There is no doubt that one of the best days of our year is the day we get to speak to the students at the University of Nebraska Medical Center College of Dentistry. The culture of the school and the hospitality of our host, Dr. David Dunning, always make for a great experience. While the fact that Dr. Wolff wrote the chapter on practice valuation may contribute to the attentiveness of the students, the respect shown by the school to outside resources is exemplary. This program is one of the finest in the nation and others should take notice.
No, Dr. Wolff is not trying to sell anyone a classic car. The picture was used as a conversation starter about the concept of Subjective Valuation.
Probably nowhere is it easier to illustrate this concept than to ask various members of the class to give their dollar value of the 1957 Chevy convertible shown in the picture. Prices ranged from $30,000 to $250,000. Color and engine type made a difference as did originality. Emotion, history and sentimentality were also factors. While the current market price for such a vehicle might be in the $75-100,000 range, the student’s numbers reflected exactly what was asked; what is this car worth to you? Some were ambivalent while others thought it was iconic.
Doctors trying to sell their own dental practices (For Sale By Owner or FSBOs) frequently fall into this trap, often as a result of not having any hard data or knowledge of objective valuation methods. What their practice is worth to them may not always suit the market or lending institutions. Placing too high a price on the practice will result in disappointment as buyers turn to other opportunities while placing the value too low diminishes the value of the seller’s legacy. Ironically, while location and practice size might be deciders, properly appraised practices are seldom rejected over price. Since the Nebraska students are pretty well schooled on methods of valuation, maybe it would be a good idea to get a little objectivity into your practice transition by giving us a call for a no-charge consultation.
Steve Wolff, DDS
UMKC Class of ’77