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When Does a Practice Lose Value?

September 28, 2020

Just like with porridge in the popular children’s story, there is a Goldilocks formula for selling a dental practice.

Too early or too late, and the full value of the practice diminishes.

When it comes to selling, think of a bell curve, explains Dr. Jim Clark, Benco Dental Practice Transitions expert. “Every year you practice, your practice gets a little bigger. You build up to a point, and you may have a down year. But when you get to that peak, you figure, I don’t want to work any harder next year. That is when your practice is the most valuable, and it is time to sell.” Dr. Jim Clark, Benco Dental Practice Transitions expert.

When Dr. Clark gets involved in a practice transition early, he can help decipher the perfect time to sell. Waiting can negatively impact the situation, and for one dentist such was the case, recently. By the time he found Dr. Clark, Dr. Finch’s rural practice was underserved, and the dentist was confronting personal health issues.

“He was collecting between $400,000 and $450,000 the last three years,” Dr. Clark said. “He had old equipment, nothing had been updated.” 73 years old and facing declining health, Dr. Finch was hoping to sell his practice by November, 2020, but he was about eight years too late.

“It’s very difficult to find people who want to buy in a rural area,” Dr. Clark explains. “There was a buyer interested, but COVID hit. Eventually, Dr. Finch made the decision to close his practice.”

According to Dr. Clark, the value of a dental practice is based on the last three years’ average collections. Finding the perfect time on the bell curve to sell is key. Wait too long, your practice will start slipping down the other side and lose value.

When Dr. Clark gets involved in a practice transition early, he can help decipher the perfect time to sell. “As dentists age, anything can happen. Trying to sell too quickly can be very difficult and unsuccessful. Several years are needed to find a buyer. If Dr. Finch had found Benco sooner, we could have saved his practice.” Dr. Jim Clark, Benco Dental Transitions expert.

It’s never too early to meet Dr. Jim Clark. Find out what he can do for your practice here.


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