Medical, dental, veterinary, legal, accounting. A practice is priced on how much of its value walks out the door when the founder does. The goodwill a buyer pays for is the part that stays.
The schedule is full because patients trust you. The referrals come because the providers down the street trust you. The front desk runs the way it does because you trained it. You built a practice that works because you are in it. That is the career, and the thing to be proud of. It is also, to a buyer, the risk.
A buyer pays for the patients who would stay if you retired tomorrow, not the ones who come because of you. The more the practice depends on the founder, the less it is worth on sale, so the loyalty you earned over a career can quietly work against the number. The practices that command the highest multiples are the ones that learned, deliberately, to run without the name on the door.
A buyer in this market underwrites four things before they will talk about price. Each one is a discount by default, and a point of value once it is evidenced.
How much of the revenue follows you personally, and how much belongs to the practice. A buyer pays for the second and discounts the first.
Associates, partners and the referral relationships. A single-rainmaker practice is priced for the day the rainmaker leaves.
Insurance and payer mix and fee schedules, or the client and account concentration in a services practice. Durability is underwritten line by line.
Credentials, the entity's right to operate, and the compliance file. A buyer prices the risk that any of it does not transfer cleanly.
The same four things, turned from risk into value. This is the preparation a Value Protection Study and the Cordis MRI are built to run.
Associates and systems built so the practice runs without the founding provider, and shown to work before the market sees the practice.
The sources of new patients and clients moved from the founder's name to the practice's.
Durability shown and concentration addressed, the way a buyer's model will test it.
Owner compensation normalized, personal expense removed, each adjustment filed beside its proof.
Her name was on the door and in every referral. The readiness work moved the newest patients onto associates, documented the payer mix, and normalized her compensation to a market number. A buyer could finally see a practice rather than a person, and priced it as one.
More in practiceThe Cordis MRI runs your own financials through the underwriting model of every buyer lane, and returns the range, not a single number. The Value Protection Study turns that read into a sequence. Both happen before anything goes to market.