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What Is My Dental Practice Worth?

What Is My Dental Practice Worth?

After careful consideration, you’ve decided that it’s time to sell your practice. The first step is to determine what your dental practice is worth. 

No formula exists to determine the exact value of your practice since many factors going into the evaluation are subjective. However, we will outline a few valuation methods that work for most practices:

Determine Your Assets

To determine a fair market value for your dental practice, you need to compile a list of your assets. Your valuation can be based on the book value of an asset, its original cost or its current appraised value. This type of valuation takes into account the unique features of your practice.

Compare to Market Data

A market comparison may be a more conclusive method for determining the value of your dental practice. You will want to identify similar practices that have recently sold in your area. Using a system of ratios, you can determine a ballpark selling price. The ratios involved in this method include ratios of sales price to annual net profits, discretionary cash flow and annual revenues. 

Look at Your Income

The third type of valuation is perhaps the most popular because it is based on income. This valuation method identifies your predicted future cash flow and earnings evaluations. Based on an actual revenue stream, this method offers a price that a buyer will likely be willing to pay for your dental practice. 

Menlo Dental Transitions firmly believes that every dentist deserves fair compensation for the hard work that went into building their practices. Our Menlo Certified Valuation Analysts™ utilize a variety of evaluation techniques and will work with you to secure the best price for your practice. Contact us today to start the appraisal process.

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