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Evaluating Equipment Before Practice Purchase

By: Jayson Foley

Before purchasing a practice, you may want to ensure you actually get what you are paying for. A professional appraisal is recommended, delving into everything from financial and operational reports to tangible assets.

One of the largest tangible assets is probably the equipment in the practice, and the value of those assets to some extent depends on what you are willing to pay for used equipment.

Used equipment only has value to you if it's needed in your new practice. Is the equipment up-to-date and fully functional? Does it support the services you will be providing? If so, the equipment may be considered a positive asset with real value.

But if the practice you want to purchase has technology that is not compatible with your services or is out of date, then it might be considered a negative asset -- particularly if the equipment has little market value and could cost money to have it removed.

Here are three steps to consider when evaluating in-office equipment before completing a practice purchase:

Understand before initiating your practice search exactly what equipment you need in order to operate effectively in the practice.

  • Divide your list into "must-have" and "nice-to-have" equipment.
  • Get estimated costs for each item.

Consider hiring an equipment appraiser to conduct a full inventory of the available practice. Be sure the appraisal:

  • Indicates still useful equipment versus outdated items.
  • Assigns value to each piece of equipment.

Identify equipment you will keep versus items you will liquidate, and determine liquidation and replacement costs.

You can now better factor into your purchase negotiations the potential costs for updating existing equipment to bring the practice up-to-date to fully meet your needs.

About the Author

Jayson Foley is the South Central region Business Development Manager for Wells Fargo Practice Finance. Jayson helps new and established doctors navigate the transition into an ownership role or expand their current practice. He provides not only financing knowledge, but also leverages his experience and contacts in the healthcare industry to help doctors accomplish their goals. With over 12 years of industry experience, Jayson prides himself on being a resource for his doctors throughout their professional careers. Contact: jayson.l.foley@wellsfargo.com or 214-551-8785

View all articles by Jayson Foley


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The articles and materials on the Wells Fargo Practice Finance website are provided for general information only and do not constitute, nor are they intended as, a substitute for consultation with accounting, tax, legal or other professional advisors. Wells Fargo makes no representation regarding the articles available in the Strategies for Success Library or the completeness or accuracy of the information contained therein. The articles and the information contained therein may be incomplete, may contain errors or may have become out of date. Wells Fargo makes no commitment, and disclaims any duty, to update any of the articles or materials in the Strategies for Success Library.

The views expressed in the articles are those of the authors alone. They may or may not reflect the views or opinions of Wells Fargo.

Wells Fargo Practice Finance is the only practice and commercial real estate lender recommended for members of the American Dental Association.

ADA® is a registered trademark of the American Dental Association. ADA Member Advantage is a service mark of the American Dental Association. ADA Member Advantage is a program brought to you by ADA Business Enterprises, Inc., a wholly owned subsidiary of the American Dental Association.

All financing is subject to credit approval.

Wells Fargo Practice Finance is the only practice and commercial real estate lender recommended for members of the American Dental Association.

All financing is subject to credit approval.

Wells Fargo Practice Finance is the only practice and commercial real estate lender recommended for members of the American Dental Association.

All financing is subject to credit approval.

Wells Fargo Practice Finance is the only practice and commercial real estate lender recommended for members of the American Dental Association.

All financing is subject to credit approval.

Wells Fargo Practice Finance is the only practice and commercial real estate lender recommended for members of the American Dental Association.

All financing is subject to credit approval.

Wells Fargo Practice Finance is the only practice and commercial real estate lender recommended for members of the American Dental Association.

All financing is subject to credit approval.

Wells Fargo Practice Finance is the only practice and commercial real estate lender recommended for members of the American Dental Association.

All financing is subject to credit approval.

Wells Fargo Practice Finance is the only practice and commercial real estate lender recommended for members of the American Dental Association.

All financing is subject to credit approval.

Wells Fargo Practice Finance is the only practice and commercial real estate lender recommended for members of the American Dental Association.

All financing is subject to credit approval.

Wells Fargo Practice Finance is the only practice and commercial real estate lender recommended for members of the American Dental Association.

ADA® is a registered trademark of the American Dental Association. ADA Member Advantage is a service mark of the American Dental Association. ADA Member Advantage is a program brought to you by ADA Business Enterprises, Inc., a wholly owned subsidiary of the American Dental Association.

All financing is subject to credit approval.

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