Free Dental Practice Valuation Calculator
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Ramp is an all-in-one card, bill pay, and expense management solution. We simplify how your company spends money and highlight wasteful spend. Duplicate software licenses, monthly plans you should switch to annual, over $350,000 in pre-negotiated partner discounts – all designed to save you time & money.
What is a dental practice valuation?
Selling your dental practice is a life changing and monumental process, marking the culmination of years of hard work and often the transition into a new life chapter. It is critical to have a clear understanding of what goes into the valuation of a dental practice to ensure you are
A dental practice valuation is an exercise in understanding the total value of a medical practice. When considering selling or buying a dental practice, this is how the total transaction value will be determined. Dental and medical practice valuations are calculated using a variety of factors, including cash flow, total asset value, insurance and billing, customer base and IT services, but cash flow is often the most important.
How does Ramp’s free dental practice valuation calculator work?
Ramp’s dental practice valuation calculator uses an asset-based approach to valuation. At its core, the most common way of determining the total value of a practice is determined by applying a multiplier to the total annual revenue or cash flow of a business, while taking into account additional qualitative factors.
The purpose of Ramp’s dental practice valuation calculator is to give you a reasonable estimate of your dental practice valuation using the most material quantifiable factors. Simply enter your annual revenue, operating costs, and value of your tangible assets, and our free calculator will output your estimated valuation - for free!
What other factors should be considered when valuing a dental practice?
While the most important factor is cash flow, there are numerous other factors that can go into valuing a dental practice. As mentioned, these can include customer base, insurance mix, but also include factors such as seasonality, practice specialization, your practice’s reputation, referrals, and more.
While these are harder to quantify, your practice’s reputation, how long it has been around, speciality, and regional competition will play a role in determining the final value of your dental practice. The White Coat investor offers valuable insight into valuing medical practices that dives deeper into all these factors and more.
What steps should be taken when exploring a sale of a dental practice?
Ramp’s free dental practice valuation calculator is a great way to get a sense of how much your practice could be worth, but it is important to conduct the necessary preparation and research before officially beginning the process of selling. These include making all the necessary legal and accounting preparations, ensuring your physical practice is clean and in working order, and having a clear story for your “why” on selling. We recommend starting with resources offered by numerous dental news sources and blogs to get a clear understanding of the steps required, such as this breakdown offered by the American Dental Association.
Revenue multipliers provide a good sense of the magnitude of a dental practice valuation, but the final valuation is influenced by numerous additional factors outlined in this article.
The information provided in this free tool and article does not constitute legal or financial advice and is for general informational purposes only. Please check with an attorney or financial advisor to obtain advice with respect to the content of this article.
Ramp’s software helps dentists—from private practices to DSOs—control spend, automate busywork, and save an average of 3.5%. Learn more on Ramp’s dental page.