Why You Need an Up-To-Date Dental Practice Valuation
One of the most common mistakes practice owners make is not getting a practice dental valuation early. Many practice owners put off getting a practice valuation, not realizing how important it is to plan for the future as well as for unexpected life events. At a minimum, you should acquire a practice valuation at least five years prior to selling or bringing on an associate or partner.
Whether you’re planning for retirement, bringing on a partner, considering a sale, or simply want to understand your financial standing, getting a professional dental practice valuation is a crucial first step. In this article, we’ll explore the top 10 reasons why a dental practice valuation is not only beneficial but essential.
Top 10 Reasons for a Dental Practice Valuation
A valuation provides more than just a number — it gives you insight into the health and growth potential of your practice, helps with strategic planning, and ensures you’re prepared for whatever the future holds.
Here are the top 10 reasons why you should get a dental practice valuation:
1. Transition Planning
To ensure a smooth and successful sale of your practice, it is critical to develop a plan of action five to ten years before you plan to retire or sell. Obtaining a valuation is the first step to creating a transition plan.
2. Financial Planning
Determine the right time to sell and the implications of how the sale will support your retirement goals.
3. Maximize Practice Value
Take regular performance measurements and identify ways to increase profitability to receive top dollar when the time is right to sell.
4. Emergency Exit Strategy
Protect the equity in your practice should you suffer a disability or untimely death. A current valuation can make all the difference in helping your family.
5. DSO Assessment
Determine if your practice is a good fit for a DSO affiliation, and if selling to a DSO is the best pathway for you to maximize your sales price.
6. Detect Deal-Killers
Even the most profitable practices can have some element of ‘clean-up’ to address, but some issues can result in killing the sale.
7. Associate/Partner Addition
If hiring an associate or adding a partner is in your plan, determine if your practice will support two dentists and how it will affect your bottom line.
8. Tax Planning
Selling your practice at top dollar is important, but you should also consider the tax consequences and how to maximize your net proceeds.
9. Bank Financing
Having an accurate valuation completed by a reputable broker will help ensure that a lender will accept the sales price and provide the buyer with 100% financing.
10. Establish Asking Price
Acquiring a valuation will help you set a realistic asking price that is neither too high for buyers nor too low, which leaves money on the table.
Know Your Practice’s Worth
Dental practice valuations are a vital step in supporting informed decision-making at every stage of your professional journey. Whether you’re navigating a transition, preparing for growth, or simply ensuring your practice is on solid financial ground, understanding its true value can provide clarity, confidence, and control over your future.
Thinking about the true value of your dental practice? Get a free dental practice valuation and know how much your practice is worth.
