Practice Orbit Estimate

What is a Practice Orbit Estimate

The Orbit Estimate is an estimate of the value of your dental practice.

We give you three options for the Orbit Estimate: Level 1 and Level 2. Each estimate is provided as a range, and the value of your practice likely falls within this range.

For us to calculate your Orbit Estimate we need information about your practice. Each subsequent level requires more information, which allows us to calculate a more accurate estimate and narrow the range.

Additionally, you may want to know how much of the sales price you’ll retain after selling costs, paying off outstanding debt, and remitting taxes relating to the sale (i.e., how much is left?). With only a few items of information, we can estimate, with some confidence, that amount for you.

Here’s an overview of the information needed for each Orbit Estimate level:

• Level 1 Estimate: Specialty, Collections, and State
• Level 2 Estimate: Tax Information

Level 1 Estimate

The Level 1 estimate requires just two pieces of information: your dental specialty and annual collections. From this we use industry averages to give you a range for the worth of your practice. As we know very little about the details of your practice, this range is accurate to (+ or -) 40% above and below the calculated estimate.

The Level 1 estimate uses just three fields

• Specialty (E.g. GP, Orthodontist, Pediatric Dentist, etc.)
• Annual Collections: Most recent full year. Alternatively, if you have financial data for 6 months or more of the current year, you can annualize the current year by dividing your collections through the end of the most recent month by the number of months of collection data. For example, if its September and your collections through August were $900,000, you would annualize the collections as follows: $900,000 divided by 8 times 12. (i.e., $1,350,000).
  NOTE, most valuations use your past three years of collection data. If the prior two years are very different than the collections of the most recent year, the Orbit Estimate will not be as reliable.
• State in which your practice resides

This Level One Estimate is accurate to (+ or -) 40%.

Level 2 Estimate

The level 2 estimate adds information from your dental practice the IRS tax form. First, we ask what type of tax entity you use for your practice, then we tell you exactly whit lines from your tax form to input. This additional information increases the accuracy of your estimate to (+ or -) 20% above and below the calculated estimate.

The Level 2 estimate adds information from your most recent business tax statement. Exactly what you input depends on the type of taxable entity you use for your practice. Below are the most common returns for dental practice owners.

Review your tax return to obtain the input data below.

Net Proceeds

After calculating your Level 2 and Level 3 Estimates, we give you the option to input two more pieces of information and we’ll estimate your net proceeds; i.e. how much of the sale price you’ll keep after debt, taxes, and selling costs.

To (1) determine your net proceeds on sale and (2) to enable you retain input data on our site, and not have to re-enter it, we ask you to create an account. Please use a valid email address.

Once you’ve done that, we then ask you to input:

• Practice debt at the time of sale.
• If you will use a broker? Yes / No

Key Assumptions:

1. Asset Sale, not a Stock Sale. Seller retains and pays off own debt with sale proceeds.
2. Price allocation of 20% to equipment and 80% to goodwill
3. Fed capital gains tax rate of 20%. State rate is based on state selection.
4. Tax basis of 20% of equipment price allocation
5. 1% selling costs (legal/accounting/escrow)

If this Net Proceeds are accurate to (+ or -) 20%.