How do you know what a practice is worth?
Someone asked this question today. Here are the details: Practice sees about 45 patients a week in 25 hours and gross collections were about $100,000 last year.
Rule of thumb is that the value is about 70-75% of last year’s collections, since it’s assumed that about 30% of patients will be lost. But the value of the patient base is whatever can be negotiated by the parties. There are lots of variables here, like whether the selling doc is willing to stay on for a transition period. (Sometimes that is good, sometimes not.) It also may depend on how the new doc is presented to patients and staff (don’t neglect the value of staff support here).
