Although every group should make every effort to control overhead a comfortable environment for patients, staff and the Physicians will increase productivity and efficiency in the office. In many cases a full Practice Management Review by MD Management to evaluate the efficiency would be a worthwhile investment. I have been offered to buy a well-established medical practice but don't really know what I'm buying. This is a very difficult question to answer, as each situation in Canada is different. The cost of the hard assets of the seller and goodwill.
Hard assets are the book value of the assets of the business such as furniture and equipment.
Goodwill is the price someone is willing to pay to walk into an established practice with a well-established patient base. Basically, goodwill is the patient charts as this is what will generate your revenue in the future. The best advice in the purchase of a practice is starting at a price of zero and working your way up to a reasonable price taking into account the value of the hard assets and negotiating a fair price for goodwill. You should always look at least two years of financial statements to ensure continuity of income and expense. When it comes right down to buying a practice, it is all in the art of negotiating a fair and reasonable price that the purchaser is comfortable with.