General Practice, Solo & Small Firm DivisionMagazine

 
Volume 17, Number 1
January/February 2000

Table 1: Arriving at a Reasonable Multiple

Valuation Factor

Multiplier Points  

Low Range

High Range

Base multiplier

.50

1.0

Positive factors:    

l Core client group of the firm is fairly stable

.15

.25

l Seller is young enough to effect an orderly succession

.20

.30

l Firm is very profitable

.50

.75

Negative factors:    

l Firm is too reliant on seller for rainmaking and leadership

-.15

-.25

l Firm is tied to a bad regional economy

-.15

-.25

l Valuation multip

1.05

1.80

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