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There are many sources for dental practice valuations prepared for a buyer or a seller of a dental practice to assist in determining the asking price, size of the practice, background information, and infrastructure, among other important details. Quite a few of the practice brokers have divisions within their operations that can supply the dental practice valuation. These valuations are not simple to prepare but they are not special requests either. They need some specialized training or expertise for completion with accuracy.
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There are many valuation service companies to choose from for a competently prepared report that can be used to guide a buyer or seller through the transition process at an affordable price. When it comes to a special purpose request for a valuation, the training, experience, and expertise for the preparation of the particular type of purpose becomes one of a much lesser number who are able to approach this type of engagement responsibly. Different special purposes can be for a divorce, partnership dispute, estate value, gift tax, and/or other kinds of reason that are different from the traditional transition of the dental practice. The pricing for these valuations are much higher than those which have the purpose of a transition of a dental practice, no matter how large or small. The key to an accurate informative preparation is the knowledge gained from experience and the overall ability to understand that this valuation is one that will take up to five times as long to prepare as a dental practice valuation used for a sale. From a one-page transition valuation to as much as a 100-page report, including a goodwill allocation between the dental practice as an enterprise and the personal goodwill of the dentist, the special purpose valuation is much more complex and sophisticated than the dental practice valuation prepared for a transition.
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As a comparison of which evaluator you would prefer, think of the local store front, non-CPA, who is a tax return preparer, who probably does not have the expertise of a CPA with experience in the preparation of tax returns and who can answer difficult and sophisticated questions. The price for the tax return preparer who works from a store front is probably much less than that of an experienced full-time CPA who has more experience and knows what to look for when beginning the preparation of a tax return and when answering complex areas of the tax code. That CPA also knows that each dental business that he or she takes the time to study has certain distinctions that the store front accountant would not know because of the lack of experience in completing specialized tax returns indigenous to the dental world. The question becomes one of, who is more likely to do a better job â¦ not the job and result that the dentist may want to hear, but the more complete, accurate presentation of the results of the value for the special purpose the engagement took place? Those with the experience know that the accurate preparation and presentation time of a special purpose valuation compared to a presentation for the purpose of a transition, may take much longer. The price must be adjusted accordingly for that expertise and time. It really is a supply and demand situation for the pricing model, let alone if things are more involved than the norm.
When it comes to pricing, it seems that everyone wants to get something for nothing. There is an old adage about getting what you deserve, especially when what you get is the report that you tell the evaluator you want to see. The end result may be that the inexpensive special purpose valuation will be ignored by a court, mediator, or other such arbiter of the case involved and the entire valuation will be deemed to be worthless. Now the cost of the report will more than double since the entire report will have to be prepared again. The independent evaluator will not want to listen to anything that may skew his or her opinion in advance or during the process of the preparation of the valuation. The evaluator will want to maintain his or her independence so that the report that is issued will have the clout with the final decider of the value of the dental practice in question.
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