Medical Practice Valuations

How to value a private medical practice FAQ'smedical-practice-valuation

Many of our medical clients contact us regarding placing a valuation on their medical practice or health care related business. We have published these FAQ's to help future clients make up their minds on what path to take when trying to work out the goodwill valuation that may be applicable in this industry.

1) Is it wise to ask my accountant to provide a valuation of my medical practice?

This really depends on the expertise of your accountant. We know of only 2 accountants in the UK who have expertise in this field. My answer to this question would be that your accountancy will be able to apply standard business valuation methods to come to a valuation but this valuation will be inaccurate. There are industry specific methods and medicine falls into one of these categories. To receive a formal and accurate goodwill valuation it is essential that you get this service provide by market experts. At Morgan Cox we can provide this service to you.

2) Can you give me a ball park figure over the phone as to what my practice is worth?

No. We don't do ball park figures as they are never accurate. There is no point cutting corners and looking at the headline accounting figures as this will lead to an inaccurate and misleading valuation. Attention to detail and a full business inspection is required in order to provide a proper and accurate service.

3) I want to buy a medical practice however I think the owner has over valued it!

Many consultants and private practitioners who attempt to sell their businesses don't get a formal valuation and/or use non specialist brokers. It is common place that incorrect valuation figures are placed on the business. This is a common technique used by some generic business brokers who may quote you very cheap fees/commission and then over value the business to gain the instruction. Our advice is that before you part with a substantial amount of money that you have an expert look at the business. If the vendor is not happy with an expert, independent third party valuer then we would advice waling away from the business.

4) What methods are used to value a medical practice?

We use 3 main methods which are standard in this market. It is best when these 3 methods produce similar valuation calculations with little variation. Unfortunately we don't disclose the exact methods used in these FAQ's however we explain fully in our valuation reports how we calculate the goodwill valuation.

5) Can you tell us what recent transactions have gone for in various markets?

There is no central registry for transactions in this industry. Only market leaders such us us have access to recent data in a significant volume to be able to apply market benchmarking within the valuation calculations.

6) What do you include in the valuation?

We include the goodwill of the business which will include tangible and intangible business assets. We do not include commercial property in the goodwill element.

7) How to I go about organising a valuation from Morgan Cox for my private medical practice?

Our valuations are carried out remotely and can be purchased from our on line shop. Once your order has been completed we will send you full details as to the information that we will require. This will include a comprehensive business information document and we will also need to see the full accounts for the last 3 years.

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