Every dentist I speak with who owns their practice has high hopes of paying off their debts someday and then selling the practice. Paying off debt not only releases a tremendous amount of stress off their shoulders but there is also another reason for wanting to sell their practice. The sale of a practice is a boost to the retirement fund and most owner dentists depend on that money to see them through in their later years, allowing them to enjoy retirement with little to no stress!
Unfortunately, the ADA reports that the value of dental practices has been decreasing. Coupling that with the fact that the dentist retirement age is increasing means that dentists are working into their later years. Working later in life many times also means working at a bit of a slower pace. Now, this is not an ideal situation for most who want to work hard to later enjoy their retirement.
When the income and profits decrease, the value of the practice also decreases. It’s a catch twenty-two! I want you to understand one thing today: profitability is the number one thing to increase practice value! Yes, there are many factors like the number of patient charts, the facility, and the production, which all play a part! But turning a solid profit will get the attention of bankers who loan money to buyers.
Having a strong, financially healthy business is the answer to increased value. There are many components that play a part in maintaining a healthy business. If you want to examine your own practice, let’s chat – I’m ready to help you find the best way to increase the value of your practice.