How To Get The Highest Valuation For Your Practice with Dr. Todd Russell, DDS

When you're selling your practice, you want to make sure you get the highest valuation for it. How would you make your practice valuable and how can you market yourself so you attract the right buyers for your business? Consider whether there are any other practices that could benefit from acquiring yours, and if so, how would those benefits be communicated? This week's The Dave Kittle Show episode, Dave Kittle will be joined again by Dr. Todd Russell, DDS. Dr. Russell, is the founder and CEO of Empire Dental Arts, a successful dental partnership organization based in Northeast Ohio. He is an award-winning dentist and executive leader with 30+ years’ experience driving best practices across strategic practice operations and patient care. He is adept at identifying and executing disciplined operational and business strategies across dental facilities management, clinician teams, patient care, and organizational visioning. He champions sound, disciplined management planning to elevate practice performance and patient engagement. Dr. Russell is an executive and community leader who continues to advance provider excellence and optimize practice performance. With unmatched clinical and industry experience, he masters a collaborative leadership approach to surpass provider and patient expectations and drive innovative dentistry healthcare advancements.First episode with Dr. Todd Russell:  Youtube Link: https://www.youtube.com/watch?v=8OSgcJvvJEU  Apple Podcast Link: https://podcasts.apple.com/us/podcast/dental-owners-sell-equity-to-big-group-some-stake-rolled/id1623712168?i=1000577416411  We will touch on such topics as: The owner has control of the practice valuation. The owner is in charge of determining what you will pay for your practice and what the buyer will pay for your practice. It’s important that you have a good understanding of how this process works so you can make sure you get the best possible deal for your practice. The most important thing to know is that a practice is like any other business. It has a value based on what it can produce and how much it can produce. There are three main factors that go into valuing a dental practice: 1. The cost of buying all the equipment in the office. 2. The cost of replacing the equipment over time (the replacement value) 3. The amount of revenue the surgery generates per month (the revenue stream). One of the biggest components of interacting with practice owners and understanding where they're at in terms of some exit strategy or succession plan is understanding their timeline and where they're at in terms of valuation. The dental industry is a pretty recession-proof industry, so this will help with the business valuation. If you are ready for your private practice now, the DSOs are probably your best opportunity. The last three years of your business are the most important when it comes to valuation. But if you want to increase buyers' interest, it's the recent twelve months that will help you do it. In order to incentivize the buyer to continue producing, the buyer will make an earn out offer by paying the 80% of the valuation now, and then earning the 20% by maintaining the standard that buyer bought. The seller will get an up-front to help with the transition, and then another earning to maintain the standard for quality. Create a buyout model that requires sellers to stay on after exiting the practice. Instead of just handing over their client list, they're helping us train their replacement while working alongside. P.S. Subscribe, rate, and review Here