The Benefits
If you are unsure about the future of general practice and your role as a business partner as transformational change gathers pace, now is a good time to talk to us. Each practice is unique and so is each exit strategy. Depending on the composition of the turnover of your practice and cost base, some practices may need to work hard in the preceding years to maximise the value of the practice leading to its transfer of assets, whereas other practices that are already profitable due to delivering a range of additional services and high QOF prevalence may consider exiting sooner rather than later to obtain the maximum value for their practice.
We offer each practice regardless of situation or geographical location a ‘free practice healthcheck’ with no strings! We’ll even arrange a QOF audit for the practice, again free with no strings! This means that whatever your situation you will have an upto date valuation of our practice assets and what’s more if you decide, as a practice to offer it to market, you do not have to use our services. We are only too happy to support informed decision making and as the Healthcheck aims to offer you advice on how to plan your exit and obtain the maximum for you assets, should you decide when the time is right to exit. Each Healthcare check takes about an hour and is done at a time convenient to the practice at a time when preferably there is no-one else around. We then send you a full comprehensive report compromising of ‘more than just a valuation figure’ detailing;
- An Indication of the value of the Practice Assets, by partner and the Likely Sale Terms of each offer.
- A comprehensive breakdown of the valuation of the practice and how this has been derived.
- Suggestions as to how to improve profitability and therefore value to the practice.
This offers you an external perspective of your business and a unique profile in how a potential purchaser will view the practice when you decide that the time is right to sell your assets. Whatever you decide to do after receiving your valuation report you will be better informed as to what you want to do and the likely timescale you want to work to. We can and will support you, whatever that decision is.
Asset Valuation Basis
General Practice Valuations or asset transfer valuations are becoming more scientific yet they still require an element of subjectivity due to the number of factors that affect the valuation of a general practice business inclusive but not exclusive to: Turnover, Geographical Position, List Size, Additional Services Offered, Private Work
We value your practice on a multiple of the adjusted net profits of the practice, referred to in the accounting world as EBITDA. Commonly a practice would be valued in terms of a simple percentage of turnover. This method of valuation is unequivocally now incorrect and has led, in the past to a number of practices being sold for a price well below their market value.
When a buyer goes through the process of raising finance, the first thing a bank will ask is what is the EBITDA of the practice before agreeing to any lending proposal. Banks see the EBITDA as an indicator as to how successful that business will be in the future.
The EBITDA is then multiplied by a factor to establish a value for the practice, sometimes a further premium is added if there is specialist equipment, where specific pieces hold a higher value outside of the standard business valuation.
Whilst percentages of turnover valuations in some cases may be higher, this is often short-lived as prospective purchasers consult accountants, banks and business advisors they are often left in a position where their offer has to be reduced or is withdrawn altogether!
Confidentiality
Only purchasers who we have formally registered and taken a precise specification will be sent full details about your practice. Transfer of assets can cause a considerable amount of uncertainty for your practice staff and if mis-handled can cause considerable discomfort for all stakeholders. Therefore all our purchasers must commit to a declaration of confidentiality before being sent advanced details about your practice. Equally, our team are accessible outside practice working hours and weekends so that you don’t have to keep sneaking off to make/take mysterious calls that could cause alarm.