curious

[San Diego Bob]

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What are some of the reasons why some dentists sell off their practice? And what does it mean when a practice is for sale that says "projected 340k in 2004 or 05" does these numbers mean cash flow or expected income annually? Because if a practice is expected to project 340k a year and the price of the office is only 150k, wouldnt that be a lost to the Dr. I am new to this forum, and just curious?
thanks in advance

 

[toothcaries]

What are some of the reasons why some dentists sell off their practice? And what does it mean when a practice is for sale that says "projected 340k in 2004 or 05" does these numbers mean cash flow or expected income annually? Because if a practice is expected to project 340k a year and the price of the office is only 150k, wouldnt that be a lost to the Dr. I am new to this forum, and just curious?
thanks in advance

practices are sold for all the same reasons any small business could be sold..

i'd assume the 340k =gross production.

concerning the price(not sure if i understand the question) but...a practice is worth whatever a buyer is willing to pay.

a good starting point for a purchace price is 60% of gross.

example..
a 400K practice in mulletville, kansas would probably sell for much less...
...while a 400k practice in orange county, Cali could easily sell for over 100-150% of gross.