Mr. Hutzler notes 17 best practices when performing a DIY assessment:
– Use a consistent valuation method
– Use multiple valuation approaches
– Use multiple objective surveys
– Avoid cherry picking survey data
– Beware of productivity ratios in the survey data
– Beware of anecdotal data
– Beware of strategic value
– Avoid valuations based on “opportunity cost” calculations
– Beware of stacking multiple compensation elements on top of each other
– Beware of double payments
– Beware of circular databases
– In physician practice acquisitions, be sure to consider post-transaction compensation
– Beware of placing value on intangible assets
– Avoid rewarding internal valuators based on deal success or related profits
– Consider valuation frameworks
– Be sure to separately consider and document commercial reasonableness
– Have a consistent policy for when to refresh DIY valuations
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