Posted on Jul 25, 2011
Image Credit: © Dreamstime.com
Posted on Jul 25, 2011
By Katie Hines, Katie Hines Office Transitions
Dentists considering a dental transition frequently come to us at NAPB with a variety of questions. Listed below are our answers to a few of the most common inquiries.
Q. What information do you need from me to accurately value my dental practice and start marketing?
A. To provide the most accurate determination and greatest benefit from your hard work, a good dental practice broker will ask for quite a bit of documentation during your dental practice valuation, including past tax returns and other financials. Your dental practice broker may also do a site visit, take pictures, speak to your CPA, and a host of other tasks to evaluate your practice. Our experience has proven the more work that is done up front, the higher the payoff in terms of the practice selling for more money and more quickly.
Q. How long will it take to sell my dental practice from the time I list?
A. Good-looking financials go a long way in helping your dental practice sell quickly. Look for ways to reduce overhead in relation to collections, and you will get more for your practice and it will sell more quickly as well. In a good area, the transaction can happen in as few as 6-12 weeks from the time the valuation is completed. In a rural or an area in less demand it can typically take longer. In that type of situation it is realistic to assume it could be 2-5 years—if indeed it does sell. However, the length of time depends not only on the dental practice location but also on many other variables.
Q: Are there ‘rules of thumb’ to how much a dental practice is worth?
A: Some say that practices are worth 70% of gross collections, some say that you have to base the value on cash flow and not collections. We find that rules of thumb are simplistic and don’t take into account the many factors that affect a true dental practice appraisal and valuation. To find out the true value of a dental office, an expert in dental transitions should be consulted to conduct an evaluation of the practice for sale.
Q. When an NAPB broker lists my dental practice for sale, how will it be marketed?
A. Good dental practice brokers will do extensive marketing as well as networking to ensure that your practice is available and is brought to the attention of anyone who is looking to buy. Generally, dental practices for sale will be marketed in the following manner:
– Listing on member dental practice broker website
– Listing on the National Association of Practice Brokers website
– Listing on lender websites that allow online classified advertising
– Broadcast emails to the dental practice broker client database
– Dental Practice Listings on local and regional dental association websites
In addition, many dental practice brokers will put together a customized program of specialty print advertising and specialty database e-mailings for listings that require more targeted marketing.
Q. How can I make my dental practice more valuable?
A. Easy things you can do when selling a dental practice include: cleaning, a fresh coat of interior paint, replacing mismatched waiting room chairs, carpet and grout cleaning, and clearing out clutter, boxes, and storage areas of your dental practice for sale. Also, start concentrating on increasing production through internal marketing means, better treatment planning, and close follow-up.