Why Dental Practice Valuation (Appraisal) Matters
Running a successful dental practice isn’t just about delivering great patient care—it’s also about ensuring your business is economically sound.
One of the most overlooked but essential steps in maintaining the long-term health of a dental practice is a ,professional practice valuation.
Running a successful dental practice isn’t just about delivering great patient care—it’s also about ensuring your business is economically sound.
One of the most overlooked but essential steps in maintaining the long-term health of a dental practice is a ,professional practice valuation.
Whether you’re looking to sell, expand, merge, or simply plan for the future, understanding your practice’s true worth provides clarity, security, and strategy.
1. Economic Health Checkup
A valuation serves as a financial diagnostic tool. It gives you a clear picture of:
- Revenue streams and profitability
- Overhead and expense ratios
- Patient base stability and referral patterns
- Equipment and technology depreciation
- Real estate or lease obligations
This data isn’t just for buyers or investors—it’s for YOU. Knowing your valuation helps you identify inefficiencies and unlock hidden growth opportunities.
2. Essential for Transitions
Planning to:
- Sell your practice?
- Bring on an associate or partner?
- Merge with another group?
A proper valuation ensures that all stakeholders have a fair, objective baseline. It removes guesswork and builds trust—critical elements in any ownership transition.
3. Retirement and Succession Planning
For many dentists, their practice is their largest asset. Without a valuation:
- You risk underpricing your life's work.
- You can’t plan retirement cash flow accurately.
- You may miss key timing for a more lucrative exit.
Having updated valuations every few years enables smoother retirement planning and lets you respond to changes in the market or your personal life.
4. Supporting Financing and Investment
Whether you’re applying for a loan to expand or attract investors for innovation:
- Banks and investors want hard data.
- A valuation adds credibility and leverage to your proposals.
It’s your business plan’s backbone—numbers tell the story better than projections alone.
5. Litigation, Divorce, or Disability
Life happens. In unfortunate events like:
- Divorce
- Legal disputes
- Disability or death
A professional valuation ensures your interests—and your family’s—are protected with a reliable, third-party assessment of your business’s worth.
6. Peace of Mind + Strategic Advantage
Just like you advise patients to get regular cleanings, dentists should get regular valuations—ideally every 3–5 years. Why?
- Market conditions shift
- Patient demographics evolve
- Practice revenue fluctuates
- Technology and insurance trends impact cost/value
An updated valuation equips you to act proactively, not reactively.
Final Thoughts
Dental practice valuation isn’t just about preparing to sell—it’s about maximizing the clinical, operational, and economic health of your practice. It’s a strategic tool that empowers you to make informed decisions at every stage of your journey.
Want to know what your practice is worth—and how to improve that number?
Dental Practice Appraisals
Dental Practice Appraisals are a necessary and powerful tool to be used for the following:
SELLING YOUR DENTAL PRACTICE
An experienced dental practice appraiser is needed to determine the Fair Market Value of your business before it is placed on the market. From the appraisal, the correct information is extracted to prepare “Marketing Packets” to provide to prospective buyers. The eventual buyer will provide the lending institution with the practice details to obtain financing.
FINANCING A PRACTICE
Financial institutions require specific information about the subject practice to determine the feasibility of a loan to the buyer. The information provided must show that the practice will “make the payments.”
ESTATE PLANNING
To protect your practice and estate an appraisal is required by your financial advisor/estate planning Attorney. Without this guidance, estate taxes could become a burden and in the event of your death or disability it is very possible your personal advisors would have no idea of the practice’s market value. A delay in determining where to obtain a professional opinion could result in heavy losses to your family/estate.
DIVORCE
An amicable divorce is typically an oxymoron. Proper preparation, depending up on the home state of the practice, may require a complete Practice Appraisal. Confirm this with your attorney.
ENTITY FORMATION/DISSOLUTION
A Practice Appraisal is normally required for each practice. It is impossible to fairly create or effect a merge or partnership of some sort without complete financial and operational details of the parties involved. Obviously, the need for a Practice Appraisal is required for the same reason with a dissolution.
BUY/SELL AGREEMENTS
Entity formations require a dental practice appraisal. Opinions of Value are typically used every few years, if not annually, to be assured the Buy/Sell Agreements within an entity are fair and true to market value.
REQUEST AN APPRAISAL
To request a Practice Appraisal, complete the form below or call Hemmen & Associates at (309) 517-3023.
Dental Practice Appraisals are a necessary and powerful tool to be used for the following:
Selling your Dental Practice
An experienced dental practice appraiser is needed to determine the Fair Market Value of your business before it is placed on the market. From the appraisal, the correct information is extracted to prepare “Marketing Packets” to provide to prospective buyers. The eventual buyer will provide the lending institution with the practice details to obtain financing.
Financing a Practice
Financial institutions require specific information about the subject practice to determine the feasibility of a loan to the buyer. The information provided must show that the practice will “make the payments.”
Estate Planning
To protect your practice and estate an appraisal is required by your financial advisor/estate planning Attorney. Without this guidance, estate taxes could become a burden and in the event of your death or disability it is very possible your personal advisors would have no idea of the practice’s market value. A delay in determining where to obtain a professional opinion could result in heavy losses to your family/estate.
Divorce
An amicable divorce is typically an oxymoron. Proper preparation, depending up on the home state of the practice, may require a complete Practice Appraisal. Confirm this with your attorney.
Entity Formation/Dissolution
A Practice Appraisal is normally required for each practice. It is impossible to fairly create or effect a merge or partnership of some sort without complete financial and operational details of the parties involved. Obviously, the need for a Practice Appraisal is required for the same reason with a dissolution.
Buy/Sell Agreements
Entity formations require a dental practice appraisal. Opinions of Value are typically used every few years, if not annually, to be assured the Buy/Sell Agreements within an entity are fair and true to market value.
Request an Appraisal
To request a Practice Appraisal, complete the form below or call Hemmen & Associates at (309) 517-3023.