Professional practices differ from other businesses because they do not typically offer a tangible product. These are primarily service businesses, which require that the owners possess special expertise. Their most valuable assets are typically intangible in nature and classified as "goodwill." The goodwill can be divided between professional and practice goodwill. Professional goodwill is based on earnings that result from the practitioner's individual reputation, skills, knowledge, personality, and other factors. Practice goodwill is based on earnings resulting from the practice's location, telephone number, facilities, capital structure, staff, advertising, reputation, and other factors.
