WHAT’S THIS PRACTICE WORTH?
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I get calls almost daily from people asking me “What’s this practice worth?” Most of these calls are from buyers considering a practice for purchase, but sometimes they are from sellers wanting to know what their practice is worth. I usually bow out, for a variety of reasons.
Now, I’m going to tell you what I think. After 25 years in the Practice Transition Business as a Practice Sale Broker, and almost 40 years (eeck!) as a now non-practicing Dentist, and over 25 years as a Licensed California Attorney – it is about time I open my mouth and tell you what I think!
I’m not going to do the work for you, because that defeats the purpose of what I want you to learn. I want you to make good financial decisions for yourself, consistent with your values and goals. In fact, if I’m talking to a buyer, I don’t even want to know the seller’s name, just the city of the practice.
This is formulaic and not personal – and that is the way I think ALL reasonable buying (or selling) decisions should be. These decisions are not and should not be personal, nor should they be emotional, and they certainly should not be taken lightly.
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RULE THE PRACTCE IN – OR OUT
I really believe you need to relatively quickly rule a practice OUT or IN. Before you spend a lot of time and money on consultants, accountants, attorneys.
IF YOU ARE A SELLER
If you are a seller, you need to be very realistic about what your practice is worth and how much you will likely take home after taxes. Can you afford to retire? I want you to understand why or why not – and if you need to work another year or two.
IF YOU ARE A BUYER
If you are a buyer, the practice MUST make money AND has to be able to make even more money for you going forward. The only type of practice you should consider is one that makes money. You must always remember are buying a business, not a home.