Finding a buyer is not the only factor to consider when looking to sell a dental practice. Among the questions to think about is, “When is the best time to sell my dental practice?” “Who will assist me in the transition?” and, most importantly, “What is the value of my dental practice?”

An important factor to consider is the COVID-19 pandemic or any other important economic crisis and how it might affect the value of dental practices. There is no reason for the entire selling process to be stressful, but it can be overwhelming for many dentists and practice owners.

The following are some crucial tips shared by our Towson dental broker you can follow to ensure the sale of your dental practice goes smoothly:

Plan your exit in advance and don’t wait until the last minute.

Early planning gives you the chance to weigh your options. Knowing which offers to consider will allow you to make an informed decision. Without a plan, you may end up taking the first offer that comes your way. However, when you are not in a rush, there is no reason why you can’t be selective about the offers that come in and proceed only with the one that seems most reasonable to you.

In addition to planning early, you have time to consider different transition methods. An example might be a dental service organization (DSO). If you have a large dental practice, you may contemplate selling half to a partner and carrying on for a few more years. Once you are certain the time is right, you can then cash in on the other half.

What is the average time it takes to sell a practice?

There are many factors that can help determine how long your dental practice will stay on the market. However, two factors stand out.

Your dental office’s location is one factor. Are you located in the center of a city or in the suburbs? Is it in a large city? Usually, dental offices are located in more populated areas of the country (Chicago, San Diego, or New York) because they tend to sell faster than those located in smaller, more rural areas.

In addition to your practice location, another factor affecting how long it will take for you to sell your dental practice is its size and value. Dentists with an estimated valuation of $1 million are in greater demand and have a greater chance of being on the market for less time. However, practices valued at less tend to stay on the market for a longer time. How come? There is a simple reason for this: smaller practices mean less income for incoming dentists.

Having said that, a sale can sometimes be made within weeks, or even two or five years of expressing a desire to sell! You simply need to be patient when trying to sell your practice. 

What is the value of your dental practice?

It is a good rule of thumb to use an easy-to-use and quick valuation method when valuing your dental practice. In spite of this, this is not the most accurate method of evaluating your dental practice since every practice is different. In many cases, the rule of thumb method does not capture the actual value of a dental practice that performs well or poorly.

A number of factors are not considered in the above example. Do you have the capability of performing a variety of dental procedures? What is the reputation of your dental practice? How well does it leverage its resources?

When determining its value, you should consider all aspects of your dental practice. For instance, you should look at your cash flow level, tangible assets as well as intangible assets, or even how you compare to similar practices in your area. Although it may seem strange, factors such as the mix of patients and the availability of parking are significant.

The problem is, there is no standard approach to valuing your practice. You need both experience and an accounting approach to be successful. Nevertheless, since they have a good understanding of the dental industry, you are advised to work with valuation experts.

Whether you are looking to sell your dental practice now or in the future, we can help you. Just give our dental brokerage in Towson, MD a call today and one of our dental brokerage professionals will assist you.