Successful Transitions

What Are You Worth to Your Pedo Practice?

By David Nohe
Valuation Expert, Levin Group

How much do you think your pedo practice is worth if someone bought it today? How much do you think the physical parts of your office could be liquidated for? Obviously, your practice is worth more than the sum of the chairs, technology, patients and building. But how much more? Imagine you are in the market to buy a new practice. Beyond the tangible stuff that a pediatric dental practice needs, what else would you look for? Here are four examples:

1. Reputation in the Community. How do active patients and their parents feel about the practice? Every practice needs to constantly solicit feedback from its patients. Without this information, a buyer is unable to gauge the attitudes of the current patients and parents toward the practice.
2. Patient Referrals. Do parents refer their friends’ children? Robust internal marketing systems are an excellent way to ensure that a practice has a good foundation for reliable new patient growth.
3. Doctor Referrals. Some practices rely heavily on referrals from dentists who would prefer to avoid younger patients. If a seller can show a month-by-month breakdown of the 15–20 referral marketing activities that drive referrals, a buyer will jump at the opportunity to step in your shoes and carry on the practice.
4. Low-Stress Systems. The accounting books can speak to the production of a practice, but they are hauntingly silent on the stress levels of the pediatric dentist and staff. Only an assessment from a team skilled in your business, pediatric dentistry, can properly quantify the systems to make a practice a pleasure to own and a gem to buy.

Buyers pay more for pedo practices that run well. Here is a point that might shock you—every pedo practice can run better. Let’s say your office has the very best staff available. They are experienced, knowledgeable and enthusiastic. However, if parents have trouble scheduling an appointment within 7–10 days or they have to wait 45 minutes when their children have an appointment, there’s a problem. Your office will be worth more if you replace the scheduling system.

Every pedo practice is unique and thus has individual areas of opportunity. Learn how you can increase the value of your pedo practice before you sell it.