We are regularly asked by sellers for tips on the best ways to increase the goodwill value of their dental practice. So, here’s one tip that should be relatively straightforward to implement……where possible, always deliver treatments (such as orthodontics, endodontics, periodontics or implants etc) in-house at your practice.
If you are referring work out, our advice would be to stop.
For example, let’s take a quick look at implants and how this could work in your favour if you were to deliver the treatments in-house.
If you refer out two treatments per month at £2,500 per implant (the average across UK is £2,415), that works out at £5,000 per month (or £60,000 per year).
If this generates a 30% profit that would be an additional £18,000 a year in your accounts.
For any valuation of a dental practice, we use a model that is based on a multiple of profit. So, if we use the figures in the example above, a profit of £18,000 x a multiple of 5, equates to £90,000 added to the goodwill value of your practice!
This is just one example, but if you’re keen to increase your goodwill value, think about your own practice. What services are you currently referring elsewhere? Could you deliver these in-house?
Our advice would be to use this simple principle and see what you could achieve with just a few changes to the way in which your practice operates.
And remember, by delivering more treatments in house you:
- Become a centre of excellence (which in turn will attract new patients to your practice).
- Drive up your turnover and profit.
- Add value to your dental practice.
- Your patients will spend more time at your practice, so you’ll develop deeper and more meaningful relationships with them.
We appreciate in some parts of the country finding clinicians can be challenging, but it’s worth the hard work and you could easily add £100,000 to the goodwill value of your dental practice.
As the saying goes, if it was easy everyone would be doing it!