Methods used to determine the value of an Seller Resources
Submitted by Randy M. Krivo, Licensed Business Broker, CMSBB, MBA
As a practice sales specialist, the most common question I am asked by practice owners is: “What’s my practice worth?” Not too surprising, potential buyers most often ask: “How much should I pay for a practice?” So, how do buyer and sellers determine the value of a practice? There are 3 methods commonly used in determining the answer to these questions:
- % of Gross Receipts
- Combination of Assets and Net Earnings
- Multiple of Net Earnings (SDE)
As a practice sales specialist, the most common question I am asked by practice owners is: “What’s my practice worth?” Not too surprising, potential buyers most often ask: “How much should I pay for a practice?” So, how do buyer and sellers determine the value of a practice? There are 3 methods commonly used in determining the answer to these questions
