Valuing the Dental Practice for Associate Buy-In Purposes Methods and Factors
Jan 3 2024 0

Valuing the Dental Practice for Associate Buy-In Purposes: Methods and Factors

If your goal as a dentist is to slow down or have a transition plan in place for when you are no longer practicing in the future, you may be considering an associate buy-in. One of the most important factors that will affect the buying or selling of a dental practice is its valuation. Having an accurate understanding of what a practice is worth is the foundation for effective and productive negotiations. It also helps to avoid potential problems and misunderstandings that can prevent a purchase or sale of a practice from proceeding.

Associate buy-ins are beneficial for many reasons. For the primary dentist, it allows for additional help and assistance in an office. An associate can provide the ability for expansion. They also give a dentist more peace of mind that when they are unable to work or they decide to retire, their practice can easily transition to the associate who will take over and keep things running.

For associates, a buy-in allows for a lesser initial investment which can make the prospect more practical. It also allows an associate the ability to become a better professional as they can train and be mentored under the primary dentist. In addition to perfecting one’s dental skills and capabilities, an associate can learn the business side of things and how to run a practice. Finally, when the time comes an associate can take over a practice as the primary dentist.

Due to the complexity that comes with the associate buy-in process, it can be helpful to have an attorney’s assistance. In California, the Los Angeles associate buy-in attorney at Leiva Law Firm can help navigate the associate buy-in process to protect a buyer or seller’s legal interests as well as help them work through every step seamlessly.

A Future Sale of a Dental Practice to an Associate

Valuing the Dental Practice for Associate Buy-In Purposes Methods and FactorsWhen valuing a dental practice’s worth for a future sale to an associate, it is important to establish what the current value of the practice is. From here, changes over time from the initial valuation that may transpire when the associate and primary dentist are practicing together make the final transition move along more smoothly.

A professional valuator in the dental industry can provide the most accurate and clear determination of a practice’s worth. Some of the factors that will be examined will include:

  • The location of the practice.
  • The current revenue sources.
  • How visible a practice is to potential new patients.
  • Potential for growth and increased revenues in the future.
  • The rate of retention for existing patients after a sale.
  • The physical practice, its size, a lease or own, condition, and aesthetics.
  • The physical condition, age, and capabilities of equipment.
  • Identifying long-term trends for revenue and profits.
  • Current patient attraction rates.
  • Current patient retention rates.

Talk to an Attorney at Leiva Law Firm Today

Valuing a California dental practice is a complicated task that must meticulously consider all current and potential future factors. While the value of a practice can change with time, it is imperative to get an initial value at the time of negotiations to better facilitate a future final sale.

For assistance with a dental associate buy-in in California, please call the Leiva Law Firm at (818) 519-4465. 

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