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Do I Need a Dental Practice Valuation?

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The question of “do I need a dental practice appraisal” often comes up when working with clients. The simple answer is yes. Here are a few of the instances where practice owners would need an accurate dental appraisal or valuation:

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• Selling a Dental Practice

• Buying a Dental Practice

• Hiring Dental Associates

• Navigating a Merger

• Taking on a Partner

• Entering into Litigation

• Estate Planning

• Securing a Letter of Instruction

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In each of these situations, it’s critical to have an up-to-date assessment of the current market value of the dental practice, though for different reasons. It’s recommended that all practice owners value their practice every year. 

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What is a Dental Practice Valuation?

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A dental practice appraisal (or practice valuation) is a formal opinion prepared by a dental broker that states the practice’s market value based on all the pertinent information about the subject. An accurate appraisal is key when selling or buying a dental practice, but can also be helpful in several other instances.

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What goes into valuing a dental practice?

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There are many factors that make up a comprehensive valuation, including:

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• Gross income

• Net income

• What type of insurance and/or payment is accepted (e.g., PPO, HMO and Medicaid insurance participation)

• Total number of active patients

• Number of new patients a month

• Specialties and procedures done in-house

• Patient and area demographics

• Market issues

• The practice’s goodwill

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The above list is far from comprehensive. All dental practice valuations should include a written report and must be based on all the relevant information and not just selective pieces. This includes both tangible and intangible aspects of the practice.

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We do the work so you can make the best decision when you want to buy.