Are you looking to purchase a dental practice? Maybe you are seeking a buyer for your current practice? Perhaps you are considering expanding your dental practice and want to take on new partners? Whether you are interested in buying, selling, or expanding, it is wise to get a sense of the current market. After all, you need to know what your practice is worth, or how much of an investment might be required. With that in mind, here are some tips for determining the value of your dental practice.
1. Understanding the Complicated Nature of the Valuation Process
From the outset, you must recognize that performing a dental practice valuation is a complicated matter. There are several aspects that factor into the valuation and an accurate value assessment is crucial when planning to buy, sell, or prepare for a dental practice transition. As such, it is important to take your time and perform your due diligence before committing to anything legally binding.
2. Hire an Experienced CPA or Property Broker to Help Navigate the Process
Given the stakes involved, it only makes sense to have a knowledgeable meditator in the mix to ensure that the valuation is performed properly and efficiently. Whether you are interested in buying, selling, or just testing the waters, you want to be confident that the dental practice has been assessed by experienced agents who know their stuff and understand the community. This is one way to help ensure all parties involved walk away from any deal satisfied. Moreover, these brokers can also help you understand the different valuation approaches and decide which is best for your particular practice and specific needs.
3. Distinguishing Between Fair Market Value vs. Final Sale Price
Another crucial consideration to keep in mind is that fair market value for a dental practice does not always equal the final sale price. While a seller will want the best price possible, there are many factors that determine the final sale price agreed upon by all parties. Similarly, a buyer looking to acquire or join an expanding dental practice is seeking a fair deal with a favorable rate of return on their investment. This is where the difference between the fair market value, which is what a buyer reasonably expects to pay for the assets of the practice being sold, and the final sale price, which is the sum agreed upon, are highlighted.
Some of the factors that can affect the final sale price may include the following:
–Practice or brand reputation.
–Number and competency of staff
–Accessibility of building/practice
Alas, these are just a few of the factors that can affect the valuation and final sale price of your practice. At Encompass, our experienced brokers are trained to navigate the various factors that may affect the value and sale price of your practice. We are committed to helping determine the fair market value of a property, and aiding you in buying or selling your dental practice on the best terms possible. For more details on our services, contact us here.