Preparing your practice for sale should really begin three to five years prior to selling. Updating the technology in the practice is a must. That does not mean spending hundreds of thousands of dollars on the latest and greatest gadgets. It does means at least having digital x-rays and updated computers and software. Those are the minimum items you need for buyers to consider your practice “updated”.
Aesthetically, you should consider having an outsider come into the office to give their opinion on how the practice looks. Do you still have the original carpet from 1980 on the floor? Do you have orange laminate on the countertops? Is the paint on the walls chipped, or dated? If you answered yes to any of these, spend a few thousand dollars and replace the carpet, operatory flooring, paint the walls and updated the countertops.
To increase the value of the practice, you need to improve the cash flow of the practice. You may want to start by having your practice valued to see if the value is where you expect it to be, or want it to be. If it’s not, you will need to analyze the profit and loss statements to see how profitable your practice is. Have you continuously given your staff raises every year even though production has dropped by 20, 30, and even 50%? How do your ratios look? If you do not know or understand how to read a profit and loss statement, or know what the ratios should be, you should set up some time with your accountant, dental consultant, or advisor who can help you out. If your cash flow is not where it has been, or should be, you will need to identify opportunities in the practice to help improve the cash flow and thus the value.