What is the value of a dental practice?

The most common Rule of Thumb we hear is, “The practice is worth 70% of gross revenue,” or “The practice is worth one times net income.” Neither of these Rules of Thumb is an accurate representation of the practice value.

How many times EBITDA is a dental practice worth?

Dental practices and DSOs are commonly sold for a multiple of EBITDA that ranges from 4 times EBITDA, to (in some rare cases) 15 times EBITDA or more. Based on today’s dental practice and DSO valuation multiples, every $1 saved on procurement can add $5 – $15 to your practice’s value.

What is the average revenue of a dental practice?

On average, general practices are bringing in $771,000 in annual revenue and specialists are bringing in $1.1 million.

What multiple do dental practices sell for?

According to our data, in 2019 dental practices sold for an average 0.65x revenue multiple. The term multiple is a valuation metric that refers to the implied value of a business. It is calculated by multiplying the amount of revenue or sales a business makes by the valuation multiple.

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What is the value of the dental industry?

The market size, measured by revenue, of the Dentists industry is $159.7bn in 2022.

How do you analyze a dental practice?

ABCs of Assessing a Practice

  1. new patients.
  2. average production per new patient.
  3. percentage of single-tooth treatments.
  4. need-based versus elective procedures.
  5. case acceptance rates.
  6. patient referrals.
  7. average production per patient.
  8. scheduling capacity versus actual number of scheduled patients.

What is a good EBITDA for dental practice?

A current client has as successful practice that generates $5.1 Million in revenue, but Aligned Dental Partners calculated their EBITDA to be on 13%. A practice of this size should have 24% clinical EBITDA.

Do dentists make good money?

Dentists in some places are so well compensated that they earn more than the average doctor. According to a 2012 report in The Journal of the American Medical Association, the average hourly wage of a dentist in America is $69.60 vs. $67.30 for a physician.

What is the value of a new dental patient?

The average new patient is worth twice the value of an existing patient. It’s a must to bring them into your practice – even in the best of times. The average solo dentist requires 24–50 new patients per month to achieve consistent growth.

How can dental practice increase revenue?

7 Ways to Boost Your Dental Practice Revenues

  1. Increase Your Capacity to do More Dentistry. …
  2. Include More High Profit Procedures in Your Treatment Repertoire. …
  3. Accept More Patients into Your Practice. …
  4. Increase Your Case Acceptance Rate. …
  5. Expand Responsibilities of Your Dental Assistants.
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How do you depreciate dental equipment?

Dental equipment and technology are typically depreciated over 5-years. Furniture and fixtures (dental cabinets) 7-years; certain (qualified) leasehold improvements 15-years; and other improvements including buildings & structures (not land) are depreciated over 39-years.

How much is an endodontic practice worth?

Endodontics practices command the highest goodwill premium at 82.18% ahead of pediatric practices which price goodwill at 81.05%, interestingly. Periodontics practices have average goodwill at 77.63% and general practices allocate on average 76.10% to goodwill. .

How do you value a medical practice?

Determining the value of practices

“Medical practices are generally valued off a multiple or fraction of revenue. The most common general practices would be in the 0.5 to 0.7 times their annual revenue range. As you get to higher end specialties, you can go to 0.8 to 1.0 times annualized revenue.

What industry does Dentistry fall under?

Dentistry

Occupation
Names Dentist Dental Surgeon Doctor
Occupation type Profession
Activity sectors Health care, Anatomy, Physiology, Pathology, Medicine, Pharmacology, Surgery
Description

How competitive is the dental industry?

The industry itself is moderately competitive. We can attribute this to the high degree of fragmentation; there are many practices with a minute market share.

How many dental practices are there in the world?

Results: Responses were received from 73 countries with a reported total number of dentists of 703,947.