The Practice Appraisal is the first step of a Practice Transition, but is also necessary for other reasons. Practice Appraisals can be performed to facilitate a Practice Listing, as well as to determine the value of a practice in advance for purposes of establishing the sales price.
We place more importance on the amount of Contracts Receivable that most appraisers. Contracts Receivable are defined as, “monies to be billed in the future, for work to be done in the future, in order to complete treatment on all current, active patients.” This is the single most important distinction in an orthodontic practice compared to other professional practices (visit our Learning Center to learn more about the importance of Contracts Receivable). An expected ratio exists between the amount of Contracts Receivable and the Fair Market Value of an orthodontic practice. In addition, the Contracts Receivable balance tells us if the Seller has pre-collected too many fees.
Our fee for the Practice Appraisal is $6,250. This includes the determination of Fair Market Value and Tax Allocation. Usually, the Appraisal is valid for six (6) months to one (1) year from the date of completion. If updates are needed in the future, we will apply a credit toward the new Appraisal fee. That credit will be equal to the original amount paid.
Note: An onsite visit is not required when performing the Practice Appraisal. If, however, you would prefer we conduct an onsite Appraisal, there is an additional fee of $5,000 plus airfare and hotel accommodations for the duration of the trip.