Why Gross Is the Method for Pricing a Practice

Ed Mendlowitz CPA The Practice Doctor Q and ABONUS CHECKLIST: 11 questions to make sure you’re comparing apples to apples.

By Ed Mendlowitz
The CPA Trendlines Practice Doctor

QUESTION: Everyone I talk to about what my practice is worth talks about a percentage or multiple of gross. Just what is “gross” and why is it done this way?

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ANSWER: You are right that practices are priced based on gross. The main reason is that this method seems to work well. However, there is a wide range of what gross is and how it is applied.

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