What is the Value of Your Dental Practice? Tips on Setting Your Practice Value

Whether you’re transitioning out due to retirement or preparing your practice for a merger, it’s important to position your practice to be as attractive as possible to the potential buyer. Do you know the value of your dental practice? How does your practice size up in the competitive marketplace?

I’m here to get you started with some tips on setting your practice’s value. Though each situation is unique, here are some general tips to consider:

  1. Keep Up Your Numbers
    If you are planning to retire within the next year or two, it is important to keep your productionnumbers up. Maintaining or increasing the growth of your practice by continuing to market and increase new patient numbers is really beneficial when trying to sell. Though you are in the transition stage, buyers look for stable production rates to get the assurance that their investment will be worthwhile. So continue to boost up your practices marketing by improving customer service, training your staff to ask for referrals, and improving your case presentation skills. These little changes can help to increase overall production and production per hour.
  2. Reevaluate your finances
    Be prepared to provide a number of reports including tax returns, profit and loss statements, patient demographic reports, copies of lease agreements and several others- clickhere for a full checklist. Determining the value of a practice involves a variety of expense and revenue multipliers and an assessment of tangible and intangible assets, with the value of intangible assets playing a major role. Having a healthy cash flow is also critical.
  3. Strategically Plan for the Practice’s growth and sustainability 
    Location does play a role in your practice’s value. Since you are selling more than just a property, location also translates demographics and population trends. Though, in some instances, a long-established practice may be located in an area that has changed considerably over the years. Documenting the patient demographics and how they have grown as well as demonstrating how the practice has adapted as the area changed can be very useful.
  1. Developing your practice’s profile
    Your practice’s profile should demonstrate your specialties as well as your established business model. Your practices profile is created by your broker and is usually included in their service package. All buyers are required to do their duediligence on a dental practice in which they are planning to purchase, a very detailed practice profile makes the sale process go smoother and faster
  1. Determine your practice’s Philosophy
    What is your practice’s Philosophy? Are you primarily a cosmetic or restorative practice or combination? Understanding your patient base and documenting patient services will provide insight into the practice’s philosophy and how it meshes with a potential buyers’ goals. Good Will is a key intangible asset. What are some business practices that led to your practice’s success? Consider having established policies and procedures in place that demonstrate sustainable business practices that should continue after the transition. Your practice’s good will is the practice’s reputation in the community, it consists of your staff, patient loyalty and referrals.
  2. Keep your plans to sell private
    Also another factor to keep in mind, when planning to sell your practice, it is recommended to keep the sale of the practice quiet. If employees or patients become aware to early they make start leaving in search for other places of employment or another practice to get services.  Losing employees or patients which would devalue the practice and could really hurt the sale as buyers are also looking for an existing patient base on which they can build.

For more details on how these steps can be beneficial to your specific situation, contact me directly at
410-616-2042 or email me edorner@nltransitions.com. I will be happy to set up an appointment to talk with you.