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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:
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Reduced Risk: Established infrastructure and clientele minimize risks compared to opening a new practice.
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Faster Growth: Leverage existing patient base to grow your practice quickly.
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Shared Ownership: Buy shares in a practice or purchase it outright.
Why Value Goodwill?
Goodwill valuation is essential for:
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Securing Finance: Banks consider goodwill when assessing loan applications.
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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:
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Patient Numbers & Activity: A strong, loyal patient base increases value.
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Financial Performance: Revenue, expenses, and profit all play a role.
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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
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Use an Experienced Accountant: Ensure an accurate valuation specific to medical practices.
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Smooth Transition: Retain the existing owner for a period to minimise patient loss.
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Non-Compete Clause: Protect yourself if the seller sets up a competing practice nearby.
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Research Services Offered: Ensure you're comfortable providing existing services.
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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.
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