I met a recent dental school graduate looking for a practice to buy. He was married and had one child and a second on the way. He was trying to decide what area he was interested in purchasing a practice and he felt compelled to explain to me that “the money was just not that important.”
We are oftentimes asked if it would not be prudent to hire an associate, practice together for a while and then if both parties decide they like each other, draw up a contract at that time. The purpose is to discover more about the other party before making any long-term commitments. This is probably the most widely used approach by dentists, and unfortunately, the most often abused.
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The most widely used method for determining practice value is fair market value. The commonly accepted definition of fair market value is the price which a professional practice would produce, allowing reasonable time to find a purchaser, with both buyer and seller having access to full disclosure of information about each other.
Clinical supply expenses indicate good business acumen or sloppy oversight...
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