We believe determining the value of a practice during a sale is very important. Because of this, we provide a free appraisal valuing a dental practice for both parties.
So what’s your practice worth? If you were to sell your dental practice today, what would you get? That is a complex question, and it must be carefully evaluated. Every practice is unique. Using one outdated formula or rule to determine the practice value can set you up for a costly mistake.
There are several factors that influence practice value, such as location, equipment, financial history, staffing, debt service etc. Obviously, if a practice is near an urban area with a larger patient base and strong cash flow, this value will be higher by 65%-80%. If another practice has similar metrics, but is in a smaller rural community, then it might sell for 5% to 15% less. Regardless of the location and metrics of the practice, a very strong cash flow will adjust the worth upwards every time and attract buyers to every corner of Ohio.
One thing is for certain in todays market. An increase in the bottom line directly correlates with increased practice values. Buyers are looking for, and the banks are funding, practices all over Ohio that generate enough cash flow to service the debt and make the new dentist a good living.
When valuing a dental practice is done correctly, the document:
- Promotes an understanding of how value is created and maintained
- Helps position the practice for an eventual sale
- Encourages the owning dentist to plan ahead to keep the value strong
- Encourages the owner to examine and maintain a strong net cash flow
- Justifies the purchase price to a prospective buyer
In a nutshell, a good estimate can bring a buyer and seller to closing without delay. It can prevent interruption from banks and advisors. At TransitionOne, understanding the dental market and participating in practice sales each and every month is absolutely critical for correct numbers provided to both parties.
Whether the practice is for sale or not, an estimate of value is important for retirement planning, partner buy-in, or a measure of overall success.