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How your practice is typically valued

Nov 16, 2022 10:35:23 AM / by Everything DSO

I bet you’re curious how DSOs will value your practice.

To start off with …

Let’s look at how a BANK may value a practice when a dentist-to-dentist sale happens.

(This is your other option, either you sell to a DSO, or another dentist, these are the only buyers in the marketplace)

In today’s environment, banks are generally willing to loan 60% to 80% of the topline revenue of the target practice to a creditworthy borrower.

Factors which influence this include profitability, growth trend, need for capital investment, fee levels, and new patient volume.

Practice appraisers’ valuations independent of valuation methodology almost always result in values that fall within this range …

And this is quite simply because that is the most a dental buyer can borrow to fund the purchase.

The limiting factor in practice value when it comes to a doctor-to-doctor sale is really just how much the bank is willing to loan.

So you can see …

It’s difficult to get what you may REALLY be worth unless you go with a different approach …

More on that in another email.


Everything DSO

Written by Everything DSO

 Stan Kinder

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