98% of all business owners don’t know the value of their business. This lack of knowledge can be devastating for retirement plans – and can result in a hard-working doctor investing tens (or hundreds) of thousands of dollars in aspects of the practice that actually decreases its value.
A thorough chiropractic practice valuation will give you a realistic understanding of your current practice value, and what is driving it. This is key to making the best decisions for your family, your practice, and your patients. The earlier you get a valuation the better, as it gives you more time to use that information to make course corrections + improve your value.
But before you start a practice valuation, it’s crucial to understand how chiropractic practices are valued, because not all valuations are created equally – and a poorly prepared valuation will do more harm than good.
If you’re like most chiropractors you’ve been focused on your patients, while business operations + documentation have been an afterthought. However, most valuations operate on the assumption that the practice data is error-free and ready for analysis. Because the valuator doesn’t even check for discrepancies in the practice data, they miss key issues that need to be resolved before the valuation ever starts.
This lack of pre-valuation analysis puts you at risk of obtaining a practice valuation that might be off by tens (or hundreds) of thousands of dollars! Further, a valuation that was hastily constructed, without thorough preparation, puts you at many levels of additional risk, because you are basing your actions and decisions on inaccurate assumptions.
This is a huge risk that you don’t need to take ,because there is a better option.
PPS has the specialized expertise and proprietary data reconciliation protocols to ensure highly accurate independent chiropractic-specific practice valuations
At PPS we utilize a revolutionary process to deliver the most cost effective, accurate, and detailed chiropractic valuation reports in this industry. Our approach starts with a thorough analysis of the practice data to ensure it is valuation-ready. Our experience consulting on thousands of chiropractic practice sales gives us key insights into inconsistencies in the practice data that could skew the valuation results. Once these are corrected, we can complete our valuation of the practice, providing you with a highly accurate valuation that truly empowers you to make the best decisions.
Invest in Your Future with PPS Valuation Services
Certified Appraisal
A Certified Appraisal is the gold standard for establishing a practice value for a divorce, partnership dissolution, estate planning, or other legal needs. This service includes PPS’s most thorough data preparation to ensure that the appraisal is built on an accurate foundation, finalized with a detailed, 65+ page report prepared by a National Association of Certified Valuators and Analysts (NACVA)-certified appraiser. Because these services are built to meet the precise needs of your legal proceedings the services required can vary, but most certified appraisals can be provided within 8 weeks for $5999. The Certified Appraisal also includes a 60-minute consultation to review the final report.
Cost :: $5999 (additional fees will apply if additional services are required by your legal team, such as expert testimony)
Timeframe :: 4-8 weeks once all required information is received
The timelines provided are estimates; actual time for services will depend on the number of clients receiving similar services and the complexity of your practice data.
Clinic Valuation
(Most Popular Option)
PPS’s comprehensive Clinic Valuation is the most thorough + cost-effective way to understand your practice value. Doctors receive a precise opinion of value that is based on a thorough pre-valuation analysis to ensure the most accurate results. Upon completion of the Clinic Valuation, you receive a 6-7 page report that documents the practice value and a detailed accounting of the clinic’s sale strengths and challenges. The Clinic Valuation also includes a 30-minute consultation to review the final report.
Cost :: $2999
Timeframe :: 3-5 weeks once all required information is received
Clinic Review
For smaller and straightforward chiropractic clinics that only require a range of value, the PPS Clinic Review may be a cost-effective option. This abbreviated valuation is based on a smaller data package, resulting in a less expensive + faster service. The opinion of value from the Clinic Review will only be an estimate, and it is possible that key value points or data may be missed due to the abbreviated nature of the service. This service is generally utilized as a first step for a doctor considering a practice sale- but can also be supportive for doctors with simple clinic operations + financials.
Clinics under $400,000 gross
Cost :: $499
Clinics $400,000+ gross
Cost :: $799
Timeframe :: 2 weeks once all required information is received
The timelines provided are estimates; actual time for services will depend on the number of clients receiving similar services and the complexity of your practice data.
{PPS valuation services} were an eye opening process for us and it really helped us through what/where we needed to look at this acquisition. We learned so much from you and from our questions. Your insight on the valuation and all the parts of the business that you explained to us without asking and more is invaluable. I believe this will save more than what we paid for the valuation. The prospectus gave us more detail oriented statistics and metrics which we can definitely use to run the business and understand all the financial parts on the way."
- Dr. Sahin U., PPS Valuation Client
Why Use PPS Valuation Services?
Built for Chiropractic Clinics
PPS has significant + current experience valuing chiropractic clinics, which is critical for getting an accurate valuation. One of the most catastrophic mistakes a DC can make is obtaining a valuation from a generalist. Chiropractic clinics are very unique businesses + it requires specific training and experience to properly value the practice’s intangible benefits. Using a valuator who doesn’t participate in chiropractic sales on a monthly basis is very risky because they base valuations on generic resources like reference books + sale databases. This results in valuations that are not tied to current sale + lending conditions, and that don’t factor in the unique aspects of the practice like technique + clinic model.
Invaluable Insights
A PPS chiropractic valuation report is so much more than just a number – it serves as a roadmap for helping you to make strategic decisions for your practice and your future. Our practice valuations provide comprehensive business intelligence for the doctor by documenting the clinic’s relative strengths and challenges. This helps you make the best decisions to strategically increase both value and salability as you move towards a future sale. Want to take the analysis + insights to the next level? PPS also offers Future Planning + Exit Strategy services for even more in-depth information on optimizing your practice for a future sale.
Thorough Analysis for Highest Accuracy
A PPS practice valuation is a complex financial analysis, performed by an experienced team of professionals who demonstrate an exceptional level of attention to detail. Beware the broker or valuation company that simply takes your financial data and runs it through a series of formulas - maybe even while you are on the phone with them! This valuation will be surface-level at best, has a high likelihood of missing key data inconsistencies that could skew your valuation, and will not take the entire scope of the practice into consideration. The result is a valuation that will likely be based on incomplete data, which could impact the valuation by tens (or hundreds!) of thousands of dollars- potentially leaving significant money on the table.
Get the Most Value
PPS Chiropractic Practice Valuation services are the most comprehensive that we’ve seen. Our Valuation includes an in-depth, 500-point data analysis to ensure the practice is ready to be valued, and a report that provides an opinion of value AND details on the practice’s strengths + challenges in a future sale. Despite all this additional value, PPS’s keeps our valuation services very affordable, providing the highest return on your valuation investment.
Don’t Risk Costly Valuation Mistakes
Get the insights you need to make the best decisions for your future
FAQs
How are chiropractic practices valued? At PPS we have designed our valuation methodology to mimic the valuation that the lender will complete prior to approving your buyer’s loan. First, we do a thorough analysis of the practice operations, financials and clinic stats to ensure that the data on the clinic is valuation ready. This is crucial to ensure that the valuation results are based on a complete picture of the practice operations – any inaccuracies can skew the valuation and result in costly sale obstacles with a buyer or lender. Then we determine the transferable profit of the clinic (the technical term for this is Seller's Discretionary Earnings, or SDE) for the last three years. The SDE is the basis of your practice’s value. Determining SDE requires an in-depth review of your financial statements and the tax strategy that has been used to minimize your taxable income. Then we look at trends in collections, clinic assets, billed services and patient visits to determine the proper weighted average to utilize based on current lending standards. Next, we determine the multiple to apply to the SDE. The multiple is a statement of the risk the buyer will assume in buying the practice. The more transferable the income is, the lower the risk – which translates to a higher multiple, within the lender’s current range. Because the Small Business Administration (SBA) backs the majority of chiropractic practice acquisition loans, they tend to set a standard multiple range. So at PPS we constantly review + analyze current market conditions and evaluate the sold prices for similarly sized clinics to give us a range of multiples of SDE to work within. Finally, we use a series of 25+ intangible factors to determine where the clinic would fall within the applicable range. The PPS valuation is for the assets and goodwill of the business only - it does not include real estate or accounts receivable.
How are chiropractic practices appraised? A practice appraisal is different from a valuation. Appraisals are a more extensive and in-depth analysis of a practice and are primarily used for legal situations, such as a divorce or bankruptcy. Appraisals are much more expensive than valuations, with prices starting around $5,000 and going up to $15,000 or more. Appraisals can also look at the practice value differently. This is because an appraisal is typically not a precursor to an actual sale, and therefore the likelihood of obtaining funding for the appraised value is not a concern. This means that other valuation formulas, like those heavily based on gross collections or equipment value, are often more heavily considered in an appraisal.
Who can provide a professional valuation of my chiropractic practice? There are no licensure requirements for conducting business valuations, so there are many vendors offering practice valuations at various price points. Sadly, many doctors will invest thousands in these valuations, only to get an opinion off value that cannot be substantiated by the actual market conditions – rendering it useless. This can even be true for valuations conducted by trusted CPAs – while they may have extensive knowledge about valuations for other businesses, not all of that will transfer to valuing a chiropractic practice. And if they don’t actively participate in chiropractic practice sales then their valuation methods and formulas may be outdated and out of touch with current lending conditions, resulting in a valuation that can actively work against your goals.
Is there a “rule of thumb” that works for chiropractic practices? Chiropractic practices are complex businesses, and many factors can push a clinic’s value above or below a general rule of thumb. This makes using a rule of thumb very dangerous, as it can either leave value on the table, or price a clinic outside of what is marketable. At PPS we find that around 30% of practices are straightforward enough to fall into a standard pricing model – and about 70% require a more nuanced approach to fully capture the clinic’s full value.
How can I use my valuation to plan for a future sale? A high-quality valuation will advise you on both the practice value, as well as the strengths and challenges that led to the valuation. A valuation that doesn’t take those factors into account isn’t really a very precise opinion of value for your unique practice. At PPS clinic strengths and challenges play a prominent role in our valuation reports, so that you can use that data to best strategize + plan for a future sale. We also offer a more in-depth Future Planning + Exit Strategy valuation, which goes several layers deeper in offering likelihood probabilities and action steps to prepare for various exit scenarios.