If you own your own dental practice you are at some point going to get it appraised. For most dentists, this happens as part of the process when they are about to sell part or all of the practice in a brokered deal or a transition. Another common reason to get an appraisal done is for estate purposes.

But there is a third reason that is often overlooked: The appraisal as a tool for guiding growth.

I know many dentists who recommend doing complete “new patient-style” examinations on existing patients every five years so they can update their baseline status and re-evaluate dental health goals.

Why not apply that same kind of thinking to your practice? Wouldn't you like to know today how your practice is doing, and find out what your current baseline is? If there were significant gaps holding you back from being competitive in certain areas, wouldn't you want to know that right now?

Doesn't it make sense to take the same approach you use clinically – taking records, making a diagnosis, prioritizing a treatment plan – and using it to ensure the best health for your practice?

This is why I recommend that if you are even 10 or 15 years away from selling you get a professional appraisal performed. This wouldn't simply be just for the purpose of establishing current value, but also for the purposes of optimizing value during and after the transition. If you're serious about targeting your energies and making the right improvements to get where you want to be, you have to start with an objective clear-eyed view of where you are. This is information you need if you are going to effectively drive that value higher before it's time to sell.

The words "professional" and "objective" are very important here. This is not something you want to guess at, and it's not something you should do yourself. Sure, you can always find rules of thumb to apply in assessing practice value, but for the most part these are too generalized to be of much help. You're simply not going to get an accurate reading by applying a simple one-size-fits-all formula.

Then there's the fact that dentists are understandably not that objective when it comes to evaluating their own practices. You may "know" that your practice is worth more than the balance sheet shows, based on your history and inside knowledge of its potential. However, it's a simple fact that the value of your practice is defined by the marketplace, and it takes an objective outsider – one with specific knowledge of the dental market – to uncover your practice's unique attributes and give you an accurate picture of how your practice measures up in relation to others.

As a smart business owner, you want this kind of "how am I doing?" intelligence. You want someone who is a qualified expert to show you in concrete terms where the best opportunities are in your practice and what you need to do to optimize them.

It's not just about what your practice is worth on the market right now. It's about what that kind of knowledge is worth to you.


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