Free Tool — Practice Valuation
What is your medical practice actually worth?
Whether you're planning a future sale, negotiating a partner buy-in, or just want to know where you stand — practice value is a number you should know. Most physicians don't. Run both valuation methods against your numbers in two minutes.
What a practice is worth, answered
The questions owners ask before they trust a valuation range — and the factors that move the number most.
How is a medical or dental practice valued?
Most practice valuations lean on an earnings multiple — applied to EBITDA for larger practices, or to seller's discretionary earnings for owner-operated ones — cross-checked against an income approach and recent comparable transactions in the same specialty. The earnings figure matters more than the multiple: normalizing owner compensation, one-time expenses, and personal costs run through the business is what produces a defensible number, and it is where most informal estimates go wrong.
What multiple do healthcare practices sell for?
Ranges vary widely by specialty, size, and buyer type, and any single number quoted without those qualifiers is close to meaningless. Larger practices with professional management and diversified provider capacity generally command higher multiples than small owner-dependent ones, and practices with strong private-pay or favorable payer mix generally price above those concentrated in low-reimbursement contracts. The spread within a single specialty is often wider than the spread between specialties.
What lowers a practice's value the most?
Owner dependency, more than any other single factor. A practice where revenue depends on the owner personally is buying the buyer a job rather than a business, and it prices accordingly. After that: concentration in a single payer or referral source, undocumented processes, staff turnover, and books that cannot substantiate the earnings being claimed.
Do clean books actually change the sale price?
Yes, through diligence. Add-backs an owner cannot substantiate typically get removed from the earnings figure the buyer underwrites, and each dollar removed is multiplied. Books that require reconstruction during diligence also extend the timeline and give a buyer room to re-trade the price. The accounting work that supports a valuation is the same work that runs the practice better whether or not it ever sells.
When should an owner get a valuation?
Well before a sale is contemplated — commonly two to three years out. A valuation obtained when an offer is already on the table can only tell an owner whether the offer is fair. One obtained years earlier identifies which specific factors are suppressing the number while there is still time to change them.