Post Pandemic Dental Practice Sales in 2021 and Beyond
Thank god 2020 is behind us, but is it? When selling your business, the banks and CPA’s like to take a snapshot of the last three years of gross revenues when doing their valuations. Maybe 2020 was on par with the prior years but probably not considering you were ordered to close for some period of time. By example, lets say 2018 was $1,000,000 (Rev), 2019 was $1,000,000 (Rev) and 2020 was $750,000 (Rev). That makes the three year average sales of $916,666 (Rev). Assuming a value of 85% of gross sales that results in a valuation of $779,166 instead of $850,000 if 2020 had been normal . In addition, banks are being very particular about 2020 operations when preparing valuations. They are looking very carefully to see that volume of sales moved in an upward direction after you opened your office. Everyone knows sales were most likely declining but if the numbers were not moving in the right direction it could make a 2021 sale difficult.
2021 Covid-19 Restrictions and Dental Practice Sales
Is 2021 a good time to position your practice to sell on the open market? The simple answer is, maybe? How long are you going to practice COVID-19 dentistry? Are you tired of having patients wait in their car until you call them to come in to your office? Are you having to wear gloves, shields and additional PPE? Remember how uncomfortable it was wearing all of that PPE last summer? First and foremost, are you healthy? Are you at risk by practicing dentistry during a pandemic? Will there be buyers out there during these trying times? The other consideration is the duration on the virus and how it will continue to impact the practice of dentistry. The vaccine process has started and optimistically will lead to an eventual end but how long?
When starting to consider the process, we can help you evaluate all of your options.
Please call Charles Feitel at 301.365.6940 or email him at email@example.com to schedule your free consultation. We will help you navigate these “interesting” times!