“What consideration, if any, should be given to the new dentist as it relates to the increased value of the practice resulting from the associate’s added production during the deferred period (before buying into the practice and becoming an owner)?”
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Absolutely. The best thing the owner of a practice can do when he wants to sell his practice (and has an associate with no contract working in the practice) is to offer to pay $5000 or $10,000 to the associate as consideration for a restrictive covenant that can be transferred to a new purchaser.
When you recognize the clinical and management compensation as an overhead expense, the overhead percentage should be 80% to 85% of annual gross collections for a well run general dental practice.
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