MediEstates - How to Ensure an Evidence-Based Valuation for Your Dental Practice Sale
How to Ensure an Evidence-Based Valuation for Your Dental Practice Sale

How to Ensure an Evidence-Based Valuation for Your Dental Practice Sale

Selling your dental practice can be a complex process that requires careful consideration and planning. One of the most important aspects of selling your practice is obtaining a realistic and evidence-based valuation. An accurate valuation can help ensure that you attract the right buyers and receive offers that are in line with your asking price. In addition, an incorrect valuation can lead to significant problems down the line, potentially putting the entire transaction in jeopardy.

Why an Evidence-Based Valuation Matters

When it comes to valuing your dental practice, there are two critical reasons why it should be evidence-based. Firstly, an overestimated or inaccurate valuation can make it difficult to attract interest in your sale or receive offers that match your asking price. This can result in your practice staying on the market for a longer period than necessary. Secondly, an incorrect valuation can lead to problems later on. Banks typically require an independent valuation of the practice to ensure that it aligns with the purchase price. If the valuation is lower than the purchase price, the bank may refuse to lend, putting the entire transaction at risk.

Gathering Evidence for Your Valuation

To ensure that your valuation is as accurate and evidence-based as possible, it's essential to gather relevant information before your practice goes on the market. A dedicated dental practice broker can help you with this process, ensuring that you have all the necessary data to make informed decisions.

Adjusting Earnings

One of the first steps in valuing your practice is calculating your earnings before interest, tax, depreciation, and amortization (EBITDA) and making any necessary adjustments to the profit and loss account. This process involves removing any personal costs, such as personal motor expenses, and accounting for any one-off costs in a given year, such as a new IT system or treatment centre.

Incorporating Anticipated Financial Changes

To ensure an evidence-based valuation, it's important to incorporate anticipated financial changes before they happen. For example, adjustments to the minimum wage, changes in staff pension contributions, or inflationary increases for practices with NHS contracts.

Commercial Property Rates

If you're planning to retain the freehold of your practice building, a broker can compile a comprehensive, evidence-based report on commercial property rates in your local area. This can help ensure that your rental expectations are realistic and in line with market rates.

Different Valuations for Different Buyers

Depending on whether your practice is being purchased by an individual dentist or a group/corporate provider, there may be different operational costs and valuations associated with the sale. A broker can take these factors into account when determining your valuation.

Determining the Valuation Multiple

Once the necessary adjustments have been made to your figures, a valuation multiple is applied to determine the overall value of your practice.


To ensure an evidence-based valuation, several different factors are taken into account, including:

- Bank valuations: It's essential to understand how banks value practices since most transactions require some degree of bank funding. A broker can keep in regular contact with major banks' specialist lending teams and underwriters to understand the levels of lending they're willing to provide and mitigate the risk of the transaction falling through.

- Market data: Comparing your practice's location with recently sold practices in the surrounding area can provide valuable insights into how many buyers were interested, the number of viewings, and the level of offers received.

- Benchmarking: Comparing your practice's performance to other similar practices nearby can help identify areas of overspending or underspending.

- Buyer intelligence: Regular meetings with group/corporate buyers can provide insight into their buying criteria based on their strategies and targets.

- Trend analysis: Monitoring the average prices and level of goodwill for NHS, mixed, and private practices across the country can help identify changes in goodwill


Why not call us today to get the conversation started?


Posted by: Junaid Mumtaz on

General Buyer Terms 

This agreement is in relation to MediEstates Limited whose registered office is at 1st Floor, Pacific House, Stanier Way, Wyvern Business Park, Derby, DE21 6BF acting for and on behalf of our clients ("the Vendors"); and yourself (Buyer's Name) in relation for an introduction to a prospective sale of a business as a going concern. By registering through this agreement I agree to all terms set out below:

  1. Definitions
    In this Agreement the following terms and phrases shall have the following meaning unless the context otherwise requires:

    Dental Practice business providing dental care. This business is under the MediEstates Ltd sale terms.
    Confidential Information
    Means the actual Vendors identity and all confidential information in respect of the Business, including, but not limited to, any ideas, business methods, prices, accounts, finance, marketing, research, development, manpower plans, processes, market opportunities, intentions, design rights, product information, customer lists or details, employees’ details, trade secrets, computer systems and software, and other matters connected with the products or services manufactured, marketed, provided or obtained by the Vendor, and information concerning the Vendor’s relationships with actual or potential clients or customers and the needs and requirements of such clients’ or customers’ operations.
  2. Obligation of Confidentiality
    The Prospective Purchaser agrees to treat as confidential, information supplied by or on behalf of the Vendor in connection with the sale of the Business.
  3. Exclusions
    The obligation of confidentiality set out in clause 2 does not apply to:
    1. any information received from a third party who was legally free at the time of disclosure to disclose it;
    2. any information which was already lawfully in the Prospective Purchaser’s possession prior to receiving it from MediEstates Ltd on behalf of the Vendor; and
    3. any information which is in its entirety already in the public domain.
  4. Duties of Prospective Purchaser
    1. The Prospective Purchaser shall take such a reasonable security measures to protect the Confidential Information and trade secrets.
    2. The Prospective Purchaser shall not, without the prior written consent of the Vendor, permit any of the Confidential Information:
      1. to be disclosed, other than in confidence to its legal or professional advisors;
      2. to be copied or reproduced;
      3. to be commercially exploited in any way;
      4. to be used for any purpose other than in connection with the prospective purchase of the Business;
      5. MediEstates is registered under the Data Protection Act 2018. Upon Signing this agreement you agree to follow the legal obligations of this act to protect the details of the information supplied to you, with it no to be passed outside of the control of you the prospective purchaser.
    3. The Prospective Purchaser agrees to keep a record of Confidential Information received.
    4. The Prospective Purchaser will return to MediEstates or the Vendor all documents containing Confidential Information and all copies of those documents on demand at any time which are in its possession or under its control, and for this purpose the term “documents” includes computer discs and all other materials capable of storing data and information. The Prospective Purchaser agrees that such documents remain the property of the MediEstates on behalf of the Vendor.
    5. The Prospective Purchaser must not jeopardise or re-direct the sale under any circumstances.
    6. The Prospective Purchaser must not contact the Local Area Team or CCG regarding any practice sale, by any means of media unless written permission is granted from the Vendor.
    7. To carry out own due diligence on practice purchases and accepts that any information MediEstates has supplied is information provided by the vendor and is not responsible for its accuracy or completeness.
  5. This Agreement
    The existence of this Agreement and its terms are confidential and neither MediEstates nor the Purchaser may disclose anything about this Agreement or its subject matter or implementation to any person other than in confidence to their legal or professional advisers.
  6. Duties of Prospective Purchaser
    When buying Dental practices, finance is normally needed. Our organisation operated over more than one of the MediHoldings brand, by completing this from you agree that the information can be shared to our other organisations to avoid the need to register independently and provide the best possible service.

    MediEstates will refer you to the specialist dental lending team and MediFinancial who will contact the necessary banks, whom have preferential healthcare lending rates in some cases, to ascertain which funding is available to you.
    By signing this agreement you do not have to use any of the banks MediFinancial contact, it is just another service which we provide.
  7. Deposit for Dental Practice
    If you are interested in putting forward a formal offer in for a practice, once the offer is accepted there will be a deposit required to secure the practice sale which is dependant of the practice size. This deposit is held in a client account and will be returned to the buyer on completion of the practice sale. You the buyer, will be required to sign a deposit schedule which will cover the buyer and the seller in the event that the practice sale does not proceed.
  8. Changes to this Agreement
    Any changes made to this agreement must be authorised and signed by one of MediEstates Ltd Directors.
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