Selling or buying a practice

That is the lender's decision. Lenders set their own valuation requirements, may have panels of valuers they instruct directly, and may ask for a report addressed to them on their own terms. An HPNA valuation is prepared for its stated purpose and addressed to the party that engaged it. Where finance is part of the transaction, the lender's requirements are worth confirming early, so the scope of the valuation can be set with them in mind.

Sometimes, but only if the report was scoped that way from the beginning. The ATO guide says a valuation should be specific to the tax or superannuation provision it is being applied to, and that difficulties are likely to arise where a valuer seeks to rely on a previous valuation compiled for a different purpose. A valuation prepared for a sale process and a valuation prepared to support a restructure may use different valuation dates, a different basis of value and a different subject, for example the business assets rather than the shares. Telling the valuer every intended purpose at the outset lets the scope cover them.

For most disposals the CGT event happens when the disposal contract is entered into, or if there is no contract, when you stop being the asset's owner. The ATO gives the example of a taxpayer who contracted in June 2025 and settled in October 2025, and made the capital gain in the earlier income year. So the value is usually assessed at the contract date, on what was known or reasonably foreseeable then. A principal who had already given notice before that date is part of the picture; one who resigned unexpectedly afterwards generally is not, because the ATO lists reliance on post valuation date information among its common valuation issues.

You can sell the tangible assets on their own, but what you are then selling is equipment, fit-out and stock, and the price reflects those things rather than a business. Goodwill is what a buyer pays for the expectation that patients, referrers and practitioners keep coming after you leave. If you intend to keep treating the same patients nearby, or to take the practice name with you, there may be little transferable goodwill to sell in the first place, which is a different problem from choosing not to sell it. Where an owner wants to stay clinically involved, the usual structures are a sale of the goodwill with a restraint and a service agreement under which you keep working in the practice, or a sale of part of the equity. Both leave the goodwill with the business and pay you for it. A valuation should say plainly how much of the goodwill is transferable and how much is personal to you.

Yes, if the document fixes the price or the formula that produces it. A heads of agreement is usually expressed as non-binding on the commercial terms, but it sets the anchor: once a number is on paper, any later movement reads as a concession, and the exclusivity clause commonly stops you testing the market while due diligence runs. The clauses that do bind, typically exclusivity, confidentiality and cost sharing, are also the hardest to unwind. So get the valuation before you sign, or make the price expressly subject to one. If a document is already in front of you, an indicative valuation gives you a defensible position on price while a full engagement runs; the fee schedule sets out both. What is worth avoiding is signing a price you have not tested and then commissioning a valuation to justify it, because the valuer's job is to reach a conclusion, not to ratify one.

Because value depends on who is buying. A valuation concludes market value, which the Australian Taxation Office's market valuation guidance describes as the amount an asset should exchange for between a willing buyer and a willing seller in an arm's length transaction, and which the same guidance says excludes a price inflated or deflated by special terms or circumstances. A real buyer prices what the practice is worth to them. A group that can absorb your administration, buy consumables on its own terms and fill an empty room from an existing waiting list sees earnings your accounts have never shown. A neighbouring practitioner buying a patient list sees something narrower. A first-time buyer needing finance is limited by what a lender will advance against goodwill. Those differences are real rather than negotiating positions. The valuation gives you the benchmark, and the spread of offers around it tells you which buyers are pricing synergies you do not have to give away.

Often it is not. Healthcare sale contracts commonly hold part of the price back, through a retention against warranty claims, an earn-out tied to future earnings, vendor finance, or a payment conditional on you staying through a transition period. Each turns a headline price into money you may or may not receive, and each carries a different risk. A retention depends on your warranties holding. An earn-out depends on a business you no longer control and on how the buyer runs it. Vendor finance depends on the buyer's solvency. Stock and working capital adjustments then move the figure again at settlement. There is a tax dimension too: the Australian Taxation Office's tax governance guidance for privately owned groups expects the parties to estimate the value of an earn-out right and to retain documentation supporting that estimate. Compare offers on what you are likely to receive and when, not on the headline number.

Due diligence tests whether the facts the valuation assumed are true, and adds the legal and compliance questions a valuation does not reach. A valuation analyses the earnings, normalises them and forms a view on transferability and risk. A buyer verifies: bank statements against the profit and loss, billing reports against funder data, practitioner agreements and the restraints in them, the lease and any option, employee entitlements and award classifications, equipment ownership and finance, insurance and claims history, and regulatory standing. In healthcare they also test what is specific to the sector, including whether approvals and registrations survive the structure of the deal and whether contractor arrangements create payroll tax exposure. Findings rarely replace the valuation. They adjust the price, add warranties or reshape the deal. Assembling the same material before you go to market is the cheapest protection available for the price you eventually agree.

No. A corporate offer is evidence, but it usually carries conditions: continued employment of the vendor for a period, restraints, an earn-out tied to future performance, separate stock and working capital adjustments, and a price reflecting the group's synergies and cost of capital. An independent valuation tells you what the practice is worth on its own footing and lets you compare offers on like terms. It is also the reference point where a partner, a former spouse or a tax matter needs a value that does not depend on one particular buyer.

No. It gives an opinion of market value: the price a hypothetical willing buyer and seller, properly informed and not under pressure, would agree at the valuation date. An actual sale depends on who is buying, what they can do with the business, the deal terms, the timing and the market at the time. A purchaser with synergies may pay above market value; a rushed sale may realise less. The valuation is the reference point against which offers, appraisals and negotiating positions can be tested, not a prediction of the outcome.

No. An appraisal is an estimate of the price a business might be listed at or attract, usually prepared by a party that is paid if the sale proceeds. A valuation is an independent opinion of market value at a stated date, with the earnings analysis, method and assumptions set out so that the other side, an accountant or a lawyer can test it. Both have a place: an appraisal indicates what the market may be asked to pay, a valuation shows what the evidence supports and why. See Business Valuation Versus Business Appraisal.

Yes. A group offer is assessed as a package: the cash price, any shares or units in the group offered as part of the consideration, the earn-out and retention terms, the transition period and how it is paid, the restraint and the warranties. HPNA values the business independently and then compares the offer with that value, including the risks that an earn-out or scrip component shifts back to you. What the report cannot do is tell you whether to accept; that is a commercial and legal decision for you with your advisers.

No. A review gives an indicative value based on maintainable earnings and the risks a buyer would price, and shows how that value responds to the decisions you are weighing. What a practice sells for depends on the buyers in the market at the time, the terms of the deal and the evidence the business can produce, none of which a review controls. What it does show is which actions would make the business more valuable to a buyer, and what proof a buyer will ask for. See sale and exit valuations for the formal service when a sale is in train.

Because independence is assessed by looking at whether the person giving the opinion has an interest in the answer. The ATO says that when you engage a valuer you need to demonstrate that you have stated that any fee is not dependent on the report's outcome. An agency appointment works the other way by design: the agent is engaged to sell, and is paid when a sale settles. That is not a criticism of brokers, it is the nature of the appointment. It does mean the appraisal is generally not the document to hand to a tax authority, a court, a co-owner or their lawyer. HPNA is engaged the other way round: the fee is published, fixed by the annual revenue of the business being valued, agreed in writing before the work starts, not contingent on the conclusion, and no commission is received from any party.

Many owners do, and the reason is preparation rather than distrust. A valuation identifies what is driving and limiting value, which is information you can act on before a sale process begins: practitioner dependence, contractor arrangements, lease term, concentration of patients, participants or referrers, and the quality of the financial records a purchaser will examine. It also gives you a considered reference point when appraisals arrive. The decision about timing depends on your circumstances and is worth discussing with your accountant.

Usually not the whole of it. Offers are typically expressed as enterprise value, being the value of the operations before funding, so interest-bearing debt and equipment finance are deducted and surplus cash added to arrive at the equity value paid for the business. A working capital adjustment commonly applies where the debtors, stock and creditors handed over differ from the normal level for that practice. Part of the consideration may also be retained, deferred or made conditional through an earnout or a restraint. Tax outcomes depend on the structure and should be confirmed with your accountant.

No. An appraisal is usually an opinion of the price a business might achieve if marketed, often prepared by a party with an interest in the transaction proceeding. An independent valuation states a value as at a defined valuation date, for a defined purpose, on a stated methodology, with the earnings basis, adjustments and assumptions set out so they can be tested. Owners often obtain one before going to market so that price expectations, the earnings base and the known risks are understood before a buyer raises them rather than after.

No. HPNA is a valuation practice only. We do not list businesses for sale, introduce buyers to sellers, negotiate terms or take a commission, referral payment or success fee from a transaction. That separation is the point of the model: an adviser paid on completion has an interest in a deal proceeding, and a valuer cannot. We can value a business that is being prepared for sale. See sale and exit valuations and preparing a healthcare business for sale.

Commonly two to three years, because the items that matter most take that long to become visible in the accounts. A buyer and their accountant will usually examine three financial years, so an adjustment made in the final months reads as a recent change rather than a settled pattern. Restructuring how practitioners are engaged, renegotiating a lease, replacing an owner's clinical sessions and resolving a compliance matter all take time and all move reported earnings while they are happening. Shorter timeframes are workable, but more of the negotiation then happens on the buyer's terms.

Not reliably, and it can do the opposite. A buyer assesses maintainable earnings, being the profit the business can be expected to sustain under ordinary ownership on arm's length terms, so cost reductions that are not sustainable are added back. Deferring equipment replacement, reducing marketing, thinning administrative support or delaying a practice management system upgrade tends to be identified in due diligence and treated as a cost the buyer will have to bear. Reductions that reflect a genuine and durable change in how the practice operates are a different matter and are usually documented as such.

An unresolved question almost always costs more at the negotiating table than it does resolved. Payroll tax is a state and territory tax, and the relevant contract provisions can bring payments to practitioner contractors within the definition of taxable wages. A buyer facing an unquantified exposure will typically seek an indemnity, a price adjustment or a retention, and will size it conservatively because the risk is theirs to carry. The treatment differs between jurisdictions and depends on the actual terms of each practitioner agreement, so the position should be confirmed with your accountant or lawyer.

The material a buyer's accountant and lawyer will request in the first fortnight: three to five years of financial statements and tax returns, current management accounts, a billings report by practitioner and by funding source, the lease and any options, signed practitioner and employment agreements, equipment and finance schedules, registrations and approvals, insurance, and any correspondence with a regulator. Assembling it early does two things. It shortens due diligence, and it surfaces the gaps while there is still time to fix them rather than disclose them.

The incoming owner must apply. Under section 90 of the National Health Act 1953 a pharmacist who intends to become the new owner of an existing approved pharmacy must apply for approval to supply PBS medicines, and must provide evidence that the requirements of the relevant state or territory regulatory authority have been met. At the time of writing the Department of Health, Disability and Ageing states it may take up to 30 business days to process a change of ownership application that does not involve relocation. A pharmacy valuation treats the approval, the location and state ownership rules as central to value. See Pharmacy Valuations.

No. The OAIC states that, regardless of turnover, the Privacy Act covers any business that is a health service provider. A practice therefore cannot rely on the exemption that a general small business with an annual turnover of three million dollars or less may rely on, and the Australian Privacy Principles apply throughout a sale process. That is one reason patient information is handled in aggregate during due diligence, and why data room arrangements and privacy clauses in the confidentiality agreement matter.

It depends on the structure and on what is agreed. The Fair Work Ombudsman states that on a transfer of business a new employer has to recognise an employee's service with the old employer when working out most entitlements, including sick and carer's leave, requests for flexible working arrangements and parental leave. It also states that some entitlements might not have to be recognised, including redundancy, annual leave, long service leave, unfair dismissal and notice of termination. Whether they are turns on the circumstances, including whether the two employers are associated entities. In a share sale the employing entity does not change, so the question does not arise in the same way.

Generally not. Services Australia states that a Medicare provider number requires registration with Ahpra or an approved body, that you cannot use another health professional's provider number, and that a practitioner needs more than one provider number where they deliver health services in different locations, so a buyer needs its own registered practitioners holding numbers for the site. Sector approvals follow their own processes: the Department of Health, Disability and Ageing states that a pharmacist becoming the new owner of an approved pharmacy must apply for approval to supply Pharmaceutical Benefits Scheme medicines under section 90 of the National Health Act 1953, and the NDIS Quality and Safeguards Commission states that an NDIS registration is linked to a single Australian Business Number and is not transferable to a different one.

Value typically increases, because your continued presence converts personal goodwill into transferable goodwill. A defined introduction period, a reduced clinical load and a restraint agreement give the buyer time to establish relationships with your patients and reduce the risk that visits fall away when you leave. The valuation models this transition explicitly: the earnings capitalised are those expected to remain after the handover, and the wage for the hours you continue to work is treated as a cost of the business. Vague or open-ended arrangements generally add less value than clear, documented ones.

That is a decision for you with your accountant and lawyer, not one a valuation makes. What the valuation does is state the value under each route: enterprise value for an asset sale and equity value for a share sale, with the adjustments for debt, surplus cash, working capital and entitlements shown. Purchasers often prefer assets because historical liabilities stay behind; vendors sometimes prefer shares because registrations held by the entity stay in place and the tax outcome can differ. The numbers in the report let those trade-offs be compared on the same basis.

It does not change the value of the business; it changes how much of the price is certain. An earn-out is a deferred payment that depends on future performance, so the vendor carries the risk that the target is missed for reasons inside or outside their control after handover. The valuation gives the parties a defined baseline of maintainable earnings at the valuation date and identifies how the earn-out measure should be normalised for changes the purchaser makes, so the target can be tested later. The tax treatment of earn-out rights is a matter for your accountant.

There is no standard period, and HPNA does not set one. What a purchaser asks for depends on how much of the earnings sit with you personally, how patients and referrers were introduced to the practice, and how quickly the purchaser's own practitioners can obtain provider numbers and settle in. The valuation analyses transition dependence explicitly, because a business that needs a long, unpaid transition to hold its earnings has less transferable goodwill than one that does not. Whether you are paid at a market rate for the transition is a price term the report identifies.

It changes the assumptions the valuation is built on, which usually changes the conclusion. A valuation that assumes an immediate exit, one that assumes a defined handover, and one that assumes continued clinical work for a stated term are three different questions with three different answers. The report should state which assumption was adopted, because a value calculated on a long transition is not the same as a value on a clean transfer. Whether a purchaser pays for the difference in cash or in deferred consideration is a commercial matter for the parties.

It can be, because the subject and the assumptions differ. A sale of the business looks at what the whole operation would fetch from a buyer at arm's length. A shareholder exit values an interest in the owning entity, which starts from the value of the business, deducts debt and adds surplus assets, then considers what the shareholders agreement says and whether the interest carries control. The underlying earnings analysis is the same; the instructions and the basis of value are not.