Medical Practice Fixed Asset Appraisals - How to Prepare for Your FFE Site Visit

A typical medical practice is full of assets – from the coffee maker to the exam tables to the otoscopes. When selling a medical practice, the goal is to secure the best price possible to recoup the maximum remaining value of the initial investment for fixtures, furnishings, and equipment (FFE). Depending on the buyer and type of transaction, fixed asset sales may require a fair market value appraisal and a site visit from the appraiser.

A site visit gives an appraiser the opportunity to gather the details necessary to inform a quality valuation, such as model numbers, manufacturer specs, and the age and condition of each asset. Best practice is to schedule the site visit to allow for easy access and adequate time for the appraiser(s) to locate and document this key information. After business hours (when staff and patients are gone for the day) is often preferred timing because it allows for more efficient and uninterrupted accessibility of workspaces, treatment rooms, and equipment storage.

When scheduling a site visit, it's important to convey the realistic scope of work to the appraiser, including the size of the facility (i.e., square footage and number of rooms) and any pertinent details regarding equipment to be included in the appraisal. This communication is important in planning an effective visit and aids the appraiser in scheduling adequate personnel and allotting sufficient time.

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Designation of a knowledgeable staff member to serve as the contact person for the appraiser before, during, and after the site visit is a key action item. Ideally, the contact person will have ready availability and will be capable of representing the practice in the best light. On the day of the site visit, the contact person will greet the appraiser(s), lead a tour, provide a facility floor plan, answer questions, and provide relevant documentation. The contact person doesn’t need to be a physician but appointing someone with basic knowledge about the practice’s assets, including location and function, is beneficial.

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We recommend that medical practices prepare the following lists/inventories when preparing for their appraiser’s site visit:

• Surgical tools and/or other small equipment that could be overlooked in drawers or cabinets

• Items secured in restricted spaces and locked rooms such as hot labs, drug closets, and biohazard areas

• Expensive/high-tech equipment including noted details of add-ons, special configurations, and software updates (it is also helpful to provide copies of invoices, proof/dates of maintenance, and other relevant documentation)

• Any leased or personal items that will be excluded from the sale

• Portable equipment that may travel outside of the office (i.e., goes home with patients or staff on a regular basis)

Preparation for a site visit also includes cleaning the facility, wiping down FFE, and removing clutter. The appraiser will take a very close look at the practice, and dust and grime do not add value. An unkempt environment could detract from the appraiser’s assessment of the assets’ condition, upkeep, and maintenance.

Overall, a little preparation goes a long way in helping a site visit to go smoothly. While many factors play into asset valuations, a productive site visit can help an appraiser catch on to hidden value and deliver a more accurate appraisal.

BFMV specializes in the appraisal of healthcare businesses, assets, and services. Contact us for assistance with medical asset appraisals or other valuation-related matters.