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How To Maximize Your Dental Practice Value Before Selling

BY: MICHAEL S. FURLONG

Thinking of selling your dental practice? It’s a huge decision. Don’t leave your years of hard work to chance. If you partner with 1st Med Transitions, a respected and proven dental practice brokerage, you can count on less stress, higher profit, and reduced cost when selling your practice.

Maybe you have worked hard for many years and are looking forward to retirement. A nonstop vacation of travel, leisure, and relaxation. More time with the family. You’ve earned it!

Or maybe you are facing declining health or other life issues and need to sell your dental practice. Don’t waste your limited time bogged down with the pressures and stress of of selling your practice

Want to walk away from your practice with maximum profits, right?

We can help you maximize the value of your practice before putting it on the market, so your hard work and dedication to the practice over the year will pay the highest dividends.

Read what 1st Med Transition customers have to say about us.

Know What Impacts the Value of Your Dental Practice

To know what your dental practice is worth, you will need a current practice valuation. If you want to improve the potential sale value, it is helpful to know the factors that influence your dental practice’s value. !

Consistent monthly growth with an active patient base

This is the most important factor. This is what potential buyers, and the banks who fund them,want to see. Even if you had tremendous profits in prior years, what matters most is NOW. No one wants to buy or fund a weak or dying practice. When analyzing your practice, your most recent tax return is given the most weight. Your practice’s potential future earnings will be based on past years’ profits. A practice that appears to bestagnant or decreasing in monthly revenue and patient numbers is worth far less than a growing one.

Appealing Cash Flow

Also important in your valuation are profit margins or cash flow. Buyers want assurance that your practice is a solid investment. They want to know that they will start with a practice that can sustain their current lifestyle and cover all of the expenses of the practice. Before taking on the debt of purchasing a practice, buyers want certainty. You can prove this to them with fixed overhead and high cash flow.

Appropriate Expenses

How do your expenses lineup with industry standards? Hopefully, your accountant is providing quarterly financial statements that you can review. Review them carefully and make sure you are not spending too much on supplies or unnecessary services or systems. Cutting unnecessary expenses also increases profits. Not only will you earn more while your practice goes on the market, but less outflow will make your practice more attractive to potential buyers.

Do Not Lose Momentum

Even if retirement is years away, it’s not too early to begin preparing. In fact, early planning will give you more time to work on and increase your dental practice’s value.

As already stated, the stronger your practice is, the more it is worth. You don’t want to lose out on hundreds of thousands of dollars because of poor marketing, too few office hours, or lack of patient retention.

Strengthen your practice and increase collections now! A thriving, growing practice will go far to woo potential buyers.

Maximize your valuation by continuing—or increasing—marketing. Maintain your website and continue to ask for referrals and reviews to bring in new patients. Increase profits by cleaning up accounts receivable, maximizing case acceptance, and prioritizing a solid recall system. If you don’t know how to do these things, consider hiring a consultant. First, however, talk with our experts at 1st Med Transitions

Don’t let your patients or staff lose momentum. This could happen if they learn about your retirement plans. Patients loyal to you may decide it’s time to find a new dentist—after all, if they can’t have you, why not try the new guy two blocks from home? Staff could fear future job security or foresee disruption and confusion with the transition. This can cause loyal employees to look for a more stable, reliable job. After all, you’re the one retiring, not them

Keep retirement plans between you and those who need to know. This doesn’t include anyone on staff.

MAKE STRAGEGIC INVESTMENTS

If your dental practice is already modern and well-equipped, keep it that way. Make sure staff members continue all the daily, weekly, and monthly checks. Replace items as they wear out or break. Keep up with maintenance and preserve the esthetics of your office. These are the same to-dos that would be on your list, were you selling your residence.

If you built your practice years ago and haven’t updated it, now is probably the time to make some valuable investments in the office. We don’t want potential buyers to feel like they time-traveled to the 90s when they come through your doors. Today’s buyers want today’s looks. You might need to purchase new flooring, countertops, cabinets, and décor. A new coat of paint, perhaps in a more modern color, could transform the perceived value of your office.

Technology is a big deal for buyers, as well. Does your practice still perform x-rays with film? Do you have the latest technology? Overhauling all your equipment may not be necessary, but strategic upgrades could substantially increase your practice’s value

If you plan to retire in less than a year, we’ll help you carefully consider how much to spend and where to spend it. Is it best to replace chairs in the operatories or redecorate the lobby? Should you consider going digital? Without help from a dental practice broker, you may spend thousands of dollars on unnecessary upgrades while neglecting to purchase the things that would increase your practice’s value

If you plan to retire in three years or more, bigger purchases may be wise. Our team can advise you on how to get the most return on your investment.In some cases, equipment purchases made three years before the sale of a practice lead to increased patient referrals and retention. Current patients who are excited about your office upgrades will be more likely to send new patients your way.Making specific investments in your office will also let employees know that you prioritize your practice, and so they will tend to do the same. Happier hygienists yield happier patients.

At 1st Med Transitions, we have answers and solutions for you. We will help you determine:

  • The current value of your practice
  • Whether you need to invest in upgrades or changes
  • How much those upgrades will cost
  • Which investments will yield the most profit when you sell

Learn how to maximize your practice for sale by contacting 1st Med Transitions online for your practice valuation or calling (800) 815-0590 today. Partner with our dental practice brokerage, and you’ll enjoy peace of mind knowing that you’ve done all you could to maximize your practice prior to selling.


Michael S. Furlong - Senior Transition Advisor
Mike has been assisting Doctors with their practice transition needs for over 10 Years has personally been involved in $150+ Million in closed practice transactions. Mike can be reached at
(800) 815-0590 or mfurlong@1stmedtransitions.com.

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