The Part of Your Practice That Does Not Retire

A practice manager told me this week that her website was fine. She was right, and I did not argue. That is not the interesting part.

The interesting part is what she had told me ten minutes earlier in the same call.

What she actually said

I asked where the owner was in his career. Her answer, word for word, was that he is "on the back end of what he wants to do here". I asked whether that meant retiring in the next year or two. She said two to three.

I asked whether he might sell. "We're discussing, we're still discussing that."

I asked whether anybody on staff wanted to buy it. No. The newest associate is six months out of school.

Then I asked the ordinary questions. The practice turns over a little more than two million dollars a year. The owner works six days a week. They are booked out at least a week. Things are going well. In her words, really well.

Later in the call I asked what she thought of the website. "I think it's fine, you know, it's always been fine. I've never had a problem with it." I asked directly whether the doctor needed a refresh. "Not really. No."

She is not wrong about any of it. The site works. It loads. It has never embarrassed anybody. If the question is whether the website is a problem for the practice today, the answer is no, and that is what I told her.

But that is the wrong question for a practice that is two or three years from changing hands, and it took me most of the call to work out why.

I should say where I am coming from. Before I worked in digital marketing I bought and sold businesses, and I worked as a business analyst on mergers and acquisitions, reading P and Ls and balance sheets for practices and other service businesses. So when somebody tells me the owner is on the back end and nobody inside is buying, I stop thinking about websites and start thinking about what the thing is worth to a stranger.

Who the buyer probably is

If no associate is buying, the practice sells to somebody who is not in the building. Increasingly that is an organization rather than a person.

A 2025 SWOT analysis in Frontiers in Veterinary Science, drawing on Brakke Consulting's 2022 industry overview, puts the corporate share of the profession like this:

Specialty and emergency practices

75%

Share of all national veterinary revenue

50%

Primary care practices

25%

Dentistry is earlier in the same curve, and the generational split is the part worth looking at. The American Dental Association's Health Policy Institute reported that in 2024:

Dentists less than 10 years out of school

27%

All US dentists

16%

Dentists more than 25 years out

9%

Read that bottom chart as a forecast rather than a snapshot. The people who might one day buy your practice are roughly three times more likely to be attached to a group than the people who own practices now.

This matters because an individual buyer and an institutional buyer look at completely different things. An associate who has worked beside you for eight years already knows the clients and the reputation. A group that has never set foot in your town knows only what it can verify from the outside.

What a buyer is actually buying

Here is the part that surprises owners, and it is not opinion. It is on a tax form.

When a practice sells its assets, US law requires the two sides to split the purchase price across seven classes of assets and report it. The IRS instructions for Form 8594 are blunt about who has to do this: "Generally, both the purchaser and seller must file Form 8594 and attach it to their income tax returns."

The seven classes, in the order the form lists them:

Class I

Cash

Class II

Securities

Class III

Receivables

Class IV

Inventory

Class V

Equipment

Class VI

Intangibles

Class VII

Goodwill

Everything an owner thinks of as the practice, the building contents, the ultrasound, the surgical suite, the inventory on the shelf, is Class V and below. Those get valued first, at fair market value.

Classes VI and VII are what is left. Class VI is defined as "All section 197 intangibles (as defined in section 197) except goodwill and going concern value." Class VII is "Goodwill and going concern value."

Now look at what section 197 of the tax code actually names as an intangible a buyer can purchase. The list includes "any franchise, trademark, or trade name". It includes "customer-based intangible", which the statute defines as the "composition of market, market share, and any other value resulting from future provision of goods or services pursuant to relationships (contractual or otherwise) in the ordinary course of business with customers."

Composition of market. Market share. The value of relationships that will produce future business. That is not marketing language. That is the United States Code describing a thing somebody writes a check for.

15years is how long the buyer then amortizes that intangible value against their own taxes, under the same section. The buyer is not being poetic about your reputation. They are putting it on a schedule.

The two kinds of goodwill

The rest of this comes down to one distinction that business appraisers make and most practice owners have never heard.

Goodwill splits in two. Brent Sloan, writing for the valuation firm Stout in 2022, defines personal goodwill as the characteristics owned by an individual, including their personal relationships, reputation, experience and skills. Enterprise goodwill is the set of characteristics owned by the business itself, and it is the one that is "transferable to a new owner upon a merger or sale."

This is not an academic distinction. In Martin Ice Cream Co. v. Commissioner, 110 T.C. 189, decided in 1998, the Tax Court held that where the key individual had no employment agreement and no noncompete with his own company, his relationships were never the company's to begin with. A corporation cannot sell what it does not own.

Same logic, applied to a practice. The part of your value that lives in you cannot be sold, because it is not yours to convey. It is simply the price of your continued presence, and a buyer will structure around that with an employment agreement, an earnout, or a discount.

The part that lives in the business transfers on closing day.

Sloan's list of what counts as enterprise goodwill is worth reading slowly. Among the attributes: "Referrals directed to the business (not specific individuals)". "Product or service brand recognition". "Overall business reputation". "Impersonal business name". "Established systems and organizational structure".

Which pile is your website in

Sort your own practice into the two columns and the answer is uncomfortable.

The owner's own client relationships

Personal

Walks

The owner working six days a week

Personal

Walks

The owner's standing in town

Personal

Walks

Knowledge nobody wrote down

Personal

Walks

The trained team

Enterprise

Stays

The practice name

Enterprise

Stays

The review profile

Enterprise

Stays

The map listing

Enterprise

Stays

The website and where it ranks

Enterprise

Stays

A website, a search position, a Google Business Profile and a body of reviews are referrals directed to the business rather than to a specific individual. They are brand recognition and business reputation, carried by an impersonal name. Every one of them keeps working on the first morning the founder does not come in.

That is the whole argument, and I want to be careful not to inflate it. I am not claiming a website is the biggest item on anybody's asset schedule. It is not. Earnings are. I am claiming it belongs in a category most owners have never put it in.

The practice I opened with turns over a little more than two million dollars a year on an owner working six days a week. In appraisal terms, a large share of that is sitting in the personal column. The things sitting in the enterprise column are the things that keep producing appointments when he stops.

The number that does not exist

You will find people who will tell you that a good website adds some specific percentage to a sale price.

I looked for that number. It does not exist in any source I would put my name to, and I am not going to make one up. Anybody quoting you a figure for what a website adds to a multiple is giving you informed guesswork, mine included.

What can be said without inventing anything is narrower and, I think, more useful. Valuation practice treats brand recognition, business reputation and referrals that come to the business rather than to a person as enterprise goodwill, which is the transferable kind. Tax law treats market composition, market share and customer relationships as purchasable, amortizable assets. A website and the search position it holds sit squarely inside both of those descriptions. What any individual buyer pays for them is a negotiation, not a formula.

If you are two to five years out

Practical, and none of it requires buying anything today.

1. Ask your accountant how a sale of your practice would be allocated across the Form 8594 classes. Ask specifically what lands in Classes VI and VII. You will learn more about your own business in that conversation than in any marketing meeting.
2. Write down which of your revenue arrives because of you personally, and which arrives because of the practice. If you cannot answer, a buyer's advisers will answer it for you, and they will be conservative.
3. Check that the practice name owns the assets, not you. Domain registration, the Google Business Profile, the review history, the social accounts, the phone number. I have seen all of these sitting in a departing office manager's personal account. An asset registered to a person who is leaving is not a transferable asset.
4. Keep the reputation compounding. Reviews accumulate over years and cannot be bought in the quarter before a sale. That is precisely what makes them worth something to a buyer.
5. Do not start a project in the last year. Anything rebuilt three months before a letter of intent looks like staging, and a fresh site with no history behind it is worth less than an ordinary site with seven years of standing.

That last point is why I did not push the practice manager for a refresh, and I want to be honest that it cuts against my own interests. Her site is seven years old, it ranks, and it has a long record. That record is the asset. If they eventually decide the site should carry more weight, there is time to do it properly and let it season. If they do nothing at all, they still own something that transfers.

Either way, "it's fine" and "it's worth something to somebody else" are two different findings. Only one of them shows up at closing.