Purchasing Goodwill - Doctors & Medical Professionals

Considering buying into a successful medical practice? Understanding and valuing the goodwill is crucial.

What is Goodwill?

Goodwill is an intangible asset representing a practice's reputation, established client base, and overall success. It allows you to buy into a practice with a secure foundation, unlike starting from scratch.

Benefits of Buying a Practice with Goodwill:

Reduced Risk: Established infrastructure and clientele minimize risks compared to opening a new practice.
Faster Growth: Leverage existing patient base to grow your practice quickly.
Shared Ownership: Buy shares in a practice or purchase it outright.

Why Value Goodwill?

Goodwill valuation is essential for:

Securing Finance: Banks consider goodwill when assessing loan applications.
Buying or Selling: Fairly price a practice based on its intangible assets.

How to Calculate Goodwill:

Goodwill is complex to value. Here are some factors considered:

Patient Numbers & Activity: A strong, loyal patient base increases value.
Financial Performance: Revenue, expenses, and profit all play a role.
EBITDA: Earnings before interest, taxes, depreciation, and amortization is a key metric.

Buy into a Practice with a Good Foundation

Tips for Buying a Practice with Goodwill

Use an Experienced Accountant: Ensure an accurate valuation specific to medical practices.

Smooth Transition: Retain the existing owner for a period to minimise patient loss.

Non-Compete Clause: Protect yourself if the seller sets up a competing practice nearby.

Research Services Offered: Ensure you're comfortable providing existing services.

Staffing Levels: Assess staffing needs and potential staff turnover.

Understanding goodwill is key to purchasing and running a successful medical practice. By carefully considering these factors, you can make an informed decision and ensure a smooth transition.

We can help you secure the financing you need to purchase a practice.

Contact Medimortgage today for a free consultation and discuss how we can help you achieve your property goals.

Call Xaviera on 0432 353 819 or send us a message today!

Medimortgage - Your Medical Mortgage Broker in Australia.