How do you build value in a dental practice?
And, WHY is so important?
You will probably spend more time in your dental practice than in any other single venue. Why wouldn’t you want to make that investment of time pay off?
Of course you would!
So, start thinking about it early. Ideally, you should start the process when you start the practice.
Value in ANY business is based on several factors.
- Don’t make the practice just about YOU.
Because, when you’re not there, the value plummets. I discourage personal names in the title of a practice. Rather, make it about the place or something else.
- Create systems that produce repeatable results.
This way, anyone can use them and get what you’ve gotten…or better.
- Create a Strategic Plan.
A plan that shows milestones and consistent growth will enable a potential investor or buyer to predict future revenue in a positive direction. Otherwise, they’ll discount the value negatively.
- Stand Out From The Crowd.
People will always place a premium on “unique” offerings. If you’re the same as every other practice, you’ll get the same formulaic return.
- Continue to Grow.
Even though you might want to slow down, don’t. The trajectory of your business will determine the perceived value to a potential buyer. Keep investing and keep growing.
- Keep profits high and expenses low.
Don’t overspend. A smart buyer will want to see net income being as high as possible. When the costs are high, the fear of losing patients and still having a high overhead that will eater away at the profit will arise and erode the value.
- Never have ONE source of anything.
ONE is the worst number in any business. One source of new patients, in particular, can be devastating to practice value. Diversify your marketing, your offerings and even your suppliers.
- Seek Advice, sooner than later.
Get help. Don’t wait until you’re ready to sell, because by then, its too late to make changes. I suggest looking out at least 5 years before you’re selling. That will give you enough altitude to make any adjustments. And, buyers typically look at the previous 3 years.
Want to talk? Email us at Practiceperfectsystems@gmail.com