A local lab to me has recently showed interest in buying me out and having me manage their lab. I am waiting for their offer but really don't even know the ballpark of what it's worth. I am a 3 person C&B lab doing about $38,000 per month. I'm having a hard time finding out a solid number or even a formula to figure out a labs value. Any help would be appreciated.
A lab of your size represents a challenge to value.
Standard valuation of a lab is 3-4x ebitda, scales up or down based upon size, systems, technology and succession plan.
Small labs are exceptionally hard to price because the primary value is “goodwill” which is usually tied to the owner. If the owner leaves the lab is basically worth nothing (or the sale price of the equipment at auction, usually around 20 cents on the dollar.)
From your perspective you should look at two things, and you have to be brutally honest (or get an unbiased expert to look at it and give you an opinion, because we all think our own kids are beautiful lol)
1: what is the viability of you lab over the next decade (or however long you would expect to keep running it) this is a function of: market position relative to the trends in the industry-locally and nationally, leveraged debt, technology, competitors etc.
2: how much can you earn over that time, with the level of commitment you expect to deliver, as an owner vs as an employee plus buyout.