CAVEAT: This free appraisal is not a substitute for a thorough, onsite appraisal by a qualified dental practice broker. A broker appraisal will be far more accurate evaluating the quality and value of the practice's location, leasehold improvements, equipment, and patient mix. Furthermore, brokers have better access to comparable sales and can better track current market conditions. Finally, many brokers charge a reduced rate to prospective clients, and if you list the practice for sale with that broker the fee is usually refunded. Please see my Broker's Directory or ask your own broker for further details.
Another more direct way to value a practice is to have a qualified dental practice lender analyze the practice to determine how much they would lend to a well qualified prospective purchaser. I tell my well qualified buyers that if the lender won't lend to the full amount of the purchase price, the price is too high. Be cautious with this method, because some lenders are very aggressive in making loans. From a buyer's perspective, a more conservative lender is actually doing you a favor by lending only the lesser amount, since that gives you a bargaining chip with the seller to lower the price. Please see my Lender's Directory or call me for more guidance.
To request your free dental or orthodontic practice appraisal, you will need to provide the following:
the practice's gross and net income over the last three calendar years (orthodontists should provide current contracts receivable),
the current fair market value of your equipment,
your type of professional practice and specialty (if any),
your type of location (medical building, mall, anything that relates to presence of walk-up traffic),
whether or not the seller would continue as a co-owner after the sale, and
if the seller will not continue as a co-owner, how long the seller has worked previously with the buyer and will remain afterwards for transition assistance.
You should add back to net income any expenses that should be considered extra compensation to the seller (such as large one-time equipment purchases, interest on business loans, spouse's/children's salaries, personal pension contributions, and business auto or vacation/education expenses). All information will be received in the strictest confidence.
Buyer and seller may choose to accept this appraisal as the agreed price, or may modify it in any manner they wish. If the seller intends to finance the purchase, or if the buyer does not need financing, a formal appraisal is not required. A formal appraisal may be necessary in order to obtain institutional financing.