Any dentist who owns a practice knows that their practice has value in the marketplace. Its value is based on a variety of things, including the owner’s reputation and experience, the number of patients the practice serves, the payment sources of the patients, as well as the physical equipment and assets owned by the practice.
Dental practice clients often come to us with questions about dental practice valuation. Since that’s the case, we’ve created this guide to help you understand valuation and why it's important. We’ll also provide you with an overview of valuation methods and factors that may impact the value of your practice.
Understanding Dental Practice Valuation
Dental practice valuation is a process that’s designed to determine the fair market value of a dental practice. The market value is important for a variety of reasons, so the dental practice owner should always know what their practice is worth.
We should note here that you may see ads from some dental transition specialists who offer free valuations of dental practices. However, those valuations are rarely true valuations. They use quick formulas based on the Rule of Thumb, which may say that the value of a practice can be based on simple formulas, such as these:
Keep reading: Dental Practice Valuation: A Guide for Dentists