Evaluating a Business Value (Full Version)

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perini1975 -> Evaluating a Business Value (January 26, 2012 2:48:06 PM)

From brief experience at business brokerage during my college days, I know that certain industry have certain way they evaluate businesses. For example, Coffee/convenience stores were typically sold dollar for dollar meaning the asking price of these businesses were the same as the average total revenue of that business. How do you evaluate a physical therapy business? what should be the asking price for clinics that have $200,000 of gross revenue annually? any help appreciated. thanks.




perini1975 -> RE: Evaluating a Business Value (January 30, 2012 12:13:02 PM)

anyone please?




orthotherapist -> RE: Evaluating a Business Value (January 31, 2012 11:07:30 AM)

Not the same as evaluating conv. stores. In the store a bag of chips costs the same for every customer. In healthcare reimbursement is different for every patient depending on their insurance. You need to know a lot mor than gross revenue to value a business (healthcare)




HarperPT -> RE: Evaluating a Business Value (January 31, 2012 1:52:17 PM)

A PT clinic is usually evaluated at 1 to 2 times net earnings. Other factors play a role such as location, lease terms, number of therapists. I assume at $200,000 this is a small one therapist clinic?




mhberk -> RE: Evaluating a Business Value (January 31, 2012 9:33:09 PM)

A small one therapist clinic is netting $200K?  Where?




jesspt -> RE: Evaluating a Business Value (February 1, 2012 7:22:04 AM)

quote:

ORIGINAL: mhberk

A small one therapist clinic is netting $200K?  Where?

If you read the original post, it says $200000 gross, not net.




perini1975 -> RE: Evaluating a Business Value (February 2, 2012 4:30:51 PM)

I agree its not the same as evaluating convenience stores since reimbursements are different from different insurance companies but clinic is grossing $200k in revenues and patient mix is 50/50 medicare/private HMOs. It is one PT and one PTA and one secretary clinic so pretty small scale but don't know how to evaluate the place further.




SSPTnFL -> RE: Evaluating a Business Value (February 10, 2012 10:50:59 AM)

General rule of thumb backed up by industry standards and companies doing this as their business. Net Income (Not Net Revenue) for past 12 months - any long term debt x multiplier of 3 to 5. Net Income for clinic ABCD is $100,000, there is $20,000 in outstanding debt for total of $80,000 x 4 multiplier = $320,000. There is no valuation for "blue sky" or what potential might be there.




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