Can I appraise my own practice?

I'm about to sell my practice. Is there any reason why I can't do the appraisal myself?

Susan J. Flemming

"While there's no law against appraising your own practice, the potential consequences aren't worth the risk," says Susan Flemming, MBA, a management and valuation consultant with Wutchiett Tumblin and Associates in Columbus, Ohio. Some hazards to consider:

• If future litigation occurs, you'll be liable for any misrepresentation.
• The buyer's lending institution will probably require a certified valuation report. As with real estate, if the professional appraisal doesn't support the selling price, the transaction goes back to square one.
• If you overvalue the practice, it may remain on the market for a long time. Even if the practice was in great shape when you put it up for sale, the long posting could make potential buyers wary and may affect clients' perception of stability-which could hurt practice value.
• If you undervalue the practice, you'll short-change yourself. And you deserve a fair return on the investment you made to build a strong practice.

"The cost of these consequences likely will outweigh the cost of a professional valuation," Flemming says. A fringe benefit: If the appraised value is low, an experienced veterinary consultant can help you build practice value.