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Setting an Asking PriceUsing a Business BrokerSelling a Business During DivorceSelling a Failing BusinessTransferring Intellectual PropertyPreparing an Online Business for SalePreparing for Sale, Two Years OutSelling a Business QuicklyWriting a Selling MemorandumSelling a Business Step by StepSelling a Business With DebtChanges Worth Making Before SellingA medical practice does not price its own work. Payors do, and the mix between them decides revenue more than volume or effort ever will.
SDE is $824K and EBITDA is $544K. The $280K between them is what a replacement physician costs, and a buyer pays on one basis or the other, never both.
Read from the calculator on its shipped example. Lines marked (derived) are the difference between two of its figures rather than one it displays directly.
Every figure above is computed from inputs you control. Change one and the whole model moves.
The gap is the replacement physician. Mixing the two bases is the commonest mispricing in practice sales.
Property debt is where coverage is thin. A blended ratio would have buried it.
These charts are the calculator’s own, drawn from the example it ships with. Put your figures in and they redraw.
Quoting SDE against an EBITDA multiple. They differ by exactly the replacement physician's cost, and here that is $280K of earnings — more than a million of price at four times. Coverage is tested separately for property and business debt, because a blended figure would have hidden that property sits at 1.63× while business debt sits at 10.91×.
Rules of thumb that circulate because they are roughly right. The calculator labels them as such and asks you to record your own source.
The tool applies all of this to your numbers, and tells you where it disagrees with itself.
On earnings, adjusted for what a replacement physician costs. The tool computes SDE and EBITDA separately because they differ by exactly that cost — $280K on the worked example — and a buyer prices on one basis or the other, never both.
Yes, more than volume does. Commercial, Medicare, Medicaid and self-pay pay differently for identical work, so two practices seeing the same patient numbers can differ by a third in collections.
Below ninety percent of production usually means money is being left in a process problem rather than a pricing one. The tool shows production against collections so the gap is visible.
Sometimes, and only where one is active in your specialty and region. The tool prices the practice on ordinary earnings first, because that is the floor if no platform is buying.
The answers above use the worked example. Your practice will give different ones.
A practice purchase is rarely one loan. The price, the building and the imaging are usually three facilities, and the order they are arranged in decides whether the deal clears coverage.
Up to $5M over ten years. The long amortization is what makes coverage work on a practice where the earnings are real but not large.
Bank debt, seller note and equity tested together. The same price is affordable or impossible depending on how the stack is built.
Only if the building comes with it. Cheapest money available, slowest to arrange, and it will not fund working capital.
Imaging and in-office diagnostics, where a vendor lease hides its rate in a money factor. Convert it before comparing.
A note on full standby counts toward part of the injection, and a physician who will not carry paper tells a buyer something.
Every 20% owner files one. On a practice this size the guarantor is most of the credit decision, and liquidity matters more than net worth.
Payor mix and collection rate decide what the practice collects, and neither is quick to change. Register now and have the model ready before the conversation with a buyer, not after.
No credit card required now. As long as your details are in the system, we send the discount access details when the software opens.
And the financing calculators are free and working today. SBA 7(a), 504, CAPLines, Form 413, equipment and seller paper — your account opens all of them the moment you register, months before the valuation software ships.
The whole analysis exports as one PDF, generated server-side — every tab, the five-year history, the normalization and the working behind each figure. Not a screenshot of the tab you happen to be on.
It carries the business name, the period, who prepared it and for whom, so a lender or a buyer can act on it without asking who produced the figures.
One email when the software opens, and nothing else. Your details are not sold or passed on.
Figures are the calculator’s worked example, read from the tool itself. Thresholds described as conventions are not market observations. Saving is optional and off by default; saved work is encrypted at rest with AES-256. This tool produces estimates on figures you enter, not a valuation, appraisal, or legal, tax or accounting advice. ExitAdviser is operated by Simplifying Calculation LLC, a Delaware limited liability company.