Gary KadiHelping Dentists Build Profitable Practices That Deliver Time Freedom, Clarity, and Sustainable Growth

WTF is EBITDA and what does it mean for your practice?

Name: WTF is EBITDA and what does it mean for your practice?
Uploaded: 2024-07-26T22:52:19+00:00
Duration: 40 s
Channel: Gary Kadi
Description: Gary Kadi breaks down EBITDA for selling a practice: buyers add back owner write-offs and one-time costs you won't have anymore, but they'll dock the…

26 Jul 2024 · 1 min

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Gary Kadi breaks down EBITDA for selling a practice: buyers add back owner write-offs and one-time costs you won't have anymore, but they'll dock the valuation if the business depends entirely on you. Pay yourself a real salary and build a practice that runs without you if you want it to sell.

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EBITDA is a term that basically takes out things that you write off. You might be running things through your business that your CPA allows and is appropriate, but the buyer is not going to have that expense once he or she buys this. So you can add that into your ebitda. The difference between running a practice as a lifestyle to packaging it for sale. If it's reliant solely on you, the value of your practice goes down, or it's not even saleable. You know, now that it's ebitda, you're going to get charged back because they got to put in the cost of replacing you. So you'll get docked your profit if you're not putting the appropriate amount and paying yourself a salary.