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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.

Doctor purchasing goodwill, Australia

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 Ebony on 0477 618 486  or send us a message today!

Medimortgage - Your Medical Mortgage Broker in Australia.

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