You may speculate the value of your dental practice in today’s market, but only a formal appraisal can tell you for certain. Appraisals are usually performed when dentists are getting ready to move to another location or preparing to retire. A proper valuation by Schiff Dental Brokerage can ensure you get the best value for your practice.

Why are Appraisals Important? A proper appraisal is required to increase the chances of a fair sale, but it doesn’t just focus on tangibles and formulas; it is more individualized. Focusing entirely on what is tangible in the practice and following general guidelines can lead to practices being under- or overvalued. A generalized approach to an appraisal may actually minimize the values of the building, equipment, and furniture. A proper appraisal emphasizes the overall value of the practice, including intangible assets like the patient base and reputation. Dental brokers know how to take all important factors into account, which leads to more accurate valuations.

Avoid “Rules of Thumb”

An accurate dental practice appraisal is not simple or done by rote. Following general guidelines of valuation, such as gross income, net earnings, or inventory will usually result in appraisals lower than the actual value of the practice.

To illustrate this, consider the general rule that a practice’s value is equivalent to its gross income. Imagine two different practices that have the same gross income. One provides low-cost services to a large patient base, and the other provides high-cost, specialized services to a smaller clientele. An experienced dental broker would not automatically value them using the same benchmarks. The high-cost practice likely has a better location, better equipment, and a better-trained team.

Factors That Affect Appraisal

Dental brokers examine far more than just income and earnings to appraise a dental practice, they will consider a large number of factors, including:

The type of practice. A specialized practice, like an orthodontist or endodontist, is valued much differently than a general dentist.

Dental practice location. Much value can be added to the practice’s appraisal if it is in a desirable location. Brokers will examine competition, ease of access, and the nature of the surrounding neighborhood.

The patient base. A practice with a large patient base will not necessarily be given a higher value than one with a small clientele. There are many other factors to consider, like specialty and cost per service.

The practice’s reputation. Practices that enjoy a good online reputation and amicable relationships with the community are in high demand, and as such are appraised accordingly.

Financial matters. Financial issues that brokers take into account include patient payment terms, effective fee and collection procedures, and lab fees.

Why is an Appraisal So Important? 

A proper dental practice appraisal isn’t just a smart idea; it is required for a sale. It is also important that the process be customized: Focusing too much on tangibles and following formulas can lead to an over- or under-valuation. Dental appraisals may actually minimize the values of the building, equipment, and furniture. 

Instead, you should seek a specialized appraisal that looks at the overall value of your individual practice, including intangible assets like patient base and practice reputation. Dental brokers know how to properly take these into account, which leads to more accurate valuations.

Knowing what your practice is worth can help you get the best price for it. When you sell your practice, you want to get out of it what you put into it – and more. Our experienced team at Schiff Dental Brokerage can thoroughly appraise your practice and help you get the value it deserves.

Contact us today to get started.

Schiff Dental Brokerage
Email: ASchiff@Schiffcpa.com
Phone: (410) 321-7707 Ext #1205
Url: https://schiffdentalbrokerage.com/
100 West Road Suite 410
Towson, MD 21204