Business valuation is important when you are forming a buy sell agreement. If you have your own professional practice like a dentist office you will want to consider having a buy sell agreement in place with a like professional.

In this case it would be a dentist with his own office who you will want to make the agreement with. The reason you want this type of agreement is for the sake of your family. If you have a thriving practice and you suddenly and unexpectedly die then your family will suffer.

This is because your dental practice will lose business each day after your death. The time your family or your estate attorney can arrange for a new dentist to take over your practice your office will have lost a lot of patients.

People with dental needs will not want to wait around for a new dentist. They will find another dentist to fix their teeth. But if you make an arrangement with another dentist in the form of a buy sell agreement then your family will get the value of your business upon your death.

You will need a professional appraisal of your practice. The next thing is to have another dentist take out a policy on your life according to what your practice is appraised at. Then if you die he will have the proceeds to buy your practice from your family.

Of course the agreement is a two way street. You also have an insurance policy on his life so you will buy his practice from his family in case of his untimely death. So he will also have to have an appraisal of his practice so you will know how much to insure his life for. This is one area where business valuation is needed.