value or transferability.
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