Profit must be present for a practice to have value over and above that of the tangible assets: equipment, inventory, etc. There must be enough money to pay all expenses, satisfy debt, and allow the owner to take home a reasonable salary in a properlyprice practice, and proper pricing is dependent upon proper valuation. Without this profit, the other factors become less meaningful. Subsequent to adequate cash flow, other factors, such as growth, transferability of goodwill, and location, can significantly affect practice value. There are a number of common valuation methodologies to consider. It is important to understand the application of each method, as there is neither a one-size-fits-all approach nor a simplistic "automatic formula" approach to valuation.
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