How will a “professional practice” business be valued during divorce proceedings?
Many professionals, such as doctors, lawyers, accountants, real estate brokers, chiropractors, etc. own and operate their own professional practice. These professional practices require an experienced Business Valuator and, are often valued differently than many other business types. Absent any real estate holdings, a professional practice business typically does not have significant hard assets. Therefore, a large portion of the business value may be based on “goodwill”. Goodwill has several definitions, but for purposes of brevity, it is the value assigned to the probability of the business continuing to generate income based on past performance. It can also be defined as the value of the reputation the business has earned, in the community in which it provides services. In professional practice businesses, goodwill can often be closely tied to the owner of the professional practice. This is especially true in the case of a sole practitioner. When a sole practitioner runs a professio
