How to Determine the Fair Market Value of a Healthcare Practice

The COVID-19 pandemic has been increasing the market demand for healthcare practices. According to research from the Association of American Medical Colleges, there will be a deficit by 2021 of approximately 35,600 primary care physicians and over 37,400 non-primary care physicians. There is currently a trend of platform companies and consolidators who desire to purchase multiple practices. If you are thinking about selling, you may want to consider the use of an FMV platform to get a proper fair market valuation of your business. Here is what you need to know to determine the fair market value of a healthcare practice.

What to Expect from a Valuation

A FMV platform should provide the pricing of the practice today and assess its future worth. This future worth is based on the clinic’s potential of services, past successes, and market trends. A healthcare business valuation can help you decide if it’s the right to sell and evaluate offers from purchasers.

Fair Market Value of a Medical Practice Factors

There are several factors involved in healthcare business valuations. One of the biggest considerations is the ability for a seamless transition. This takes into account how easy the ownership can be changed without causing major disruptions. Other factors include the offerings of the clinic compared to other similar clinics and the business location. Investors will also look at the team, technology, and the referral network when deciding on the healthcare compensation evaluation.

How Healthcare Practice Owners Can Improve Valuation

An FMV calculator can provide you an understanding of the current health of your practice. Being proactive by getting a proper valuation can help you correct aspects that can devalue your business before prospective buyers come to make a deal. Pay attention to government policy changes to find potential service gaps to fill that could raise your valuation substantially. Upgrade your technology, especially when it comes to automation so that the business relies on you less. Invest in a professional valuations advisor that can offer you advice on how to improve the health of your business.

FMV calculators are crucial for improving the odds of success for your healthcare practice long into the future. At Carnahan Group, we can provide an accurate valuation to help you achieve your goals and offer solutions for improvement. Contact us today to learn more about how our services can help you.