fbpx

What is the Value of Your Dental Practice?

Determining the true value of a dental practice is an art and science involving various practical considerations.  This is really not much different than that of financial planning, mixing art plus evidence based science.

One would be hard-pressedto find a subject more confusing than that of dental practice valuation.  Written appraisal reports include a standard disclaimer that states there is no single standard methodology used to value dental practices.  So how do we value a dental practice if their is not set standard or “right way”?

I break down the two main valuation methods as “Academic” and “What really happens”.  The academic approach is what you generally see in school taught lecture halls.  It includes various scientific formulas, long equations and court tested reasoning. The most popular formulas include “percentage of gross collections,” “multiplier of net income,” and the complex “discounted present value of perpetuity formula.”

Let’s discuss the “What Actually Happens”. In any type of buy/sell situation, the true value of anything is determined by what a ready, willing, and able buyer will pay for something in the marketplace.  (I think I took that last sentence straight from one of my textbooks in a college class on real estate.)  Dental practices are much different than your home buying process, there is no multiple listing service (MLS) or central database of dental practices that have been sold.  Some brokers might have a very limited amount of information, but that can not be reasonably relied on.

“How much can I sale my practice for?” It’s a simple question, but in reality, dental practice values are very volatile and value depends on a multitude of factors. The most well-known “rough rule of thumb” valuation calculation is to apply a percentage (e.g., 70%-85%) of the previous year’s collections. But this serves as only a rough starting point in the valuation process.

Dental practices are never identical, and one cannot be substituted or replaced for another in the same manner that other goods can. Each dental practice is unique and has a plethora of differentiating factors that must be subjectively (Art process) quantified in order to accurately determine its true value.

Fortunately, most of the time, the numbers do not go down or stay flat for buyers; they actually go up! Dental practice buyers are typically much younger than sellers these days, and they are performing a wider range of procedures in-house rather than referring those procedures to specialists.  Because the younger dentist is usually more tech savvy and more in-tuned with social media this helps the growth exponentially.

There are many other factors that must also be considered, such as location, equipment, appearance, staff, reputation, patient mix, procedures performed, and many more.  The likelihood of the production and profitability continuing for the buyer is actually more important than the current numbers.

If you are in the market to sell your practice or buy a new practice we should talk.  We have software that can plug into the new practice’s accounting system that can dissect if this would be a good investment or not from the science side, and if it looks good we can then discuss the subjective side (Art) of the sell/buy.

35 Comments

  • Smile Professional

    This web site is really a walk-through for all of the info you wanted about this and didnt know who to ask. Glimpse here, and youll definitely discover it.

    https://www.zmz-gundelfingen.de/leistungen-smile-professionals-prophylaxe.html

  • Google

    The time to study or stop by the content or internet sites we have linked to beneath.

  • Don Juravin

    […]Here is an excellent Weblog You may Come across Intriguing that we Encourage You[…]

  • Healthy salty snacks

    […]we came across a cool web site that you just may possibly take pleasure in. Take a search in case you want[…]

  • vibrator

    […]Every once in a although we pick out blogs that we read. Listed beneath would be the newest web sites that we choose […]

  • Skyline University Nigeria

    Explore electronic resources for free, thousands of eBooks, accounting eBooks, business eBooks, Marketing eBooks, Accounting eBooks, Banking eBooks, Design eBooks, Customers eBooks, Travel and Tourism eBooks… and more

  • bedroom bondage toys

    […]very couple of internet websites that happen to become in depth beneath, from our point of view are undoubtedly very well worth checking out[…]

  • اجمل سكس اخوات

    […]Here is a great Weblog You may Discover Intriguing that we Encourage You[…]

  • langley appliance repair (604) 404-1677

    […]very few internet websites that transpire to be comprehensive below, from our point of view are undoubtedly effectively really worth checking out[…]

  • adam’s true feel dildo

    […]Wonderful story, reckoned we could combine some unrelated information, nevertheless genuinely really worth taking a search, whoa did one particular study about Mid East has got extra problerms also […]

  • womens sex toys

    […]Here is a superb Blog You may Come across Intriguing that we Encourage You[…]

  • best sex toys for clit

    […]very few internet sites that transpire to be comprehensive beneath, from our point of view are undoubtedly very well really worth checking out[…]

  • judi uang asli

    […]Every once in a though we select blogs that we study. Listed below would be the latest websites that we select […]

  • Event transportation

    […]just beneath, are numerous completely not associated web sites to ours, having said that, they may be certainly worth going over[…]

  • vibrator

    […]although sites we backlink to below are considerably not associated to ours, we really feel they may be essentially worth a go through, so have a look[…]

  • Google

    Below you’ll obtain the link to some internet sites that we believe you must visit.

  • legit hacking

    singularity offers premium & free undetected csgo cheats with predefined configs that are updated frequently with 24/7 support.

  • AOL Mail Login

    […]always a large fan of linking to bloggers that I appreciate but do not get a whole lot of link like from[…]

  • 15% minoxidil buy

    […]here are some links to websites that we link to due to the fact we consider they may be really worth visiting[…]

  • porn free

    […]the time to study or check out the content material or web-sites we have linked to below the[…]

  • seo consulting pricing

    […]Sites of interest we’ve a link to[…]

  • Philadelphia Elibrary

    Explore electronic resources for free, thousands of eBooks, accounting eBooks, business eBooks, Marketing eBooks, Accounting eBooks, Banking eBooks, Design eBooks, Customers eBooks, Travel and Tourism eBooks… and more

  • jockstrap brief

    […]we came across a cool internet site that you might appreciate. Take a appear if you want[…]

  • best pocket stroker

    […]please visit the websites we stick to, such as this 1, because it represents our picks from the web[…]

  • döne online bestellen hamburg

    […]check below, are some totally unrelated sites to ours, having said that, they are most trustworthy sources that we use[…]

  • seashell necklace

    […]Every after inside a whilst we select blogs that we study. Listed below are the most up-to-date websites that we opt for […]

  • best gay sex toys

    […]just beneath, are various totally not connected sites to ours, even so, they may be certainly really worth going over[…]

  • Sektion 12 Copenhagen

    […]The information mentioned within the report are some of the best available […]

  • pocket pussy unboxing

    […]just beneath, are a lot of entirely not associated web pages to ours, nonetheless, they’re surely really worth going over[…]

  • ایرانی پورن

    […]that will be the finish of this post. Here you will find some web sites that we consider you’ll appreciate, just click the hyperlinks over[…]

  • free xxx

    […]check beneath, are some entirely unrelated internet websites to ours, on the other hand, they are most trustworthy sources that we use[…]

  • adam male toys

    […]The facts talked about inside the post are some of the most beneficial offered […]

  • mp3 download

    […]Sites of interest we’ve a link to[…]

  • d’Alembert Roulette Strategy

    […]we came across a cool web-site which you may possibly get pleasure from. Take a appear for those who want[…]

  • Baccarat Strategy PDF

    […]that would be the end of this write-up. Right here you will obtain some websites that we think you will value, just click the links over[…]

leave your comment

BACK TO TOP