The 1st June has arrived and just in case you are feeling a bit down today, I have the perfect cure – guaranteed to put a smile back on your face.
All you need to do is spend a few minutes browsing practices for sale in your area on some of the independent valuers web sites.
I thought I had seen it all last September when a client showed me an offer letter for his mixed group at 8.25 times earnings, then again a few months ago when a well-known valuer estimated 8.5 times earnings for a well-established leafy suburban family practice.
Last week’s web site research was, simply, hysterical.
Here’s my own very rough and unscientific guide to what has happened to goodwill values since I arrived in dentistry back in 1993.
From the graph we can see the arrival of the new contract(s), the banking collapse of 2008 and the current hyper-inflation of practice prices.
So it begs yet again the question “when will this end?”
No doubt the market will be affected by the outcome of Bridgepoint’s latest attempt to sell Oasis and by the future of MyDentist.
I don’t propose to know the answer to the question. In fact I’m reminded of the Facebook troll who commented after my Dentistry Show talk on “Dentistry in 2026” that “if he’s so clever, why is he still working?”
There comes a point where the advice to an ambitious client who wants to build a hub and spoke micro-corporate might be to WAIT.
Wait until the bubble bursts?
Wait until MyDentist is broken up because it is too big to sell and not attractive enough to float?
Wait until after the gunfight at the Oasis Corral?
Wait until family money decides that there are other healthcare sectors or occupations that are more attractive for their children to explore?
Wait until Private Equity gives up on this diminishing herd of bewildered dental wildebeest and moves to the next watering hole?
I suppose that if we knew the answer to that question, we would make a killing.