Three Ways to get a Dental Practice Valuation

Dental Practice Valuation and medical practice valuation are two of the most “Googled” terms in the practice transition space. 

When someone is searching for dental practice valuation, they’re often looking for either 

While your goals as a seller ultimately determine what you need to get a valuation, either CPAs or dental practice transitions brokers can evaluate a practice. 

Practice Transitions Group has three valuation offerings for dentists at each stage of the transition process. 

  1. Practice Valuation Calculator
    Who it’s for
    : Casual Seller

    What you need: High-level financials, like 
    • Approximate yearly revenue
    • Revenue trend (is your business growing or declining?)
    • Percent of hygiene

      How it works:  With our practice valuation calculator, you can get a ballpark valuation, or price, for your practice.  Remember, this is just a range, but the range offers clarity to doctors beginning to explore selling their practice or partnering with an operator.  

      What happens next:  After a dentist submits high-level information through the dental practice valuation calculator,  the results are emailed directly to their inbox.  A broker will follow up in case the dentist is interested in learning about next steps.  Practice Transitions Group tends to leave the conversation in the dentists’ hands at this point.  Oftentimes dentists will just be interested in the number but less serious about taking next steps.
  2. First Look or Broker’s Opinion of Value

    Who it’s for: Curious Seller, Open to feedback

    What you need:  12 months of financials

    How it works: During a first look, you submit one year of financials and production reports.  Our underwriting team, including a former practice manager and CPA, runs the reports through the rigorous underwriting process that we offer to exclusive clients. 

    After digging into this year of reports, a lead broker offers a general appraised value of the practice. In addition, the broker makes a custom action plan with action steps you can take to get a higher valuation. 

    Oftentimes, dentists want the highest price they can earn. With our custom action plan, dentists have the choice to work on their practice in specific ways that we have found actually get them the most bang for their buck (vs what one might assume, like new equipment for example).  

    What happens next:  After a dentist submits reports for a first look, a lead broker will review the valuation with the client and let them know, based on what their needs are, if we’re the right brokerage /a good fit to move forward.  

    If a dentist is open to feedback to take steps to get more money for their practice and we believe that by taking more time they can do that, we develop a customized action plan.  The conversation sounds like, 

    Hey, based on what you’ve told us, and where you want to get valuation wise, here are the three things you need to build your practice up in order to get that return.

    Our lead broker Nate Thompson speaks on what’s happened since PTG started offering a First Look. “I’ve done more and more first looks,” he said. “Before bringing somebody on it’s a good goal setter for everyone.  The doctor gets a transparent evaluation of the practice and exactly what they need to do for the exact return they want.  It’s a win-win and it’s free to the client.  I’m not sure we offer a better service, except, of course, the eventual return we get them when we sell their practice for more than they thought possible.”
  3. Dental Practice Valuation

Who it’s for: Confident Seller 

How it works:  PTG dives into financials with at least three years of reporting and determines a broker’s opinion of value.  Based on the client’s feedback, this number will become the dental practice valuation that determines the price tag for the practice in the market.  What you need:  At least 3 years of financials

What happens next:  The underwriting team will then produce a Practice Information Report and Financial Recast and review the reports with you and the brokers and answer any final questions.  Then, the marketing team will draft a Confidential Information Memorandum (CIM), a document summarizing your practice information.  The CIM will be what buyers see first when they inquire about your practice.  

In summary

A valuation is a way to put a price tag on a practice with the market in mind, and Practice Transitions Group offers multiple options depending on how close you are to actually listing your practice.

Curious about where valuation fits into the larger transitions process? Download our Proven Process map.

Candice DePrang Boehm

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