How we value a clinic
“What is my practice worth?” is the simplest question a founder asks, and the one most often answered badly. Not because valuation is mysterious, but because a single method, taken alone, will always mislead. Here is how we approach it, and how a practitioner can read their own number.
Start by restating the real economics
Before any method, the accounts have to be made honest. In an owner-run clinic, the reported profit rarely reflects the true earning power of the business. The founder’s remuneration may be above or below a market rate. Personal expenses may sit in the profit and loss account. One-off items distort a normal year. Restating, what we call normalisation, rebuilds the recurring, transferable profit a buyer would actually inherit. Every valuation that follows rests on this number, so it is where the real work is.
Three methods, three viewpoints
We never rely on one lens. Each method answers a different question, and the truth sits where they converge.
Discounted cash flow (DCF)
What is the business worth given the cash it will generate in the future? DCF is the most rigorous and the most sensitive to assumptions. A small change in growth or discount rate moves the answer materially. Its value is not a single figure but a disciplined range, and the honesty of its assumptions.
Market comparables
What are similar practices actually changing hands for? Comparables anchor the valuation in reality, in the multiples of earnings the market is genuinely paying. The difficulty in a market like Morocco’s is data: real transaction multiples are scarce and rarely public, which is precisely where experience of real deals matters more than any database.
Adjusted net assets
What would it cost to rebuild this clinic from scratch: the equipment, the fit-out, the integrated lab, at today’s value? This method sets a floor. A practice should rarely be worth less than the depreciated, revalued cost of its assets, and for an equipment-heavy clinic that floor can be high.
Where the methods disagree, and what that tells you
The interesting moment is when the three results diverge. A DCF far above net assets says the value lives in future earnings and goodwill, and therefore in continuity and transferability. Net assets far above a DCF says the business is under-earning its asset base, a signal to fix operations before selling, not to sell cheap. The gap is not noise. It is a diagnosis.
From a number to a negotiating position
A valuation is not an opinion to be asserted. It is a case to be defended. When a buyer challenges an assumption, and they will, the answer cannot be “that’s our figure.” It has to be the logic behind it: the normalised earnings, the chosen multiple, the comparable that supports it. A valuation built this way does more than set a price. It changes the balance of the conversation, because the party with the documented, multi-method number sets the terms of the debate.
That is the whole point of the exercise. Not to produce a figure a founder hopes is right, but to arm them with one they can hold, calmly and with evidence, when the first serious offer lands on the table.
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