Before selling your dental practice, there are a few factors to consider that will help USDT package and market your practice. Our experienced advisors will work closely with you to determine your goals for the sale to ensure a smooth transition for you, your staff, and your patients.
It can take anywhere from several months or even up to several years to sell a dental practice. Some factors that determine how long it takes to sell a practice include its condition, location, price, and the number of dental operatories. The more desirable the practice, the faster it will sell.
Dental practices sell fastest when sellers start early, set realistic expectations about the value of their practice, and keep all equipment and facilities up to date. The best way for you sell a dental practice quickly is to contact a dental practice transition advisor — experienced in all kind of sales, including mergers and acquisitions.
How much you can sell a dental practice for depends significantly on the valuation method used and the current market. Selling prices are also influenced by the number of dental operatories, as well as the location and condition of the building and equipment.
Yes, but you should only consider this if your practice is large enough to support more than one doctor, and that your internal growth potential is at least between 30%-50%. If you are unsure of your practice’s internal growth potential, you should contact a dental practice transitions consultant to get an in-office analysis.
You should expect to pay both federal and state income taxes on the gain of selling your practice, which is calculated as the difference between the sale price and the tax basis in the sold property. Tax basis is the amount of your capital investment in the property for tax purposes, specifically.
If your practice is listed as a Regular “C Corporation”, all income from the sale is taxed at the federal corporate rate of 34-35% for income greater than $335k/year. However, if your practice was set up as a regular partnership (LLC or LLP) or a sole proprietorship (“S Corporation”), a sale means both ordinary and capital gains are paid by the owners on their personal income tax returns.
For practices sold in states with no state income taxes (Florida, Tennessee, Texas), there is no state tax implication.
Valuation methods include rule of thumb, market approach, and cap rate. Each dental practice valuation method uses different factors to determine an estimated value, and one method might be better than the next based on your specific practice.