Practice valuations are increasing – the goose is getting fatter

If you had asked me to value a UK dental practice anytime from 1997 to 2005 I would have answered: “35% of gross revenues plus £10,000 per dental surgery.” If you had asked me in January 2007, I would have answered: “NHS practice – zero. Private practice 35% plus £10k per surgery.” If you had asked me 3 weeks ago, I would have said: “NHS practice – zero. Private practice 66% plus £10k per surgery.” Yesterday, a former client called me to ask whether he should consider an offer to buy his private practice – at 90% of gross revenues. Bearing in mind his age and profile I suggested that now would be a good time to take the offer. Where’s the smart money then?

1. Buying NHS practices for nothing, buying the freehold, converting to private, selling the goodwill, keeping the freehold;

2. Building your private practice for sale – and keeping the freehold;

3. If you are an associate – buying NHS for conversion or delipidated private for improvement.