Don’t Under-Value Your Dental Practice.
The Science of Dental Practice Valuation
A business valuation is many times misidentified as an art and not a science. Some believe that it is impossible to get an accurate valuation of your practice. This is just not so. There are many valuation methodologies and all are thought to be, when used alone, inaccurate; therefore many evaluators average the results. Unfortunately, averaging inaccurate data doesn't make it more accurate nor does it make sure that the value makes any business sense.
We perform our valuations to the following standard:
A business is worth that price at which it must be able to pay the debt, at market conditions, structured from the sale.
It must also pay the owner a fair market salary.
It must pay the owner a return on investment.
We have found that at any "snap shot" in time, there is only one value that can simultaneously meet these three criteria. Therefore it is mathematically quantifiable to any buyer or stakeholder.
The valuation of a dental practice is a complex process. A detailed financial analysis of the practice is required by a professional with an understanding of the principles of practice valuation and their practical application to the practice being evaluated.
Your Brand
One of the most important functions of a dental practice valuation is to give proper consideration to the "brand" or intangibles of good will, customer lists, licenses, etc. that you have built over the years in determining the total value of the practice.
Partnerships, Spin-offs, Roll-ups and/or Mergers
As dental practices grow and secure more and more market share they begin to realize just how difficult it becomes to continue to grow at the rate that their practice goals might require. Whatever your choice, we can help determine what is best for your practice.
Debt
If the practice is worth more than the fair market value of its assets, it also has an intangible value built from the brand created by the owner. Based on a bank’s loan to value ratio of the dental practice’s fair market value of its assets, the buyer may not have a down payment large enough to cover the difference or gap of the bank loan and the downpayment. To get the full fair market value of their dental practice, the owner may be required to hold part of the debt. This is a key reason why the buyer’s anticipated debt service must be considered as part of the valuation process to help assure that the seller will be paid and the buyer can pay it.
“The Optimization methodology utilized by the TASCON team had a profound impact on my business and empowered myself to remove an 18-month dispute in a matter of weeks. The results are accurate, verifiable and stand up in to peer review.”
— JK, PRINCIPAL– PROFESSIONAL PRACTICE