A dental practice valuation is a professional and legally-accepted opinion of the market value of your dental practice. There are many factors that an appraiser includes during the valuation process, such as net income, gross income, number of employees, fees, insurance policies, total of number of patients each month, consumer demographics, business location, building size, equipment, loans, and other assets.
Here are several reasons why you should get a dental practice valuation when selling your dental practice:
- Understand Your Dental Practice Better- although you don’t have any intention of selling a dental practice, a dental practice valuation could help define the baseline value. You will know how far your dental practice has grown since its inception. You will be more motivated to ensure the steady growth of your dental practice.
- Easier Growth Forecast- a dental practice valuation gives you financial information to define future growth based on your current marketing objectives, business strategies, and financial goals. It is easier to know whether your dental practice is growing or not.
- Better Retirement Planning- if you are nearing retirement age, it is time to consider an exit strategy. You need a retirement plan and if you want to sell the practice, a good valuation is necessary.
- Asset Protection- for many dentists, the dental practice is one of their prized assets. An accurate valuation makes it easier to protect your assets because there could be unexpected life situations. During a divorce, legal challenge, or tax dispute, an accurate valuation of your dental practice can help you make the right decision.
- Good Succession Plan- in a succession plan, you may plan to pass on the dental practice to a child, relative, or partner. Your succession plan will stay on track if you do annual valuations. As you are nearing the transfer of ownership, the valuation results make it easier to weigh the pros and cons.
- Easier to get Loans- if you plan to expand the dental clinic, add more equipment, or open a new clinic, you may need to apply for a loan. If you are using the dental practice as collateral, the loan application process will be easier and faster if you have an accurate valuation.
Contact Pluto Partners
To learn more reasons why dentists might want to get a dental practice valuation and sell their practices, contact Pluto Partners today and speak with a Healthcare Business Advisor who can answer any questions you might have.
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