Day to day, you measure the practice on production, collections, and what lands in your account. A buyer measures it on one number you probably never look at: EBITDA, or earnings before interest, taxes, depreciation, and amortization.
EBITDA is an attempt to see the practice's true operating profit, stripped of financing and accounting choices, and adjusted for the fact that you are the owner. That adjustment, called normalizing, is where value is made or lost.
Buyers add back expenses that are really owner benefits or one-time items: your above-market salary, personal vehicle, travel, family on payroll, the one-time build-out. Every legitimate add-back raises the earnings base the multiple is applied to.
This cuts both ways. If your books are messy or your personal and practice expenses are tangled, a buyer will normalize conservatively, in their favor, because they cannot verify what they cannot see. Clean books literally raise your price.
The practical takeaway: start tracking a normalized EBITDA now, even if you are years from selling. It tells you what the practice is actually earning as a business, and it means that when a buyer runs the number, you already know the answer.