Being an entrepreneur involves a lot of responsibility, risk, sweat equity, and financial investment. You focus your entire career – and life – on making sure the people you serve and staff you employ are well taken care of.
At some point, an exit is inevitable. Regardless of your exit strategy, understanding your company’s value is an important part of the process.
Your company’s value is at the intersection of client outcomes, business economics, and business operations.
There are many factors impacting valuation. They may be weighted differently over time and across different stakeholders. Some important considerations include:
✔ Revenue
✔ EBITDA
✔ Cash Flow
✔ Diversification of Funders and Funder Types
✔ Negotiated Funder Rates
✔ Regions Served
✔ Employee Retention
✔ Client Retention
✔ Quality Indicators
✔ Your company’s structure, processes, and operations
✔ Marketing Success and Strategies
✔ Utilization
These are just some examples of important metrics prospective new owners will want to know about.
Tracking relevant KPIs will help ensure you’re hitting industry benchmarks – or blowing them away! – to maximize your practice’s value. You’ll find a list of other important KPIs on this website.
What are some other metrics you tend to see as most relevant in the valuation process?
Brandon Herscovitch, Ph.D., LABA, BCBA-D
Partners Behavioral Health can help with your clinical and business standards, compliance, and outcomes. We can help you scale an ethical ABA practice you’re proud about.
