How to Evaluate a Dental Practice In Israel

Valuating a dental practice in Israel is a multifaceted process that requires careful analysis of various factors to determine its true worth. Whether you’re considering buying, selling, or transitioning a dental practice, understanding the valuation process is essential for making informed decisions and maximizing returns. There a will be practices of Oleh dentists who moved to Israel in the 1980’s and 1990’s coming on to the market in the next decade. While many are poorly run, there are some very good, efficient and profitable dental opportunities available. I have been practicing in Israel since 1988 and have a beautiful prosthetic practice that I have built over the last close to 40 years. If you are planning on making aliya and have any questions please don’t hesitate to whatsapp me at 972546336420 and I be happy to try and help.

1. Financial Analysis: Begin by examining the practice’s financial statements, including revenue, expenses, and profitability over the past several years. Consider factors such as patient volume, insurance reimbursements, and cash flow to assess the practice’s financial health and stability. In Israel all production includes 17% VAT and should be removed from any numbers when discussing the practice. The VAT is paid directly to the tax authorities every month. Including that in valuation skews the real income of the practice as it does not reflect the real income
2. Tangible Assets: Evaluate the tangible assets of the practice, including dental equipment, technology, and real estate (if owned). Determine the condition and market value of these assets to accurately assess their contribution to the overall value of the practice. Like anywhere you want to be sure things are kept in good conditions, that there are Israeli support systems and people to deal with equipment. Equipment that is not sold here will not have support. So a dentist who made aliyah with his US equipment might have difficulty in repair and upkeep.
3. Patient Base: A loyal and growing patient base is a valuable asset for any dental practice. Analyze patient demographics, retention rates, and new patient acquisition strategies to gauge the practice’s potential for future growth and sustainability.
4. Reputation and Goodwill: Assess the practice’s reputation within the community and its goodwill among patients. Positive online reviews, word-of-mouth referrals, and relationships with local healthcare providers can enhance the practice’s value and marketability.
5. Location and Market Trends: Consider the location of the practice and prevailing market trends in the area. Factors such as population demographics, competition, and economic growth can influence the demand for dental services and the practice’s long-term viability.
6. Regulatory Compliance and Risk Assessment: Ensure that the practice is compliant with all relevant regulations and licensing requirements. Assess potential risks, such as pending legal claims or regulatory issues, that could impact the practice’s value and reputation.

Practice Metrics

It is critical to have the numbers and statistics on how successful a practice is. Large production is not an indication of practice health or profitability. Efficiency, stable staff and profitability are reliable indicators of a healthy situation. A practice  that can not provide you with all of the financial details and metrics is a practice to be wary of.

In conclusion, valuating a dental practice requires a comprehensive approach that takes into account financial, operational, and market-related factors. By carefully assessing these key elements, dental practice owners can determine an accurate valuation that reflects the true worth of their investment and positions them for success in the ever-evolving healthcare landscape.