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Factors that Affect Your Dental Practice Valuation

Dentures On Money How To Sell My Dental Practice | US Dental TransitionsMany questions arise when asking yourself, “How do I sell my dental practice?” You’re worried about finding a buyer that will preserve what you’ve built, how to transition your staff and patients, and what your future looks like after the sale.  

Perhaps one of the most important questions you need to ask before the selling process begins is, “How much is my practice worth?” In most cases, you’re transitioning into a new career or retirement, and every penny counts. Here are some of the most prominent factors to consider when valuating your practice. 

Economic Variables  

One of the more obvious steps in appraising your office is comparing your costs and amenities with other practices. You need to consider the age of your equipment, profitability, and salary expenses. 

Recent graduates make up a large percentage of the buyer base for a new practice. Most of these young potential buyers have been trained on modern, state-of-the-art equipment. The older your equipment is, the lesser the value. 

You can be one of the busiest practices in your area, but if your overhead is eating up all your profitability, it will negatively impact your sale price. One of the largest portions of your overhead will be employee salaries. 

While it is important to have a good staff, you need to maintain a balance with your operating cost and revenue. Dental education is an expensive endeavor. A profitable practice will allow your buyer to feel comfortable attaining an acquisition loan while also maintaining a comfortable salary. This assurance will greatly increase your office’s value. 

Understanding Your Location 

Unfortunately, the market value of practices is inconsistent across the country and sometimes even from city to city. However, understanding the market in your area is one of the most important factors in evaluating your practice. 

In highly populated areas, practices can sell for multiples of 90 to 100 percent of the previous year’s gross revenue, but in less populated areas, identical practices could go for as little as the 40 percent mark. Researching these numbers in your area is crucial to finding an appropriate value for your office. 

Patient Base 

Assessing your patient base isn’t as simple as, “I have ‘x’ number of patients.” There are numerous patient statistics that contribute to the worth of your practice. In addition to your total number of patients, you also need to consider the rate at which you are acquiring new patients, your retention percentage, and the average age of your clientele. A practice frequently growing with young, new patients is more valuable than an office that is surviving off the same customers they’ve had for a decade. 

Don’t let the anxiety of not getting enough for your practice ruin one of the most exciting times of your professional career. Consider all the factors that contribute to your office’s value and get the price you deserve.  

If you need any assistance in evaluating your practice, U.S. Dental Transitions has helped thousands of practices transition from one owner to another. Get peace of mind that your handing off your legacy, and that it’s in good hands. With over 25 years of experience, we’re confident can connect you with the perfect buyer for your selling criteria.  

Contact us at 678-482-7305 or info@goUSDT.com. Any information we share will be kept in the utmost confidence.

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