As part of dental practice ownership, you’re constantly busy juggling multiple roles within your practice. Finding ways to increase dental practice value is just another task on your mind (and an important one), especially when you start to think about the possibility of transitioning out of ownership. What can you do in the meantime to improve the value of your practice so that when you sell... you have a highly attractive practice?
For starters, your patients’ experience with your practice leads to patient retention, practice growth and increased goodwill value. When you have high retention, your practice looks more attractive. That’s why it’s important to improve retention which involves everything from your office location to your parking lot, to the furniture in your office.
At JPA transitions, this is our sweet spot - we help doctors work smarter, not harder and maximize practice ROI. While practice overhead and economic variables are two of the top factors in determining your practice’s market value, here are additional ways that your hard assets and patient experience can improve practice value.
What’s the current condition of your dental equipment? If you have high-end equipment and your technology is updated, your practice worth will be much more than the alternative. Don’t forget that the appearance of your practice can have an affect on the buyer’s decision to purchase or not. Make sure that your dental equipment is meeting regulatory standards and is up-to-date. The first impression is important.
Your building's impact on dental practice value
If you purchased the building for your practice, you may have paid attention to the conditions of the space. The walls, wiring, plumbing, radiation protection… Think from the perspective of the buyer. They are completing their due diligence on your practice before purchasing. Is the building old? What needs to be repaired? If there are cosmetic changes the buyer feels are needed, that’s extra work they are buying into. The condition of the building can translate into a lower practice market value to the buyer. We don’t want that.
We know that many dentists rent their building but remember, even if you’re renting, these variables still play a role in the value of your practice as well as the time it will take to sell your practice. Potential buyers want to purchase a practice that is appealing and doesn’t have much work to fix up.
The condition of the building and office will go a long way to improve the first impression of the buyer and increase the marketability of the practice.
While this doesn’t have a huge effect on your sales price, it will reduce the time that your practice is on the market. Even the parking lot is a variable in the marketability of your practice. Think of the experience that your patients have when they pull up to the building. Is there parking available? Can they find your office? If it’s a hassle to even get into your office, your patients could get frustrated. If they can’t find your office it gives them a negative experience right from the get-go. It’s important that your patients have the most positive mindset as possible. This all feeds into your overall retention, giving your patients the experience they need to come back to your practice for years to come.
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Office environment, equipment, and furniture
Is your office too cold? Do your patients feel at home? If you’re in a small town you might have furniture that feels homier. If your market is in a big-city or downtown, then you’ll want furniture that is more clean, modern, or appropriate to that neighborhood. Keep in mind that while you want it to feel “homey,” you don’t want it to feel unprofessional or cheap. This may seem obvious, but remember -- you’re still in healthcare. If your waiting room feels too much like a living room or the furniture is old, new patients might have a lack of trust in your practice. While you want your patients to feel comfortable in the space they are in, it truly depends on the market. It should be appropriate for the clientele and the location.
Dental practice management software
Getting the right practice management software on day one can set up your practice for success. We recommend knowing the numbers of your practice as soon possible so you can increase the productivity, efficiency, and overall growth of your practice right from the start. Not only will a good software increase the efficiency of your office, but it makes it easier for the purchaser to manage the practice.
There are many practice management software programs out there. We encourage you to take your time, consider your business’s needs, and select the one that fits best for your business. Here is a list of dental software that we put together to help you choose the right software.
The onboarding experience for new patients
Your patients’ experience starts when they have their first interaction with your practice. Ensuring that experience starts off right requires thoughtful attention to every point of interaction, from your website, to your conversation with them on the phone, to parking, to right when they walk through the door.
Creating an onboarding experience contributes to patient growth, gives you a positive reputation, and helps your competitive advantage over other practices. Remember, your patients will make choices based off of how you make them feel. Larger patient base = higher value. We know some practices who have a one-on-one conversation with each new patient in a separate office with no dental equipment. It takes the fear away from the dentist and makes the patients feel more comfortable. Not only can patient experience improve reviews that you get online, but it can also increase dental practice value.
**Pro Tip: Look at the number of new patients acquired from month-to-month. The brokerage company or financial consultant will take this into consideration when analyzing your practice’s market value. You may have high retention, but make sure your practice is still growing from month-to-month!
Overall, hard assets and patient experience impact dental practice value.
Everything from your waiting room to your location to your practice management software and onboarding experience will contribute to your patients’ experience, retention, and market value. Remember these factors whether you’re buying a practice for the first time or selling a dental practice, so that you can get the best return on your investment.
When you’re ready to sell your dental practice, you will most likely reach out to a brokerage company or a financial consultant to determine what your practice is worth. At JPA, we help you keep the confidentiality of your sale, professionalism in vetting potential buyers, and maximize your return on investment. Let us know if you need any help selling your dental practice.