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    Why you need an expert evaluator

    Don’t settle for a gimmick — valuation is important and should be done by someone who knows what they’re doing.

     

    Understanding the points in the valuation, such as the demographics from which the patients come may already be known from treatment to these patients and discussions with them. The associate will have seen the cash receipts and disbursements and understand that there is rent to pay, telephone bills, supplies and lab fees. The normalization of profit may be an eye opener to both the selling dentist and to the associate when they see the variable items of expense that may be added back to obtain the normalized profit. The normalization process should let the buyer and seller understand more of what net income the practice is really producing and effectively bring that value to the practice.

    Related article: Why hiring the right experts is critical during divorce proceedings

    Estate Planning and other things

    A certified valuation analyst who understands dental practices can give an explanation about the practice valuation to the dentist who wants to know what the practice is worth in order to plan for the future.

    Estate planning, especially if the dentist has been involved with more than one marriage and may have children from each, is an important potential conflict addresser. Understanding why a practice is worth what it is resolves many issues in the event of death and when the estate is attempting to sell the practice without fully understanding its worth. The most current valuation sets the parameters and allows the attorneys and potential buyers to understand the basis for valuation.

    Bruce Bryen, CPA, CVA
    Bruce Bryen is a certified public accountant with over 40 years of experience and is a part of RKG Tax & Business Services LLP, an ...

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