5 Key Factors That Impact Valuation
If you’re a dentist considering selling your practice or just curious about its market value, you’ve likely asked yourself, “What is my practice actually worth?” The answer isn’t as simple as checking a few numbers. Dental practice valuation is a nuanced process, and understanding the key factors that impact your practice’s value can help you make informed, strategic decisions.
At Wingspan Transitions, we’ve guided hundreds of dentists through successful transitions. Here are five essential factors that directly influence your practice valuation:
1. Revenue and Profitability
It’s not just about how much your practice makes, it’s about how much it keeps. While total revenue gives an initial snapshot, buyers pay close attention to net income, EBITDA (earnings before interest, taxes, depreciation, and amortization), and profitability trends. A practice that consistently performs well financially over several years will typically command a higher valuation.
2. Location, Location, Location
Your practice’s geographic location plays a major role in its value. Practices in growing, high-demand areas—especially with limited dental competition—often see a boost in valuation. Even within the same city, neighborhood demographics, accessibility, and visibility can significantly affect buyer interest and price.
3. Patient Base and Retention
How loyal is your patient base? A steady flow of recurring patients, solid recall systems, and strong retention rates make your practice more attractive. A buyer wants to know they’re not starting from scratch. The quality of your patient relationships can signal long-term value and stability.
4. Type of Services and Technology
Are you offering high-margin procedures like implants or cosmetic dentistry? Do you have digital systems in place for diagnostics and recordkeeping? A modern, tech-forward practice with diversified services tends to attract more buyers and command a better price.
5. Practice Systems and Team Stability
Buyers want to walk into a well-run operation. Streamlined systems for scheduling, billing, and hygiene—paired with a loyal, trained team—add tremendous value. Practices with low turnover and consistent management often transition more smoothly and are less risky for potential buyers.
Bonus Tip: Don’t Go It Alone
Even with these insights, practice valuation is complex. Market trends, buyer behavior, and individual goals all play a role. That’s why our team at Wingspan Transitions offers a Free Practice Valuation to help you get a clear, customized picture of your practice’s worth—without pressure or obligation.
Ready to Find Out What Your Practice Is Worth?
Let’s start the conversation. Schedule your free valuation today and take the first step toward a smooth, successful transition.