Understanding The Value Of Your Dental Practice

1. Understanding The Value Of Your Dental Practice

2. If you’re contemplating selling your dental practice, you may be struggling to understand its true value, especially if you’ve worked hard for years to establish and maintain it. But understanding the value of your dental practice isn’t just useful for those wanting to sell up and move on; it’s a sensible move for any dental practitioner wanting to make financial decisions that are informed, make retirement plans, or check their progress. To understand what your practice is truly worth, dental accounting services can help you understand what creates long-term value: • Clean financials

3. Such things as inconsistent reporting or cluttered profit-and-loss statements, makes isolating your practices true profitability, very challenging. By working with a dental accountant, you can get your financials in order and give buyers more confidence in what they’re looking at. • Location and local trends Where your practice is situated is quite important. With a population that’s growing, less competition, and a high demand for dental services, the location of your practice could drive up the valuation significantly. • Sound operational systems

4. If your practice has procedures that are well-documented, and a stable workforce who are loyal and highly trained, it may automatically become more appealing to potential buyers. • Mixed revenue and scope of service Diversification of services and a lack of dependence on just one doctor or referral partner, can help garner a more favorable valuation for dental practices. • Quality of facility and equipment

5. If your practice contains equipment that is both digital and well-maintained, it would be easier for a buyer to make the transition. With no expensive upgrades needed from the get-go, buyers typically place more value on a new, clean and efficient space, than on one that requires an investment of significant capital. Other factors to consider when valuing your dental practice In a broader context, the economy always has a role to play in practice valuations. With high rates of interest, banks and other lenders are being more selective, and for individual buyers, this often translates to monthly payments that are higher on acquisition loans.

6. If your practice fits their criteria, dental support organizations may be able to move quicker than individual buyers, but timing also counts. As more dentists reach the age of retirement, practice numbers on the market are increasing, boosting competition. The ideal time to look into your valuation is before you’re ready to sell; this level of proactiveness helps you get your practice ready so that you’re in a stronger position to negotiate. A true valuation

7. A true valuation of your dental practice takes an experienced eye from someone involved in the industry, such as specialist accountants for dentists. They will evaluate your entire practice strategically, looking at market trends and your own, long-term goals. Knowing the value of your dental practice is about so much more than you simply transitioning to the next phase of your life; it can be helpful in terms of retirement, exploring merger options, buying out a partner, or simply understanding the financial health of your business. Finding out what your dental practice is worth is a good step to take when trying to protect what you’ve worked so hard to build up.