August 7, 2018
3 Factors that Contribute to the “Goodwill” of Your Dental Practice
When looking to sell your dental practice, think quality over quantity. That is to say that hard assets, like equipment, are only worth what it will resell for rather than what insurance will pay for it and are therefore easy to put a price tag on. However, what makes up the majority of your practice’s value — as much as 80% — is its goodwill, those non-categorized assets for tax purposes that assist in the valuation process and help obtain the appropriate financing for the transaction. Here are some intangibles to focus on that will ultimately generate long-term income for a buyer.
When a dentist who has good standing in the community sells a practice, the goodwill of that practice is transferred over to the buyer. Ensuring a successful transition starts before signing on the dotted line with the practice name, location, and brand awareness and marketing.
A dental practice is nothing without its patients, so it’s important to take into consideration the value of current patients who have active appointments, referring dentists, patient charts and recall system of an established practice, all of which can’t be duplicated when starting from the ground up.
Staff loyalty and longevity
How long the staff has been with the practice can often dictate who would remain with the practice during and following the transition. With both patients and staff, notification about the sale until after the asset purchase agreement is signed and the transaction goes through will also contribute to a successful transition.
Read more about the goodwill of your dental practice in the e-book “Strategies for Transition,” then contact the experts at Professional Transition Strategies to begin the valuation process.