The pandemic has taken a toll on all aspects of the U.S. healthcare system. The departure of dental hygienists from the field has been widely publicized, and they’re joined by nurses, physicians, and allied healthcare workers.
It’s not surprising, then, that dentist-owners are also at least thinking about selling their practices. If you’re one of them, it’s time to consider how you’ll get the most out of selling your dental practice.
Is Now the Best Time to Sell Your Dental Practice?
According to a variety of sources, the sale prices for dental practices are holding up well. Of course, that depends in large part on where your practice is located. Urban practices in more affluent markets fetch a premium, of course, with rural practices potentially being valued the lowest.
That’s not a hard and fast rule, though; if your practice is in or near a reasonably large city or town, and there are few if any competitors, that can enhance the sale price. More important than geography, though, are the historical earnings and earning potential of your practice.
So how much can you sell your dental practice for? If you did well on both revenue and margins in 2017, 2018, and 2019, your sale price should be high. But if you’re willing to hang in there for a while, the price can be much higher. Let’s take a hypothetical example.
A $1 million practice operating at 30 percent margins nets $300 thousand annually. With a 4x multiplier, a buyer will offer $1.2 million. Obviously, there’s no guarantee that your practice will receive that exact multiplier, but it’s a place to start.
If that same practice doubles revenue while holding a reasonable line on margins – let’s say 45 percent – you’re now looking at $900 thousand net. The projected sale price would now be $3.6 million.
Sell Your Dental Practice for Double the Price
Check out the testimonials on the SmartBox Dental website. You’ll see what dentists who have partnered with SmartBox have been able to achieve. As just one example, consider Dr. Michelle Haynes of Highland Ranch, Colorado.
“Since we've been working with SmartBox,” she said, “we actually have had a 30 percent or higher growth each year."
If you’ve got a few years to wait for the best time to sell your dental practice, SmartBox can help you maximize the sale price.
Schedule a complimentary, 45-minute Practice Growth Call. This consultation with one of our Directors of Practice Growth is all about helping you reach your growth goals; it’s not a sales call.
Following the call, you’ll receive your completely personalized Roadmap to the future you want.
Done right, exit planning for dentist-owners can reap huge rewards.
SmartBox employs the best minds in dentistry to help you grow your practice. Our Practice Growth System™ is proven to help dentists in every market area across the country achieve predictable year-over-year growth.