Dental Practice Appraisal | Baltimore MD Dental Brokerage

Dental Practice Sales & Transitions

Appraising a dental practice gives dentists an idea of what their business is worth in the current market. Appraisals are usually performed when dentists prepare to move or retire. Our brokerage firm can ensure you get the best value for your practice through a professional valuation.

Beware of “rules of thumb.”

An accurate appraisal of a dental practice is not easy to do. A practice’s appraisal will usually be lower than its actual value if it is valued based on “rule of thumb” methods, such as gross income, net earnings, or inventory.

Consider the “rule of thumb” that states that a practice’s value equals its gross income. Consider two practices with the same gross income. The first provides low-cost services to a large number of patients. As for the other, it provides high-cost, specialized services to a smaller clientele. It is unlikely that an experienced dental broker would value them both the same, despite the fact that their gross incomes are identical. As a result, the high-cost practice is likely to have a better location and more qualified staff.

The factors that affect appraisals

To appraise a dental practice, dental brokers take into account much more than income and earnings. A number of factors will be considered, including:

  •  The type of practice: specialized dental practices, such as those of orthodontists or endodontists, are valued differently from those of general practitioners.
  • Location: an attractive location can greatly add value to the practice’s appraisal. It is important for brokers to examine the surrounding neighborhood and the competition in the area.
  • Patients: A practice’s value is not always determined by the number of patients it has; a practice with a small clientele may have a higher value despite having fewer patients.
  • A practice’s reputation: practices with good relationships with their communities are in high demand and are therefore valued more highly.
  • Financial Matters: Brokers consider financial matters, which include effective fee and collection procedures, payment terms for patients, and lab fees for specialized services.

What is the importance of appraisals?

In order to increase the chances of a fair sale, a proper appraisal is required. By focusing solely on what is tangible in the practice and following formulas, practices can be undervalued or overvalued. The value of the building, equipment, and furniture may actually be underestimated as a result of appraisals. An appraisal should focus on the overall value of the practice, including intangible assets such as the patient base and reputation. By taking these factors into account, dental brokers are able to provide more accurate valuations.

Knowing the value of your practice can assist you in obtaining the best price for it. If you decide to sell your practice, you want to be able to get back what you put into it. In addition to providing you with an accurate appraisal of your practice, our brokerage team can assist you in obtaining the value you deserve. Get started by contacting us today.

Schiff Dental Brokerage
Phone: (410) 321-7707 Ext #1205
100 West Road Suite 410
Towson, MD 21204