23 Mar How A Chiropractic Practice Is Valued: Complete Guide
Owning a chiropractic practice requires years of hard work and dedication. From establishing your practice to expanding your services, a chiropractor is likely to feel as if their practice is an extension of themselves. With all the work that goes into owning a chiropractic practice, it can be hard to know when to sell your practice. Even more challenging is knowing how to fairly value your chiropractic practice.
So, how is a chiropractic practice valued? There are several methods that can be used to value a chiropractic practice. The best approach to receiving fair market value for your practice is to work with a transition advisor. A professional in this field will be able to properly assess the value of your practice as well as direct you towards the most profitable method of sale.
Because of the effort that has gone into the building of your chiropractic practice, it is crucial to approach the sale or transition of your practice with a plan. Working with a chiropractic transition advisor is the best way to ensure that the transition of your practice is both smooth and effective.
How Much is a Chiropractic Practice Worth?
The value of your chiropractic practice will depend on several factors. Some of the things that a professional considers in the valuation of your practice include your inventory and assets and the number of active patients accounts your practice has. The past income of your practice also plays a role in its valuation.
A chiropractic transition advisor will first conduct a thorough assessment of your practice including the physical location, the inventory and assets, and the number of patients. From this assessment, they will then provide you with insight on ways to improve your practice. With these improvements, your chiropractic practice will receive a higher value.
This creates an easier and more profitable practice transition or sale for you as the owner. It also ensures that the transition process goes smoothly for both the new owner and your loyal patients.
Three Valuation Methods for Chiropractic Practices
The way your chiropractic practice is valued will typically fall under one of three categories. In this section, we will discuss some of the details of each valuation method.
When the income approach is used in the valuation of your practice, the main value is based on the yearly cash flow of the practice. There are several ways this can be done. However, they all focus on the income, debt, and earnings of your practice.
The second approach that can be used to provide a valuation of a chiropractic practice is the cost approach. When you value a practice using a cost approach, you focus on the assets of the practice, not necessarily the income. The tangible assets are the only thing included in this method of valuation. Because of this, it is not the most accurate and rarely used for the valuation of practices.
Fair Market Approach
The third, and often the most reliable approach to valuation is the fair market approach. In this approach, the value of your practice is based on the sales of similar practices in your area. It also takes other aspects such as your cash flow and assets into the equation. This is the best way to value a chiropractic practice when an eventual sale or transition is the goal.
Things to Consider Before Selling Your Chiropractic Practice
When you begin to assess the value of your chiropractic practice, it is important to create a plan for transition or sale of the practice. Approaching this process with a plan is the best way to ensure that you consider every detail. After all, you put great effort into building this practice. It is important that you receive the financial compensation that you deserve for your hard work.
It is important to work with a transition advisor to make sure that every aspect of your chiropractic practice is in top condition. Streamlining your bookkeeping and scheduling processes will allow for a more simple transition. Renovating the aesthetics of your practice will make it more appealing for potential buyers.
Taking a complete inventory of every aspect of your chiropractic practice before selling will allow you to address the small details that you may not notice on a regular basis. All of these small changes to your chiropractic practice will provide you with a greater valuation for your chiropractic practice.
Reasons to Sell Your Chiropractic Practice
There are many reasons why you may be considering the sale of your chiropractic practice. Maybe you are simply curious about the valuation of your practice for an eventual transition several years down the road.
Owning a chiropractic practice is hard work. Between managing your patients as their chiropractor, and managing the daily operations of a practice, the work can be exhausting! Whatever the reason, knowing the fair market value of your chiropractic practice can help you make a decision that is most beneficial to you.
Working With a Practice Transition Advisor
If you are considering the sale of your practice either now or in the future, it is important to contact a chiropractic practice transition advisor. Working with a transition advisor like the team at Jaquay Enterprise is the best way to receive accurate and fair market value for your chiropractic practice.
By using their expertise in the area of practice transitions, Jaquay Enterprise helps chiropractic practice owners value their practice fairly. Conducting a thorough appraisal and evaluation of each practice allows them to suggest improvements that could boost the value of your practice. This creates a transition experience that is both simple and profitable for you as the practice owner.
If you are interested in learning the value for your chiropractic practice, contact the team at Jaquay Enterprise!
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This article was sponsored by Jaquay Enterprise, a team of practice transition advisors in Tulsa, Oklahoma. They specialize in advising and assisting their clients with dental and medical practice transitions. You can visit their Tulsa practice transition advisor website here to learn more.