The ADA Practical Guide to Valuing a Practice offers a balanced approach to practice valuation for both buyers and sellers. Refuting many common myths of valuation, Valuing a Practice raises awareness of possible legal and tax issues that may arise during this critical process. Also provides guidance on selling or buying an entire practice, a portion of a practice, and planning a future buy-in or buy-out.
Other features include:
• Definitions of key terms
• How to select a person to perform the valuation
• How to choose the valuation method that is right for you
• Examples of sales documents and contract provisions
• Detailed explanations of various valuation concepts, such as the capitalized earnings,
discounted cash flow and net asset methods
• Case studies
• Sample sales agreement
Understanding the intricacies of valuation is crucial to the success of your transaction. Be informed and knowledgeable with help from the ADA.
Table of Contents
Chapter 1: Practice Value
Concepts of Value
When Should a Practice Be Valued?
Fair Market Value, Price and Terms
Chapter 2: Critical Valuation Issues
Critical Valuation Issues
Valuation Assumptions and Limiting Conditions
Information Required to Perform a Valuation
Chapter 3: Valuation Methods
Which Valuation Method is Right for You?
False Assumptions Concerning Practice Valuation
Valuation Concepts and Earnings Methods
Capitalized Earnings Method
Discounted Cash Flow Method
Asset Approach: Net Asset Method
Market-based Approach
Chapter 4: Factors Complicating the Valuation Process
Associate Buy-outs and Buy-ins
Valuing a Portion of a Practice
Inadequate Financial and Clinical Records
Valuing Specialty Practices
Participation in Managed Care Programs
Employment of Family Members
Dentist-owned Real Estate
Practices with Multiple Office Locations
Chapter 5: Buying a Practice versus Starting a Practice
Advantages and Disadvantages of Buying a Practice
What a Seller Should Know
What a Buyer Should Know
Case Studies: Starting versus Buying
Case Study I: Starting a Practice
Case Study II: Buying an Existing Practice
Associate to Owner
Chapter 6: Preparing for the Sale and Using Advisors
Marketing the Practice
Finding a Buyer
Showing the Practice
HIPAA Implications
Buyer Qualifications
Negotiations
Advisors
Selling All versus Part of a Practice
Chapter 7: Legal and Tax Issues
Legal Documents
Tax Implications
Sales Contract Provisions
Installment Sales
Other Sales Documents
Other Provisions
Conclusion
Appendices
Appendix A: Sample Letters
Appendix B: Sample Sales Agreement
Additional Resources
