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Hi

I am in the process of trying to purchase my first podiatry practice and I need some help please.

I am trying to find some sort of financial formula to work out how much the business is worth and what I should offer for the practice. Or what the seller is asking is a fair price


Any help would be appreciated

Regards
Bruce

Hi Bruce:
Where are you located?
Steve

Hi Steve
I am in the UK but the practice is in Canada

Bruce

See:
Practice valuation

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Bruce,

You have to ask yourself what you are really buying. Figure out how much it would cost you to set up your ideal practice from scratch i.e. fixtures/fittings, brand new equipment costs etc, then compare that to the asking price. At the end of the day, when you buy someone else’s practice, all you are really buying are "patients". Goodwill can be challenging to evaluate. Remember, there are know guarantees either, for what ever reason, some pts may decide to go somewhere else after you have bought the practice. You should also check the businesses profit and loss statements for the last 3-5 yrs - is the business growing? Does it have potential to grow further? If these aspects are unclear, then you should start questioning. Try to find out the real reason why he/she is selling as well – the seller might be desperate to sell, which could wk to your advantage.

Cheers,

Daniel

Hello Bruce

I have no idea of the particular problems of purchasing a practice in Canada. Having burnt my fingers in the U.K. though, I would strongly recommend obtaining professional assistance. An Accountant who works inthe area of small businesses would be a good first stop. Put your cards on the table and ensure that the books for the previous 5 years are gone through with a toothcomb. A genuine seller won't mind. If the seller objects, then steer clear.

All the best

Bill

Bruce,

All to often things can look really good on the surface. As Bill suggested, I cannot emphasize how important it is to have the right professional advice i.e. a good accountant/lawyer. This is probably even more important for you because you are purchasing in another country. It may cost you an arm and a leg in the beginning, but it's well worth it.

Hi

Thank you all for our input/.

Bruce

Bruce
Somewhere on arena I found this formula net profit X 0.5 X 1.25. This seems fair to me for practice you have to include equipment stock etc.

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Zaffie
My location

Hi

Just remember most of your custom will be from Word of Mouth and Patients may not necessarily stay with you. The price of Good Will is a bit of a grey area.
Especially since it is you you're selling not goods. So what ever formulae you use the Goodwill will always be the X factor.

Study the Town / area for its Demographics and determine if itwill provide enough custom. I worked on 1 Pod for every 10000 People to make a good income however that was NZ.

I would plan to have a quiet period of about 1 to 2 years before the old Pods' regulars find you as comfortable to be with, or your could have a period where the Old Pod is willing to Ween them onto you.

Check that all the Equipment supplied is in Calibration and up to government standards (e.g Electrical Earthing compliance, Autoclave Sterilisation standards Etc...) and future proof.

Have you got an answer Why the Pod is Selling up?

It may be easier to start your own Business up when you get there....?


Good Luck


JOE

Bruce
I just moved to Australia after selling my practice (10 years old) in Canada, Grimsby Ontario to be precise. I can give you an idea of what the practice may be worth by sending me some details of where in Canada you are going. I sold it for less than it was worth as the market is not a hot market for selling. The profession is in slight demand in Canada and if the seller is desperate they either take what thry can or a practitioner can wait till that person just closes up and opens up near by and takes over the patinet load. email me for more deatl and I will let you know about Podiatry in Canada etc. I t is different for each Province.

Im assuming you have resolved immigration issues and local licensure requirements before parting with cash?
s

Hi Bruce, is this your first practice or is it first practice outside of UK?

regards Richard

A practice is worth what someone will pay for it.....if there are no takers except you it is not worth much. From an investment perspective it is only worth anything at all if there is some net profit after you have paid yourself a good wage and met all your other costs.....the good wage you can get for working for someone else with out having to "buy yourself" a job....because if that's all you are doing then it is not worth more than the residual value of fixtures and fittings.
good luck....