Advice for Medical and Dental Professionals and Their Advisors This article walks readers through what really matters long before these professionals think about listing their practice for sale. Understanding the “why” behind each step, not just the “what”, is crucial. As one reads through, keep in mind that the information is generalized, not specific to a specific specialty area. It is strongly suggested the dental and medical professionals consult with a trusted professional(s) to provide the smoothest path toward the transition or retirement phase. *Preface: Recently, I have had two medical/dental practice valuation referrals, and two physician-clients ask me for…
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In this second part of a two-part series, the authors discuss why and when the highest and best use standard should apply.
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Traditional valuation methodologies have relied upon the analysis of historical accounting and other data as predictive of future performance and value. However, this may not hold true with every economy, industry, or even every enterprise within an industry, over time. For example, the turbulent status of the healthcare industry over the last five decades, since the passage of Medicare in the 1960s, has introduced intervening events and circumstances that have had a dramatic effect on the revenue, expense, and subsequent net economic benefit stream of enterprises operating in the healthcare marketplace. Accordingly, the “road map of historical performance” of healthcare…
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According to Accounting Today, performance for private companies increased for the third straight quarter. Based on a report by Sageworks, sales for private companies grew an average of 8.6 percent in the past year, yielding an increase in net profit margins of nearly 7 percent. Among the industries seeing the highest increases were law firms and medical practices. The report also identified the 10 industries that experienced the highest increases in profitability over the last 12 months. For more information, visit Sageworks at the link below. [button color=”blue” link=”https://www.sageworks.com/pressroom.aspx?article=1496&title=Private-Company-Performance-Grows-for-Third-Straight-Quarter&date=September-29-2014″ target=”_blank” font=”arial” align=”left”]Read More[/button]
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One Medical Practice Could—Depending on How Rules of Thumb are Applied—be Valued at Several Radically Different Prices. Find Out Why! Paul Hyde, in a recent Around the Valuation World™ in 90 Minutes webinar, explained why rules of thumb are dangerous to rely on for valuation. The focus of his argument relied on six simple graphics that illustrated how the value of one hypothetical medical practice could—depending on how a rule of thumb is applied—be assessed at either $800,000 or $200,000 . . . or any number of different variations in between!
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Medical Practice Benchmarking, Financial Performance, and Quality Care Benchmarking physician practices is an important way to assess practice value by comparing a practice’s norms to peer practices in similar specialties or in the same geographic reason. Most physician practices, according to experts, can benefit substantially from benchmarking. Moreover, it’s pretty easy to do! Here David Fein discusses what he’s discovered about the process and its benefits.