Practice Valuation: DIY Estimates Cost You $100K. Get a Real Appraisal

Practice Valuation: DIY Estimates Cost You $100K. Get a Real Appraisal

Online dental valuation tools claim your practice is worth 0.75x revenue. That's a guess masquerading as analysis. Most practices aren't worth that. Some are worth double.

The truth: your practice value depends on what's actually portable. Do you have patient records that stay when you sell? That's 60-70% of your value. Do you have a real team that's not dependent on you? That's another 10-15%. Is your revenue stable? That multiplies everything. Do you have debt that transfers? That reduces value.

An independent appraiser costs $2.5K-4K. They produce a formal valuation using cash flow analysis, market comparables, and asset accounting. That number becomes your baseline for any sale, refinance, or divorce settlement.

The DIY path: apply online formula, negotiate blind, leave money on the table. The difference between a real appraisal and a guess usually runs $100K-300K for a typical solo practice.

When to do it: now if you're thinking about selling in the next three years. Not to sell immediately. To know your real position. Most appraisals arrive with a list of value drivers: "Fix your employee retention. That adds $80K. Raise your utilization. That adds $120K."

Action: Get a formal appraisal this fall if you're contemplating an exit. Use the gaps it identifies to improve value before you sell.

Sources: Dental Practice Valuation Association, broker interview data, exit transaction benchmarks