There is a very important acknowledgement that one needs to make if they are seeking a PCA partner to provide back-up and support. That acknowledgement is that the PCA partner gets all the headaches and does not really reap the rewards, especially if the reason for triggering the PCA is short-term disability. Therefore you must make this attractive or they won’t do it… and neither would you if the shoe was on the other foot.

In summary… be realistic!

An agreement creates attractive value by taking into consideration the following:

Other variables impacting the valuation:

Here is a list of items to review and please keep in mind you cannot negotiate the value under today’s circumstance which is that you are well and healthy. You must make allowance for the risk and workload the successor is assuming.

Other assets, either acquired or required, to be included

Participation in Future Growth

Remember, especially in the case of temporary disability, it is more important your PCA partner keep your asset alive and doing well, than for you to make money on their efforts during the initial stages of an enacted PCA agreement.

In the event of its exercise, a PCA is a distressed situation at best, and it’s likely that the practice has or will sustain losses – i.e. financial, client, reputation, time, retention and referral network. It is also highly probable that you are most likely unavailable to perform any meaningful transition or service. The bottom line is that if you don’t make the financial component of the PCA attractive, why would anyone agree to do it?

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