Adding Value to Your Practice, Part 1 Ongoing strategies for today that will reap rewards tomorrow feature C Dr. John Whitney graduated from CMCC in 1957 and practiced in Guelph for 30 years. He has also been a practice management con-sultant and practice appraisal spe-cialist for over 20 years. Dr. Whitney has trained over 5000 new gradu-ates to successfully enter practice in Canada and the USA. hiropractic practices generally sell for less than the fair market value of a compara-ble small business, all else being equal. This is largely due to supply and demand. Because of generally low demand, chiropractic practices sell at a discount (25 to 33 per cent) compared to equivalent small businesses – an astonishing but true fact. To estimate the value of a chiropractic practice, you can use a number of valuation methods and multiples. However, coming up with an exact amount is unrealistic. It is more reasonable to produce a “value range,” which also allows room for negotiations. You can work out a number of estimates. Each estimate may differ, depending on how closely a specific practice compares to its peers, and the result can be a significant range of values. This method can be time consuming. On the other hand, using all methods could produce an average of all the practice value estimates and this average can offer a pretty close idea of what your practice is worth. The next obvious question is: are there legitimate ways to increase the value of a chiropractic practice so that buyers would be willing to pay at least fair market value; i.e., 25 to 30 per cent more than the historical averages. A good place to start would be improving your Internet (local) presence. But there are other bigger fish to fry to increase the value of a practice. John Whitney, DC When we valuate a practice, we put a premium on first-class, continually and w e l l -t r a i n e d s t a ff Stop for a moment and think: what would it take for you personally to pay a premium for a practice, if you were in the buyer’s shoes? I’ll bet you could come up with a lot of things that would increase the value of any practice. High patient volume and high col-lections are obvious. What are the less obvious features that you would be willing to pay www.canadianchiropractor.ca 36 • CANADIAN CHIROPRACTOR | APRIL 2011
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