Do you know the real value of your practice? Whether planning to sell your practice to a DSO or simply developing a more realistic understanding of your profitability and potential, an expert dental practice valuation will help you get informed about the strength of your business.
Like anything in life, you have to know what something is worth before you sell it–otherwise, you’d have a huge potential for losing money. But even if you’re not thinking of selling in the near future, a dental practice valuation will help you ensure you’re getting the maximum return on your investment of time and effort. You’ve worked hard to develop your business. Shouldn’t you benefit from it? The answer is a resounding yes!
Here are three key benefits of conducting a dental practice valuation.
1. Determine What Your Practice Is Worth Right Now
If you were to sell your practice today, chances are you’d estimate its worth as far lower than it actually is. In fact, most dentists undervalue their practices when negotiating with DSOs or other buyers. At NextLevel, we coach our dentists to realize their true deserve level—especially when it comes to evaluating their efforts and return on their hard work.
An expert will be able to evaluate a variety of factors you might never consider when assessing your business’ worth. Do your financial records report consistent high-value case closures? Is all of your equipment new or well-maintained with excellent service plans? Do you have a dynamic staff invested in business success? These things (and more) contribute to the overall health and value of your practice.
2. Learn What Your Practice Could be Worth in the Future
When we perform valuations, we also inform our clients of their practice’s potential worth. This is an important step in supporting dentists looking to maximize the sale of their practice.
Often clients will come to us with a practice that is running well but still leaving money on the table. If you knew you could massively increase your ROI by an extra six months or year of strategic development, would you walk away? Getting a valuation done before you enter negotiations helps give you the opportunity to make that choice.
Even if you aren’t looking to sell or retire immediately, knowing what your practice could be worth will give you the purpose and drive to continue making and achieving aggressive goals. You have the potential to exponentially increase the value of your practice–not just 1 or 2x, but 10x or more!
3. Create an Action Plan for Growth and Development — or Build the Case for a Premium Price
Once your practice has been assessed, you will have the information you need to understand your practice’s growth potential. At NextLevel Practice, we utilize this information to help you create an action plan that aligns with your goals.
For some dentists, that means leveraging existing assets and strengths to level the playing field in negotiating the final asking price. For other dentists, an action plan might be developed to strategically grow your practice, expand your portfolio and position you for even greater success.
In short, a valuation gives you the freedom to determine the best path for you and your practice.
When Should You Evaluate Your Practice?
Selling a practice is not the only time to perform a valuation. It is, however, one of the most important. That’s when you need every bit of data at your disposal to justify the price you are asking.
Many experts also note that dentists who own their own practice should perform a valuation every year to maintain and optimize the financial health of the business. Other occasions for valuation include:
- Buying a Dental Practice
Is the investment worth the sticker price?
- Hiring Dental Associates
Can your patient load and case closure rate justify the costs of new staff?
- Navigating a Merger
A valuation keeps everyone honest. Transparent partnerships are lasting partnerships.
- Taking on a Partner
As with a merger, a valuation ensures that everyone feels confident and informed.
- Entering into Litigation
Protect yourself in the event of litigation with accurate records and data compiled by an industry expert.
- Estate Planning
No one likes planning for their eventual passing, but you owe it to your loved ones to ensure they receive the true value of your legacy.
Let’s collaborate! Don’t leave money on the table when it comes to selling your practice or optimizing its overall value. Give NextLevel Practice a call to set up an appointment for an in-depth consultation with one of our practice valuation experts. We will help you establish the worth of your business, detect pain points and potential for growth and even develop an action plan for moving forward.