AudiologyOnline Phone: 800-753-2160


Starkey - Edge - October 2024

Valuation of an Existing Audiology Practice

Robert M. Traynor, EdD, MBA

July 16, 2007

Share:

Question

What are the most common ways to establish the "worth" of a practice in order to work with a prospective buyer? I have heard about - price per file, price based on an average of X years of income, etc. Where are the best resources for this sort of information?

Answer

According to Drullinger (2006) there are two method of practice valuation. Book valuation and historical precedent valuation. A book valuation is the adding up of the assets that practice owns, equipment, building, furniture, computers, inventory, files, etc. Each of these items are valued and considered as a component of the value of the practice. This book valuation generally favors the buyer, not the seller.

This type of valuation works very well for ice cream shops, gas stations, and convenience stores, but it not a very good method for Audiology practice. Although it is necessary to value items within the practice, the biggest asset the practice has is goodwill sometimes also called blue sky, defined as an intangible asset, such as brand recognition or employee morale or patient loyalty. This makes the historical precedent valuation much more necessary. This is a professional evaluation of not just the assets of the practice but a number of factors that deal with the growth, length of time in practice as well as all the accounting factors that prove specific values, then a number or multiple is assigned.

A good reference for this issue is Seminars in Hearing, January 2006 that I edited. The chapter by Randy Drullinger outlines the specifics of practice valuation and the steps to a fair evaluation for both parties.

Drullinger, R.A. (2006). Practice Valuation: The Buying and Selling of an Audiology Practice. Seminars in Hearing, 27(1), 57-76.

Robert Traynor, Ed.D., MBA is President and Audiologist of Audiology Associates of Greeley in Greeley, Colorado. Additionally, he teaches in two Au.D. programs, a basic hearing aids course for PCO and the Business course for the University of Florida. He has presented academic audiology and product lectures in over 40 countries including the United States and is a co author of a forthcoming book, Strategic Practice Management due Summer 2007. Dr. Traynor is also a Contributing Editor for Audiology Online.


Robert M. Traynor, EdD, MBA

CEO and a practicing audiologist at Audiology Associates, Inc.

Robert M. Traynor, Ed.D., MBA is the CEO and a practicing audiologist at Audiology Associates, Inc., in Greeley and Johnstown, Colorado with particular emphasis in amplification and operative monitoring, as well as offering all general audiological services to patients of all ages.  Dr. Traynor holds degrees from the University of Northern Colorado (BA, 1972, MA 1973, Ed.D., 1975), conducted Post Doctoral Study at Northwestern University in 1984 and studied business at the University of Phoenix (MBA, 2006).  He taught Audiology at the University of Northern Colorado (1973-1982), University of Arkansas for Medical Sciences (1976-77) and Colorado State University (1982-1993).  Dr. Traynor serves as an Adjunct Professor at the University of Florida, the University of Colorado, and the University of Northern Colorado.  For 17 years he was a consultant to a major hearing instrument manufacturer  holding the title of Senior International Audiology Consultant traveling all over the world providing academic audiological and product  orientation for distributors and staff.  A clinician and practice manager for over 35 years, Dr. Traynor has lectured on most aspects of the field of Audiology in over 40 countries.  Dr. Traynor is the co-author of Strategic Practice Management, an audiology business management textbook, used in most universities to train audiologists in practice management.


Related Courses

Understanding Privilege, for Healthcare Professionals
Presented by Esther Clervaud, EdS
Recorded Webinar
AudiologyOnline

Presenter

Esther Clervaud, EdS
Course: #36096Level: Intermediate1 Hour
  'Instructor and information presented should make work places better for everyone'   Read Reviews
Systems of privilege have created a wide division of inequality. This course will help hearing care professionals identify their privilege and determine how to make a difference in their places of employment.

View this Course for FREE.
Need CEUs? Become a AudiologyOnline member to get unlimited CEUs.

Only $129/yr

Learn More

Creating Leadership in Audiology Through a Mentoring Circle
Presented by Natalie Phillips, AuD
Recorded Webinar
AudiologyOnline

Presenter

Natalie Phillips, AuD
Course: #37632Level: Introductory1 Hour
  'I had no idea the value of a mentor in audiology!'   Read Reviews
There are so many components to quality patient care that it is challenging to “master” them all. What if you could come together with other professionals who possess knowledge or experience that could help you or your practice? There are a number of veteran audiologists as well as rising professionals who have wisdom, qualifications, narratives, and unique journeys to share. The purpose of this talk is to rethink the traditional mentor/mentee vertical relationship and explore collaboration in the form of circle…where all professionals, regardless of age or experience, learn from each other.

View this Course for FREE.
Need CEUs? Become a AudiologyOnline member to get unlimited CEUs.

Only $129/yr

Learn More

Using Patient-Reported Outcome Measures (PROMs) to Improve Patient-Clinician Communication and Enhance Treatment Efficacy
Presented by Carren Stika, PhD
Recorded Webinar
ReSound

Presenter

Carren Stika, PhD
Course: #35841Level: Introductory1 Hour
  'Good refresher'   Read Reviews
Due to the recent increased focus on providing patient-centered healthcare, use of patient-reported outcome measures (PROMs) have become an essential component of assessing whether the services provided improved patients’ health and sense of well-being. This course will discuss the role of PROMs in healthcare and how using these measures in clinical practice can enhance treatment efficacy, improve patient-clinician communication, and assist clinicians in providing better person-centered care.

View this Course for FREE.
Need CEUs? Become a AudiologyOnline member to get unlimited CEUs.

Only $129/yr

Learn More

Learn to Earn the Salary You Deserve: Negotiating Like a Boss
Presented by Natalie Phillips, AuD
Recorded Webinar
AudiologyOnline

Presenter

Natalie Phillips, AuD
Course: #32770Level: Introductory1 Hour
  'The statistics of the salaries and percentage of each male and female that negotiate their salaries'   Read Reviews
The ability to negotiate your income displays immediate knowledge and confidence in your skillset and worth. In this course, we will examine a revenue and pay justification method to put into place as audiology business owners, employers, and employees.

View this Course for FREE.
Need CEUs? Become a AudiologyOnline member to get unlimited CEUs.

Only $129/yr

Learn More

Core Topics for Audiology Assistants
Presented by James W. Hall III, PhD, Kathleen Weissberg, OTD, OTR/L, Amit Gosalia, AuD
Recorded Webinar
AudiologyOnline

Presenters

James W. Hall III, PhDKathleen Weissberg, OTD, OTR/LAmit Gosalia, AuD
Course: #37123Level: Introductory3 Hours
  'I am currently working as a Patient Care Coordinator and studying for my Audiologist Assistant Certification'   Read Reviews
This course includes one hour of content on each of the following topics: 1) ethical concepts and decision-making; 2) universal safety precautions, including the Occupational Safety & Health Administration's (OSHA) bloodborne pathogens standard, and 3) patient confidentiality and the Health Insurance Portability & Accountability Act (HIPAA).

View this Course for FREE.
Need CEUs? Become a AudiologyOnline member to get unlimited CEUs.

Only $129/yr

Learn More

Our site uses cookies to improve your experience. By using our site, you agree to our Privacy Policy.