Agreement for Sale of Dental and Orthodontic Practice
Definition and meaning
The Agreement for Sale of Dental and Orthodontic Practice is a legal document that outlines the terms and conditions under which a dental or orthodontic practice is sold.
This agreement typically includes details such as the sale price, the assets included in the sale, and the obligations of both the seller and the purchaser. It ensures that the transaction complies with state laws and protects both parties' interests.
How to complete a form
Completing the Agreement for Sale of Dental and Orthodontic Practice involves several important steps:
- Provide basic information: Fill in the names and addresses of both the Seller and the Purchaser.
- Specify the sale price: Clearly state the agreed-upon price for the practice and breakdown the payment into categories like equipment, goodwill, and accounts receivable.
- Detail the assets: List all tangible and intangible assets included in the sale.
- Outline obligations: Describe any post-sale obligations of the seller, such as consulting for a specific period.
- Sign and date: Both parties must sign the agreement to make it legally binding.
Key components of the form
The Agreement for Sale of Dental and Orthodontic Practice includes several critical components:
- Identification of parties: Clearly identifies the Seller and the Purchaser.
- Sale Description: Details regarding what is being sold, including equipment, inventory, and intellectual property.
- Payment Terms: Stipulates how and when the payment will be made.
- Post-Sale Responsibilities: Defines any obligations the seller has after the sale.
- Confidentiality and Non-Compete Clauses: May include restrictions on the seller competing with the new practice for a specified time.
Benefits of using this form online
Utilizing an online form for the Agreement for Sale of Dental and Orthodontic Practice provides several advantages:
- Accessibility: Users can access the form anytime and anywhere, making it convenient to fill out.
- Expert Guidance: Online platforms often provide step-by-step instructions and tips to ensure completion.
- Cost-Effective: Acquiring a downloadable template is often less expensive than hiring an attorney.
- Time-Saving: Reduces the time spent on paperwork as users can fill out the form at their own pace.
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FAQ
The average American dentist's overhead is 73 percent. The lab expense is 8 percent and staff overhead is 30 percent. The average dentist's actions demonstrate a willingness to be "everything to everybody"and that dentist is paying dearly for this lack of vision.
Average fair market value to collections looks at the sales price relative to the amount of annual revenue, usually over the last 1-3 years. For example, if an oral surgery practice is collecting $1,000,000 sold for an average of 68.57%, the sales price would be $685,700.
Cross out all expense accounts related to owners and doctors. Add up the remaining expense accounts together. Divide the amount from step two against your total income then multiply by 100 for the percentage.
According to ada.org, the average net salary for dental practice owners in the US in 2018 was $197.2k for general dentists and $330.2k for specialist dentists. Ziprecruiter.com states that the average is slightly lower at $178.6k for a dentist running a private practice, with highs of $366.5k and lows of $25.5k.
In a business that is performing well, an overhead percentage that does not exceed 35% of total revenue is considered favourable. In small or growing firms, the overhead percentage is usually the critical figure that is of concern.
According to the Survey of Dental Practice, the average net income for dentists in private practice in 2019 was $204,710 for general dentists and $343,410 for specialists. The U.S. Bureau of Labor Statistics estimates the average annual income for general dentists is $180,830.
For dental practices, every cost not associated with dentist income is considered overhead, including employee compensation, rent or mortgage, supplies, equipment, and utilities.
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The profit margin of the dental practice you're considering should be at least 40%. A 40% profit margin (or 60% overhead) is close to the average profitability of dental practices in the US. If the practice you're looking at is below that number, it could be a sign the practice isn't as well run as it should be.