Dental Practice Valuation Services
Discover Your Dental Practice’s Real Worth
Understanding the worth of a dental practice is as important as it is intricate. For dentists considering a transition, nailing down a fair value can feel like a challenge. But it’s a challenge we’re ready to tackle.
How We Value Your Dental Practice
Our approach to dental practice valuation and dental office valuation has been honed over years of industry experience. The key? We focus on your earnings before interest, taxes, depreciation, and amortization—what’s known as EBITDA.
In simpler terms, we’re not just looking at how much money your practice makes in a year. This is where dental practice evaluations come into play. We dig deeper. We separate your income as a dentist from the actual profits of your business. It’s this profit—which indicates the real cash flow of your practice—that piques the interest of investors.
The Perfect Multiple – A Balancing Act
Finding the right multiple for your practice can be tricky. It’s a balancing act that considers:
- The potential rewards of the investment
- The associated risks
- The return on investment
It’s not a one-size-fits-all number. The multiple can be influenced by various elements: your location, staff expertise, financial stability, range of services, dental Practice goodwill value, and even your patient demographics.
Dental practice valuation companies provide the essential insights you need to make confident, informed decisions.
Knowing Your Buyers
Understanding the motives and methods of different buyers is essential. Private equity firms, for instance, prefer to invest and collaborate with you. They’ll want to keep most of your team intact to ensure business continuity. But, if they think more hands are needed on deck, they might adjust the EBITDA downwards.
Strategic buyers—those who already own dental practices—are different. They might boost the EBITDA, counting on synergies like:
- Streamlining management or vendors
- Negotiating better contracts for supplies and labs
- Improving payer contracts
Typically, private equity firms offer a higher multiple on a lower EBITDA, while strategic buyers go for a lower multiple but on a higher EBITDA.
And then there are individual buyers who wish to step into your shoes. They focus on Seller’s Discretionary Earnings (SDE) – the income they’d make by replacing you. Usually, they settle for a lower multiple than EBITDA.
Navigating these intricacies is what we do best. Let us help you find the value in your dental practice, and ensure it’s a winning figure for you.