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3 Tips When to Establish Value for Practice Transitions

Posted On: Friday, April 19th 2013 by

Establishing a baseline valuation lets your potential partner or purchaser know you want things to be fair. Start your relationship with a new partner or associate the right way by putting your economic cards on the table and create a win-win relationship.

Here are 3 tips from dental consultant Dr. Tom Snyder for when to establish a baseline valuation:

  1. To be able to value a practice prior to a partnership formation, you should establish a baseline within the first year of the employment of a new associate who may be a potential partner.
  2. Update the baseline to reflect current economic conditions as well as any additional assets that might have been purchased during the associate’s first year. See an example how to do this.
  3. In situations where the owner feels that hiring a Management Consultant at the outset will not only enhance the success of the associate’s integration into the practice, but also increase the potential for the practice to grow, the valuation for buy in or sale should precede the event.

Read the Dr. Snyder’s full article, When Should You Value Your Practice? He explains the reasoning behind these tips along with an example how to update your valuation by taking into account intangible and tangible assets.

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