CDA Essentials 2017 • Volume 3 • Issue 5

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35 Volume 3 Issue 5 |
Supporting Your Practice
It’s a seller’s market for dental practices according to Dr. Bernie Dolansky,
transition consultant, partner and sales representative at Tier Three
Brokerage, a firm specializing in the evaluation and sale of dental practices.
In most areas of Canada, having more buyers than sellers is driving an
increase in dental practice values. But what factors are the best predictors
of dental practice value in today’s market? We spoke with Dr. Dolansky,
a CDA past-president in 1992-93, to get his perspectives.
The most valuable commodity
As evaluators of dental practices, we have to look at all the factors that any reasonably well-
informed buyer would want to know about a practice. By far the most valuable part of a
general dental practice in today’s market is, quite simply, its patients. Active patients, defined
as patients on regular recall who have been seen in the last 12–18 months, are particularly
valuable. In most parts of Canada, we have too many dentists and not enough patients, and
that’s what is driving the market.
Traditional views of practice evaluations are changing
For a general dental practice, cash flow is related to the patient lists or charts. Up until about
four years ago, we based our evaluations of dental practices on past gross revenues—usually
an average of the previous three years. But buyers today are more sophisticated and are
interested in future projections of cash flow. Today, the possible future cash flow that can
be derived from those valuable patients is the major determinant of value for an informed
buyer.
The challenge of predicting revenue
Future cash flow seems like a simple concept: it’s future revenue minus future costs. But how
do you predict future revenue per patient per year? Well, current revenue can be a very good
Bernie Dolansky
Dr. Dolansky practised as
an endodontist for over
35 years. He also served
as president of CDA,
the Ontario Dental
Association and the
Dentistry Canada Fund.
This interviewhasbeencondensedandedited.
Theviewsexpressedarethoseoftheauthor
anddonotnecessarilyreflecttheopinions
orofficialpoliciesoftheCanadianDental
Association.
By far the most valuable part of a general dental practice in today’s
market is, quite simply, its patients.
What are the main drivers that
make a dental practice valuable?