It’s obvious that a current practice appraisal will be necessary if the practice is to be put on the market, but this isn’t the only reason for obtaining an up-to-date valuation. In fact there are several very valid reasons as to why it’s a good idea to know the current value of your dental practice, as it can enable you to plan for both the expected and the unexpected. Some of the most common reasons for getting a practice appraisal include:
- Estate and financial planning. Many financial advisers recommend dentists know the current value of their practice so it can be integrated into retirement and estate plans. Regular practice appraisals will then tell you if your plans are on target or if they need adjusting.
- Planning for an associate buy in or buyout. Associates can be very difficult to find, and few practice owners prepare properly for buy ins or buyouts. Transition plans should include documentation showing the present value of the practice, and its transition date value.
- Preparing to sell part of a practice. Some practice owners think it can be difficult to sell a large, thriving practice, but in fact such practices are often very attractive to buyers. In these situations it may be possible for the practice owner to continue as a partner or associate.
- Preparing to sell a complete practice. This is the most common reason for getting a practice appraisal, and the sooner a valuation can be conducted the sooner the practice can be sold.
- Divorce. Although appraisals can be conducted by an attorney or accountant for a divorce, they are unlikely to accurately evaluate the true worth. It’s essential in cases such as these to have the appraisal done by someone with in-depth dental expertise. This can also save time as their valuation is far more likely to be accepted by both parties and in court.
- Disability, illness or death. No one likes to think about this occurring, but having an appraisal which is regularly updated can help alleviate much of the stress associated with dealing with these issues. If a qualified practice broker has already been selected to sell the practice in the event of death, disability or illness it will make the dental practice transition far easier. Having this type of plan in place will give peace of mind to dental practice owners and their families.
A proper dental practice appraisal requires considerable skill and in-depth expertise on the part of the appraiser, who will often use several different methods to obtain a correct valuation. If you are interested to know the value of your dental practice, then please contact us for a free dental practice appraisal.