Quit Setting Your Money On Fire

Own A Practice? 3 Reasons To Order A Healthcare Valuation

by Kathryn Watson

As a doctor who owns a private practice, you are also a business owner by default, which can be tricky when you want to focus on the medicine. Often, physicians find themselves dealing with complex financial scenarios that revolve around the worth of their practice, which is why healthcare valuations are so important. Here are three reasons you may need to order a valuation. 

1. You Want to Issue Stock 

When you have a successful private practice, it's easier to innovate, create new products, or design niche services. To give people a part of your success, you may consider filing an IPO and issuing stock to develop a healthcare company based around your products. 

However, before you issue stock, you will need to learn the value of your business through a professional valuation. Every share of stock signifies a financial stake in real assets and the growth potential of a business, so in order to set the initial strike price, you will need to understand what your company is worth now and what it could be worth down the road. After you have a number, you can decide how much capital you want to raise and divide that number by how many shares you want to issue to determine a target strike price. 

2. Shareholders Are Angry

Sometimes, stock owners may not agree with the current strike price. People may have concerns about the viability of your business, especially after events like pandemics or public issues with someone on the board. If you need to provide information to shareholders, a healthcare valuation is a great method for providing real-life data to support the stock price. 

Findings can be presented at the next board meeting or through a public call, helping people to understand the thought processes behind recent moves. 

3. You're Retiring

Retiring and moving onto the next chapter of your life can be a very fulfilling experience. However, before you retire, you will need to sell your practice to get out all of the equity you put into the business and to pass on your patients to another trusted medical professional. Before you can take that next step, you will need to understand the value of the business, so you know just how much you can charge another doctor for the company. 

During valuations, professionals will analyze the finances of your business, including the number of patients you have, outstanding account balances, and the value of all of the equipment and intellectual property you have to determine a fair market value. 

Anytime you order a healthcare valuation, make sure you are working with a team of professionals who have experience handling the complex nature of business analysis and consulting. Read their ratings online, look for evidence of recent disputes, and make sure you understand the itemized pricing before moving forward. By hiring a great valuation company, you can ensure that you learn about the facts so you can decide how to move forward.