Selling Your Dental Practice? How Much Is Your Website Worth?

A well-ranked, high-quality website is very valuable – have you accounted for it correctly?

Here at Dental Media we’ve been helping dentists with websites and marketing for well over 20 years and unsurprisingly, some of our long-term clients are now approaching retirement and selling up.

During handover discussions with some of them it became clear that they or their appointed sales consultant had failed to properly assess the value of their website in the sales negotiation and worse, often disregarded it completely.

Following the sale, it’s typical that the website domain name is re-assigned to the new owner plus a call organised with our team to discuss the ongoing management of the website. At this point the ownership of the website has effectively been transferred and there’s no going back – if the value of the site has not been previously discussed and agreed as part of the sale, then it’s too late.

So what is a website worth to a dentist? Well this depends on a couple of key factors as we’ll see in the following discussion.

Understanding the worth of a dental website

Hopefully this will be a useful discussion not just for those dentists who are selling up, but also those who are considering a new website and its optimisation for improving search engine rankings. Understanding the value of a practice website is important for anyone owning, managing or selling their dental business.

Firstly it’s important to say that there is no definitive way of calculating the real-time worth of a website given that there are quite a few influencing factors, e.g. location of the business, search positions in Google, age, conversion potential etc. Please note that I haven’t included the initial cost of the website there as this is usually misleading – quite a lot of very expensive websites are actually very poor when it comes to their effectiveness and hence looking at how much they cost would not be a good indicator of their actual value.

What are the key factors to consider to help determine the value of a website?

There are two main factors we look at when trying to make a dentist’s website as effective as possible and it makes sense that these are also key when trying to assess just how valuable that website is at a particular point in time:

• The potential of the website to convert users into patient i.e. how many people who visit the website actually go on to making an enquiry and subsequently become a patient
• How much traffic does a website get and what is the quality of that traffic i.e. how useful is that traffic when it comes to delivering new patient enquiries. This is directly related to how well the website ranks in Google.

It is also very important to understand that, on average, websites are only second to word-of-mouth referrals for gaining new patients. So they beat social media, paid ads, newspaper ads etc. As such it would be remiss not to understand their true value, and not just if you’re selling.

When considering the two main factors noted above, fortunately there is a good way to ascertain this using Google Analytics in conjunction with any manual monitoring which goes on at the practice. If the practice uses telephone call tracking, this will also provide important insights into how many enquiries came from the website.

Using Analytics we can quite quickly ascertain how many enquiries the website is delivering per month and also other key metrics to help us determine the amount and quality of the traffic to the site. Other data will also quickly tell us how well the website converts traffic to enquiries, a key measure of how well (or otherwise) the website actually works.

We should also look very closely at how well the website ranks in Google across a range of important search terms. This and the data above will give us a very good idea of the number of new patients coming into a practice as a direct result of the website.

To give an idea, our high-ranking clients will typically get anywhere between 10 and 60 new patients per month from their websites alone, depending on location.

How do new patient numbers translate into value?

This is not an easy thing to evaluate but we can generate some rules of thumb using the “lifetime value of a patient” model. This suggest that, on average, a spend of £400 per month on marketing which yields 4 new patients actually pays for itself. So where a practice spends £400 per month on marketing (actually quite a low figure) then any patients they gain over and above the 4 needed to pay that back, will be generating profit. At least they should be if the practice is being run correctly.

Now if we take the lowest number of new patients we typically see coming from our client’s websites (10), that gives us 6 new patients per month as clear profit generators. This is the “worst” case as it’s based on new patients receiving primarily general, lower profit treatments. Should some of those treatments be high value, then the valuation would be significantly better. But we have to start somewhere. Remember that the 10 patients used to illustrate is also at the lowest end of the scale – some of our clients generate many times this as mentioned above.

How much revenue does a dental patient deliver each year?

This will vary quite considerably from practice to practice and please remember that I am just giving some guidance on the type of calculations you need to do to ascertain the value of your website. You can substitute your own numbers accordingly.

For the purposes of illustration, let’s say that an average patient has a couple of hygiene sessions per year and some minor treatment – maybe £250 – £300 worth. This will almost certainly be towards the lower end of the scale, particularly so for those practices concentrating on aesthetic/restorative work. Let’s say that of that, £100 is net profit, again purely for illustration purposes. So for the example here, we are generating £600 net profit per month from the website alone. This is a very conservative figure and in reality it’s likely that successful websites for many practices are generating far in excess of this, potentially into 5 figures on a pure profit basis. This is also supported anecdotally.

We can use the usual business sale metrics to calculate the value of the website profit generation over 2, perhaps 3 years to give a very useful guide to the actual potential. In many cases that will be into the hundreds of thousands of pounds.

This needs to be compared to the situation where the new owner was starting from scratch with a new website and no search engine rankings. Even in the best case this can take a year or more to establish and even then, potentially requiring a significant initial outlay for a new website and large ongoing optimisation fees.

Summary

The value of a high-performing website with great Google positions is considerable and should not be discounted, particularly when it comes to sale time. By investing in a high-quality site and nurturing its ranking positions over time, you will be building a significant asset and a patient generating tool of considerable value.

Whilst the numbers I’ve used above are not absolute and for illustration purposes only, hopefully I’ve demonstrated the type of assessment you need to make when selling your business or indeed when considering an investment in a new practice website. The rewards can be very considerable indeed, so please understand the worth and don’t waste the opportunity!

If you need more help with anything website or marketing related, our team is here to help. Please call Dental Media on 01332 672548 for experienced assistance.