Do Some Homework When Comparing Dental Practice Evaluators

Do Some Homework When Comparing Dental Practice Evaluators | Image Credit: © MT.Photostock - stock.adobe.com

Divorce is not a fun topic to write about, but the reality is it happens and it plays a financial role in several situations, including when parties are attempting to determine an accurate dental practice valuation.

This summer I wrote about how dental practice valuations are used for assistance in settling financial disputes during divorce proceedings. Here, we have a follow-up with advice on selecting a dental practice evaluator when the clinician is going through a divorce.

Which dental practice evaluator should the dentist hire when that dentist is involved in a divorce proceeding?

A recent case provided a lot of the information that will go into the following true story. Dental practice owners should be interested in reading about this event and learning not to make the same mistakes that the dentist in this article made. A nice-sized dental practice can have a gross income of $750,000 or more before any overhead. If well managed, this type of dental practice can have a net income available for distribution to the owner or for any advance the principal wants to make of between 35% to 40%. This amount in dollars would be between $262,500 and $300,000 before income tax.

Think about a dental practice that was managed well with gross revenue more than $750,000 and how much the net earnings would be for that dentist and the advances that would be available for him or her to make. If the dentist were to be involved in a divorce proceeding at this point in his or her career, with the gross revenue and net earnings being anywhere near these amounts, shouldn’t the dentist look for and retain the best dental practice evaluator that he or she can find?

Of course, the best many times can cost the most if one is looking at today only and not what occurs after the divorce. If the difference in the price of the evaluator is measured in terms of what the estimated savings can be compared to the price the evaluator charges, then the dentist in the divorce should consider more about getting what he or she is paying for in terms of quality and service as well as the long term effects on his or her future livelihood. The experience of the evaluator in dispute situations and the ability to express himself or herself in front of a judge or jury when the dentist is thinking about the rest of his life or her life is the key as to whom to hire.

Hopefully, divorce is a one-time event.

Unless someone who has gotten divorced decides to remarry, the first divorce will probably be the only divorce. If someone remarries and gets another divorce, that is the time for a different article. For now, we’re solely dealing with the current situation and the supposition that the divorce is a one-time thing. Prices for dental practice evaluators range all over the horizon. If the understanding by the dentist is that this proceeding will only be a one-time process, then the price of the evaluator should be considered a payment that can be amortized over a lifetime at least on a mental basis.

The evaluator will want to be paid quickly but if the dentist thinks long term, the amount to be paid should be considered as having a long lasting effect. This concept should make one lean towards the most qualified and not the cheapest. When interviewing potential evaluators to retain, a copy of their individual resume is an important bit of information to read and to review carefully.

How many articles has the dentist written that were published in national dental publications? This is important because the courts and mediators like experts who have published extensively. It lends credibility to them. How many dental practice valuations has the dentist prepared? Something to consider is that for every dental practice valuation that he or she has prepared, that evaluator has prepared a critique of the adversarial dental practice evaluator’s report as well. How many times has the evaluator testified in the courtroom? Many dental practice evaluators are fine with getting the details and preparing a dental practice valuation, but they will not testify in the court room. They don’t like being screamed at by opposing attorneys or being cross examined in an adversarial way by their own attorney. This is a reflection of the believability of the evaluator’s report. It’s as if the report is being belittled because of the weakness of the evaluator’s testimony. It is so important that once interviews are arranged with a few dental practice evaluators, many of these questions are asked of him or her. With a lack of strong acceptable answers, those evaluators who seemed weak in their responses should be eliminated from the search.

Who is finally chosen by the dentist to evaluate the dental practice and what evidence of the evaluator is used to secure the feeling of the dentist that he or she is choosing the best evaluator?

The current situation and valuation report for the dentist and the dental practice evaluator will have ramifications for years to come. This is an unfortunate outcome of the job that the evaluator will do. The valuation and the presentation in the courtroom or in front of the mediator also effect the evaluator and his or her future referrals in the same geographic market place as the current valuation and presentation are occurring. This is why the evaluator and the dentist who is selecting this person should be so careful as to the evaluator’s qualifications.

The cost is important but not as much so if the long term effects of the divorce are what is intended to be wary of when making the decision of whom the evaluator should be. Another important consideration is the speed at which the information in the report is remitted to the dentist and to any advisor that the dentist may have. A good turnaround time once the evaluator receives the data so that he or she has he information to prepare the report is somewhere between 2 to 3 weeks. This is important when considering that until the evaluator receives the data, there is not much that can be done to begin working on the report. That part of the job is up to the dentist and his or her advisors to complete.

For more columns from the author, visit https://www.dentalproductsreport.com/practice-management.