Why Would A Seller Use An Investment Perspective To Value His Or Her Practice For An Eventual Sale?

In reality, both the seller and the buyer are investors. The seller is hoping to realize a good return on his or her investment into the practice and will likely invest the proceeds of the sale into some other investment vehicle. The purchaser is counting on the practice allowing for a good salary and a healthy return on the investment, as well.

Therefore, analyzing a practice from an investment perspective should align the interests of both parties, the seller and the buyer, towards a common value.The process to establish this value involves a combination of different valuation techniques to establish a range of values. From this range of values the seller selects a market price that can be justified to the buyer.

The key point to reinforce is that what both the seller and the buyer have in common is that they are investors. The "numbers" have to make sense to both of them and once that has been achieved, a sale price can be established that is satisfactory to both parties.