BreakThru Realty

How Are Medical Practices Valued?

A practice is valued on its earnings and on how much of them survive the change of provider. Who is allowed to buy it narrows the market and shapes the deal.

Reviewed by Tyson E. Sam, Founder and Broker of Record, BreakThru Realty, Florida License 3565210

Find Out What My Business Is Worth · (786) 914-1017

Earnings and the Provider

Practices are priced from earnings after a market salary for the providers. The question every buyer asks is how much of the revenue depends on the selling doctor, and how long the seller will stay to introduce patients to the new provider.

Payer Mix and Collections

Insurance, Medicare and cash-pay patients carry different margins and risks. Buyers want collections reports, accounts receivable ageing and the payer contracts, and they will need to be credentialed with those payers, which takes time.

Who May Buy

Depending on the kind of practice, Florida can require the owner to hold a professional licence (dental practices are one example), which limits buyers to licensed professionals or to structures a healthcare attorney approves. Have counsel confirm the structure before you go to market.

Records, Staff and Lease

Patient records transfer under the rules for custody of medical records, and staff and the lease usually transfer with the practice. A practice with a long lease, a trained team and equipment in good order holds its value through the transition.

Find Out What My Business Is Worth

Tell us the type of business, the city, how long it has operated, annual revenue, owner benefit or seller's discretionary earnings, EBITDA if you track it, monthly rent and lease expiry, number of employees, how involved you are, why you are selling, your timeline and whether you would consider seller financing. A licensed BreakThru business broker prepares a confidential valuation from comparable sales and replies within one business day. Everything you tell us is confidential, the valuation is free, and nothing is listed or announced unless you decide to sell. Prefer to talk now? Call (786) 914-1017.

Questions Owners Ask

How much is my business worth?
Most owner-operated businesses in Florida sell for a multiple of seller's discretionary earnings: net profit plus the owner's salary, benefits and one-time or personal expenses run through the business. Where the multiple falls depends on the industry, the lease, the staff, the trend in the numbers and how much the business depends on you. A confidential valuation gives you the range for your business and the reasons behind it.
Will my employees, customers or landlord find out?
Not from us. The business is marketed without its name or address, buyers sign a non-disclosure agreement and prove their funds before they learn who you are, and showings happen after hours or are presented as something else. The landlord is approached only once there is an accepted offer, because the lease has to be assigned.
How long does it take to sell a business?
Six to nine months from listing to closing is common for a well-prepared small business, faster when the price is right and the records are clean, longer for businesses that need a licensed buyer or a franchisor's approval. The escrow period after an accepted offer is usually sixty to ninety days.

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