How much are you guys paying to buy into a practice?

Practice Management

I've heard numbers from 100k to 2 million. How did your practice determine your buy in cost? Seems like there are different ways. From what I've seen there are 3 methods:

  1. Formulary approach 2. Asset approach (assumes no goodwill) and 3. Income approach (using EBITA).

None of these count buying the building. It seems like there are the "collegial" asset buy-ins, where the owner decides he/she would like you work with you long term and is reasonable, and the "you are my retirement nest-egg pay me a lot" buy-ins.

My accounting firm and the owners accounting firm don't agree on how to calculate the value of the practice.

Posted Feb 17, 2024, 10:21 PM UTC

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