There are many types of professional practices. Examples include medical, architecture, engineering, accounting, advertising, design and law. From a business valuation perspective, it’s important to recognize the common denominators these businesses share. Reliance on intangible assets Professional practices provide services rather than sell products (at least primarily). In addition, education, licensing and continuing education requirements may limit the individuals who can own and operate a professional practice. So, they tend to rely heavily on intangible assets, such as: Business and owner reputations, Client lists, Trained, assembled workforces, Procedural manuals, Noncompete agreements, and Professional licenses. Professional practices rarely report these intangibles on their balance sheets. Some valuation engagements — such as those related to a divorce or a business combination — may require valuators to identify and assign value...