Three Factors Within Your Control That Can Hurt Your Dental Practice’s Value

Many factors affect the value of your dental practice, some of which lie beyond your direct control, such as current economic conditions. However, several factors are well within your realm of influence. Here are three factors within your control that can hurt your dental practice’s value.

Your Personal Performance

Too many practice owners, particularly those at the beginning of their careers, work long hours and burn themselves out. Prioritizing self-care through a balanced diet and adequate rest is crucial. Your health is one of your greatest assets that directly impacts your practice’s success.

Additionally, you can strive to improve your skill set and expand your range of procedures through further education. Greater efficiency leads to greater success. By increasing your clinical expertise, you can reduce the need to refer out high-revenue cases, which can significantly impact your practice’s growth.

Your Finances

Mismanagement of your finances can negatively influence your practice’s valuation. Exercising control of essential expenses is crucial. Areas that warrant careful attention include:

• Payroll and benefits
• Rent and occupancy costs
• Marketing and promotional activities
• Office-related expenses
• IT infrastructure and software
• Dental supplies
• Laboratory work

An in-depth practice appraisal can offer insights into where you might be overspending or underspending compared to practices of a similar nature. 

Your Building

If you lease your office space, be sure to hire an experienced commercial real estate broker to advocate for your interests. You will likely be leaving money on the table if you try to negotiate a lease or renewal on your own. 

Efficient use of your workspace is equally important to maximize production capacity. Consider a practice with seven operatories where only three are effectively utilized. In this example, rent might appear disproportionately high in relation to revenue. Effective resource utilization is pivotal to safeguarding your practice’s value.

Valuations are intricately linked to your financial performance, and multiple factors have a direct impact on your practice’s production. Don’t wait too long to find out how much you’re worth.

Menlo Dental Transitions has two dental-specialized Certified Valuation Analysts. Contact us today to get started on your practice appraisal.