Not Enough Information to Provide Range of Value for Dental Practice

I would appreciate it if you can help me with this.

I’m planning to place an offer on a practice, main highlights:

• Blue collar area, mainly seeing all kinds of insurance

• Overhead 60%

• Collection : 2010: 434k, 2009 :300k, 2008 :300k, main reason new owner came on board in 2010, 2011 year to 8/31 289k

• Net in 8 months 120k

• 3 employees 23/h, 23/h, 14/h

• Working 4.5 days/week
• Equipment in decent condition

What is the range for a reasonable offer?

Jason Wood:

Not enough information to help.

1. Need state-locality as this is a big driver of “value”.

2. Is there Medicaid? Are you currently a provider?

Tim Lott:

As Jason said, not enough info:

Of the past 3 years revenue can you tell us what the production was? Can you break it down between dentistry and hygiene? How many hygiene hours per week? Why the substantial increase in 2010 other than the new doc? More days? More upper end procedures? You say 4.5 days per week, which would equate to 36 hours per week usually generates well above $400k. Does the seller own the real estate? Of the 3 employees you’ve listed hours for what are their positions?

Answer these questions and you should get better answers, just not enough info yet to offer a range without having it be more of a guess.

Send your questions to Tim Lott, CPA, CVA at

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