Dental Valuation Solution

Doctor, you are a member of an affluent profession.  As part of over 152,000 dentists in the United States, on average you earn more than 95% than the rest of the country earns in income.

Yet when you approach retirement age, historically only 7% of all dentists have been able to retire and MAINTAIN their current lifestyle.  Why is that?  And more importantly, are you one of the 7% that can retire "wealthy"?

There are many reasons for "retiring poor" but one big mistake most dentists make is thinking they will sell their practice and that "sale" will fund a large portion of their retirement.  They've heard the rule of thumb of 60% of last year's collections is what they can expect to get for selling their practice.

Don't Bet Your Retirement

On "Rules Of Thumb"

Correctly understanding the VALUE on your dental practice is critical to any retirement planning you are doing or will do, to determine how you will live after retiring.

If you overvalue your dental practice and end up getting far less than your asking price at retirement, any retirement plans that hinged on that "value" might be shot down or reduced significantly.

Many dentists are blindsided by this and are forced to continue to work an extended number of years past "retirement".  Of course the best way to avoid this situation is to have a professional valuation of your dental practice completed now, so you have a solid reference point on which to base your retirement plans.

What Is The Value Of My

Dental Practice?

With our sister company Finance Geeks, Patton and Associates LLC will perform a complete dental practice valuation based on several factors such as collections, margins, revenues per operatory, return on assets, return on equity, total revenue, cost of good sold, labor costs and more.

Your Dental Practice Valuation will come with a detailed report which can help you understand the value of your practice today as it relates to others in your area.  What were the selling prices of other practices in your geographic area over the last 3 years?  How does your practice compare?

This will allow you to benchmark against other sold practices to enhance the value of your own practice.  This alone is an essential component when constructing a plan of wealth creation for dentists and may prompt you to further grow your practice to accelerate your wealth creation.  Or the report might show you have sufficient practice value that might allow you to retire early.

In any case a professional Dental Practice Valuation can become one of the foundation blocks of your retirement plan.

Other Reasons For A

Dental Practice Valuation

Divorce - in most divorce cases you first “value” and then divide assets. As a dentist your practice can be one of if not the largest asset you have. So you’ll need a business valuation to present to the court that fairly values your practice.

Buy / Sell Agreement – If you are one of two or more dentists in a practice you may have a buy/sell agreement between you. In a typical buy/sell agreement it may state if one of you dies, the surviving dentist then pays the widow or the estate of the deceased dentist half or some percentage of the “value” of the dental practice. Predetermining the value of you dental practice is critical to this process.

Insurance Policies – Dentists often directed buy insurance policies to cover their liability in a buy/sell agreement in the case of the death or a partner OR an associate leaving a practice.  Determining the value of you dental practice to determine the size of the insurance policy is part this process.

Estate Planning – Weather it's with your attorney or CPA and you are talking about splitting assets for an A/B Trust, a Credit Shelter Trust, A Marital Bypass Trust or an ILIT (Irrevocable Life Insurance Trust) you will want to know what your estate is worth and the value of your dental practice will constitute a large part of your estate.

Adding an Associate (or an Associate leaving) - In either case you may want to value your practice professionally in order to construct a buy/sell agreement or in the case of an Associate leaving, to buy out your Associate so you regain total ownership of your practice.

Get Started On Your Dental Practice Valuation Today

To get started on your Dental Practice Valuation or if you have specific questions you need answered, call Troy Patton, CPA at 317-581-1300 or click here to email Troy your questions.

Finance Geeks’ parent corporation is Patton & Associates, LLC, a Midwest CPA and Consulting firm whose main purpose is to support the Dental practices we serve to assist in wealth creation, preservation, and operational efficiency.

Click here to learn more about Patton & Associates, LLC.

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