12 December 2022

9 Strategies to Boost the Value of Your Dental Practice

9 Strategies to Boost the Value of Your Dental Practice

The healthcare industry has experienced dramatic shifts in how practices and professionals operate with an ever-increasing trend to consolidate. Dentists have also hopped on board this train by joining dental service organizations (DSOs) and other large corporate groups. The decision to consolidate has partially been driven by the COVID-19 pandemic, and by a desire to sell and start up a new dental service or simply to retire altogether.

According to the American Dental Association, at least 1 in 5 dental professionals are members of a DSO. This number isn't all that surprising when considering the benefit of having your practice's administration and management handled by a larger organzation so you can focus on doing what you love: dentistry.

However, joining a DSO or simply selling your dental office requires a clear understanding of the market and the value it brings to the negotiating table. The better your valuation, the more advantageous your position will be during this process.

Why Average Values are Misleading

Why Average Values are Misleading

Have you ever tried to value your dental office? Most dentists think it's a simple matter based on how much money is collected. You take your collections, multiply them by the average for the area, and you have your answer, right? Not really.

The reality is that for many dental offices, their price-to-collections ratio averages around 75%. Yes, you read that correctly. Practices with monthly collections of $50,000 are left with just under $14,000 after overhead costs.

When you consider that most practices sell at 75-80% of their collections, it's clear that valuing your clinic in this manner isn't the full picture of its worth. And you're correct! No two dental practices are alike or interchangeable, like other commodities. You've worked hard to create a service that is unique and offers stand-alone features that your competitors can't compete against. This is why using your price-to-collections ratio is only a very rough estimate of your value, though it does provide a starting point for you to find ways to boost this number.

If you don't want to sell below average, you have to assess additional qualitative features that make it more profitable. If sales numbers aren't enough, factors like profitability and unique dental practice features can diminish the inevitable impact of your overhead costs. But how can you boost them?

Below are nine helpful tips to help you increase the value of your office:

1. You Need Comprehensive Reporting

You Need Comprehensive Reporting

You probably already have several financial reports each month to help keep an eye on spending and new patient numbers. However, it takes more than a handle on overhead and growth to understand where the value of your dental practice lies. You need to understand what services you provide are driving your business and which are underperforming. In short, you need data analytics to track key performance indicators (KPIs), such as:

  • Revenue growth trends
  • Case acceptance
  • Overhead
  • Patient retention and attrition
  • Practice production
  • Profit margins
  • Average production per patient
  • Practice Reputation
  • Percentage of scheduled active patients

Analyzing these numbers and how your profitability gets impacted can help you create a strategy for improvement and increase your dental practice's value.

2. Keep a Handle on Your Overhead

As the cost of business rises, you need to cut costs without taking away from the phenomenal experience your patients receive. The same can be said of your spending. You'll need to decide how to better your practice while trimming the fat from your costs and innovating your current administrative processes.

An end-to-end management platform for your dental practice can help balance staff workloads and boost productivity. Time is money in dentistry, and cloud-based practice management solutions like Adit can help your office reduce billable hours spent on non-billable administrative duties such as appointment reminders, billing, and eligibility verification.

Using automated tools to streamline every aspect of your clinic is one of the best ways to cut back on any overhead generated by inefficiency.

3. Protect and Increase Your Reputation

Protect and Increase Your Reputation

Have you ever been brave enough to Google your name? What about your dental practice? Did you learn anything new and helpful from what was said?

As more and more patients rely on the internet for reviews, your online presence could mean the difference between a trickle of new patients and a downpour. Effective marketing is crucial to patient growth, which boosts the value of your dental office. If your current PMS doesn't provide reputational management features like Pozative Reviews, there may be underlying issues hurting your brand.

You should also keep track of your referrals from both patients and your partners. This metric ensures you maximize growth and can show your clinic is highly marketable to potential buyers or groups interested in your brand.

4. Create a Patient-Focused Treatment Experience

Your balance sheet is not the only infographic potential buyers want to see. They want to know what the long-time viability and profitability of your business will be. For example, DSOs prefer practices that bring value to their organization. This includes creating consistently amazing patient outcomes and experiences. They also want to know how your office keeps people coming back.

While it's true that dental patients want the latest and greatest treatment technology, online payment processing, two-way texting, and virtual scheduling are also imperative to meet their expectations. When you have the right dental management technology in place, visitors enjoy a hassle-free visit that ensures they're getting the most out of your services.

Streamlining the check-in process by using electronic patient forms, sending automated appointment reminders via secure SMS, and offering a mobile app with patient portal access means your team has more time and focus for patients. These features also create a more personalized care experience that reviewers will rave about to anyone who will listen.

5. Invest in Your Practice

Invest in Your Practice

The truth is that dental care options are very similar no matter where you go. Patients will pay for whitening or extractions at a clinic with outdated treatment options or one that is sleek, new, and technologically advanced. While price plays a role in where they would prefer to go, the condition of the premises and the modernity of equipment and technique play a more important role. Your valuation should take this fact into account when looking for ways to improve this figure.

Office renovation changes everything, from the waiting room to the reception area and treatment rooms. Investing in an updated office can profoundly impact your valuation. If you have digital charting capabilities that can provide filmless X-rays, or your twenty-year-old treatment chairs get replaced, your practice value will enjoy a much-needed boost.

Keep in mind that investment doesn't end at new dental tech. Your practice management system is a crucial component in your toolbox that can transform how you operate. Instead of spending hours manually inputting patient intake information or personally tracking down team members to answer patient questions, a cloud-based PMS streamlines these processes.

Say goodbye to paper-based recordkeeping and discover automated integrations and intuitive features designed for the administrative side of a dental office.

6. Maximize Patient Engagement

Maximize Patient Engagement

Your practice value hinges on a variety of factors. However, without a strong patient base (and the ability to attract more), you'll find justifying your future selling price is an uphill battle. Engagement is a crucial component to successfully meeting patient acquisition and retention goals.

Consider setting up a patient survey that can be embedded in your communications. Also, rely on business analytical tools, like those provided by Adit, to track the effectiveness of your engagement efforts. If your current PMS doesn't have features such as call tracking to see which ad campaign or marketing channel patients respond to, you may want to consider upgrading.

Practice management software like Adit provides a wealth of comprehensive marketing tools that make it possible to track ad campaign performance, new patient treatment trends, case acceptance rates, and more.

7. Improve Your Collection Rate

Another way to make your dental clinic more valuable to potential investors and buyers is to boost your cash flow. One of the best ways to achieve this goal is to improve your collection rate. Practice management technology is your best friend in this regard because it streamlines the billing and payment process.

The ideal collection rate in the dental and medical industry is 96%. If your office isn't hitting this target, re-evaluate how your team bills and receives payments. Often, it's simply a matter of communication and flexibility behind slow pay situations.

For example, if your patients can only pay by mailing in a check or calling your front desk directly, this can create delays in your cash flow. Instead of waiting on the mail and then your bank to process a handwritten check, offering an online payment portal and text-based payment processing can create a faster turnaround and a more predictable revenue cycle.

The same can be said of letting patients call in and pay their dental bills. If their work schedule makes it impossible for them to reach out during business hours, your office has to wait until they have time off. This is not only frustrating but a time sink for your team members in wasted efforts trying to make arrangements to get paid.

Integrations like Adit Pay can streamline this entire process through automation. Create batches of invoices through self-populating billing templates that can be paid online, through SMS texting, via an in-office kiosk, and more.

8. Go Paperless

Go Paperless

Are you a paperless practice? If not, it's seriously time to consider becoming one. Not only does it free up tons of space by getting rid of all those hard-copy files, but you’ll increase your valuation at the same time. Dental clinics that operate efficiently by reducing overhead, provide an organized patient experience, and simplify the recordkeeping process by using features such as electronic forms and online patient portal access, are attractive to DSOs.

Remember, these organizations want to buy clinics that will add value to their existing network. By already implementing some of the best practices a DSO or buyer is looking for in a potential office, your value increases.

9. Focus on Treatment Compliance

Focus on Treatment Compliance

If you want to be shocked, sit down and look at how many of your dental patients fail to go through with treatment recommendations! This can be a frustrating aspect of owning a dental practice, especially when you aren't struggling to acquire new patients.

You want to see your chair filled regularly, not just when a dental emergency needs treatment. Treatment compliance is an element of your clinic valuation that deserves your full attention because this element affects everything from brand loyalty and reputation to the lifetime value of a patient.

To ensure your patients are on board with the type and frequency of oral healthcare your office recommends, you need to take the following steps:

  • Educate your patients on the importance of the recommended care
  • Automate appointment reminders and recall campaigns
  • Provide an online calendar that allows patients to book in real-time
  • Form a united front with your dental team regarding treatment expectations
  • Personalize messaging by including value-added content that applies to their oral health needs
  • Provide flexible payment options and multiple communication channels

Boost Your Dental Clinic's Value From Day One with Adit

To wrap up, there are many working parts to consider when trying to achieve the best valuation for your practice. Don't get wrapped up in rough estimations that only rely on your price-to-collection ratio. Your dental practice is a unique service that your patients count on and trust, making it a highly marketable and profitable organization.

Whether you're planning to join a DSO or just want to see how much your hard work is paying off, boosting your clinic's value requires having an outstanding dental team, sought-after treatment offerings, and tech-forward practice management tools. At Adit, our developers understand that creating a high-value dental business begins with a solid foundation based on creating satisfying customer experiences and efficient operations.

We offer over 15+ integrations in our platform designed to maximize productivity, improve patient outcomes, and give you in-depth insight into how your practice is performing in this highly competitive industry.

  • Adit Voice
  • Call Tracing
  • Automated Reminders
  • Online Scheduling
  • Patient Forms
  • Telehealth
  • Practice Analytics
  • Adit Pay
  • Patient Recall
  • Pozative Reviews
  • And more!

Our team of digital marketers has been in the dental industry for many years and shares your passion for creating a successful practice that provides outstanding oral healthcare. We never stop innovating, which means our cloud-based practice management software grows with you and is always up-to-date.

Start reclaiming lost productivity time of nearly 15 hrs/week and cut back out-of-control overhead with Adit. Schedule your demo today and learn more about how streamlining every aspect of your office can be seamless and rewarding from day one.

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Ali Jhaver

Ali Jhaver


After spending 10 years helping dentists grow their practices, Ali witnessed the time and money dentists were wasting on outdated, fragmented technology that negatively impacted sustainable growth and the overall patient experience. So he developed Adit - a user-friendly SaaS platform that centralizes everything a practice needs to operate and simplifies the business of dentistry so doctors can get back to the medicine.


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