If you’re a dental practice owner thinking about selling, or if you’ve received an unsolicited offer, you may ask, "Is this a fair price?"
The hard truth is that most dentists don’t know what their practice is worth. Unfortunately, buyers (especially DSOs) are happy to keep it that way. But with the right tools and benchmarks, you don’t need to wait for a broker or buyer to assign value to your life’s work.
I’ll show you how to get a clear, confident understanding of your practice’s value—before a buyer tells you what it’s worth.
Why dentists undervalue their practices
Most dentists rely on outdated rules of thumb: 70% of collections, three times EBITDA, etc. These shortcuts ignore things like growth trajectory, procedure mix, payer mix, hygiene efficiency, and team utilization. There are many different types of offices and operating styles. Most buyers, especially large groups, want the value low, so you are continually negotiating upward.
Stat callout: Business valuation resources’ Dealstats database shows that sales prices for offices ranged from 1.3 times to three times seller’s discretionary earnings from 1994-2023.1
Actionable insight: Stop relying on collection-based estimates. Instead, use your actual EBITDA data and review the last 12 months of financials side-by-side with your operational reports
The 5 drivers that really determine your value
1. Driver: EBITDA. Why it matters: The number one driver of a practice’s value, EBITDA measures true profitability of the practice.
2. Driver: Procedure mix. Why it matters: High-margin procedures increase value; routine procedures can drag it down; the ratio of high/low matters greatly for revenue consistency.
3. Driver: Hygiene productivity. Why it matters: Underutilized hygiene equals wasted capacity; 25%-30% of production is the benchmark. If hygiene is too low, it’s a sign of patient churn.
4. Driver: Payer mix. Why it matters: A DSO pays more for PPO/FFS-heavy practices vs. Medicaid-heavy ones.
5. Driver: Growth trends. Why it matters: Year-over-year growth signals scalability and low risk to buyers. Offices that have plateaued due to doctor schedules are prime targets for acquisition.
Actionable insight: Run a report on production per provider for the last 12 months and compare your hygiene versus doctor production. If hygiene is under 25%, you’re likely underperforming in an area of the practice that buyers scrutinize heavily.
How to get a real valuation, without a broker
- Use up-to-date KPIs from your practice management and financial systems. Track trends over time; one good month won’t fool a buyer.
- Add back any discretionary purchases (meals, travel, CE, malpractice insurance) and any depreciation or amortization to your net income to create the EBITDA number and multiply by the ranges presented above.
- Compare against benchmarks for your region, specialty, and office size, both in terms of operatories and production.
- Use a tool like Dental Practice Connect to generate an AI-powered valuation and side-by-side comparisons.
Actionable insight: Download your trailing 12-month reports (production, collections, expenses) and get them into a clean spreadsheet. Then benchmark them against specialty and regional averages using an external tool or valuation platform.
What to do once you know your number
- Use it to counter lowball offers or renegotiate equity deals by having a firm footing
- Understand whether you’re ready to sell now, or whether you should hold for one to three years to improve value.
- If working with a broker, use valuation as a check and balance that you own versus what is given to you.
Actionable insight: Build a “valuation improvement plan.” Set a six- to 12-month timeline to raise EBITDA, rationalize your expenses, or reposition your production and payer mix. Review progress every quarter with your team or advisor.
Don’t let someone else define your worth
Selling a dental practice isn’t just a financial transaction; it's part of your practice journey. But to get what it’s truly worth, you need more than gut instinct and generic rules of thumb.
Know your number. Track your benchmarks. And enter every negotiation with confidence.
Editor's note: This article appeared in the September 2025 print edition of Dental Economics magazine. Dentists in North America are eligible for a complimentary print subscription. Sign up here.
References
- DealStats. Business Valuation Resources. Accessed March 2025. https://www.bvresources.com/products/dealstats
- What it’s worth: Valuing dental practices. Business Valuation Resources. January 2025. https://www.bvresources.com/products/what-it-s-worth-valuing-dental-practices
- George L. Let’s talk dental valuation methods. Dental Practice Connect. May 18, 2025. Accessed June 2025. https://www.dentalpracticeconnect.com/case-studies/Dental_Valuation_Methods
