Dental practices are highly sought after by both individual dentists and dental service organizations (DSOs). With strong recurring patient bases and predictable cash flows, dental practices often command premium valuations compared to other healthcare businesses.
How Dental Practices Are Valued
Dental practices are typically valued using a percentage of annual collections or a multiple of SDE. The method depends on practice size, profitability, and buyer type.
Typical Dental Practice Valuation Multiples
Dental practices typically sell for 60-80% of annual collections or 2.5x to 4.0x SDE, depending on:
- Active patient count and patient demographics
- Fee-for-service vs. insurance-heavy mix
- Location and facility condition
- Equipment age and technology adoption
- Staff stability and associate dentist presence
What Drives Dental Practice Value
Buyers pay premium prices for dental practices with:
- Strong active patient base - Large number of patients seen within last 18-24 months
- Fee-for-service revenue - Higher percentage of non-insurance patients
- Modern equipment - Digital x-rays, CAD/CAM, updated operatories
- Hygiene production - Strong hygiene department generating 30%+ of revenue
- Desirable location - Good visibility, parking, and demographics
Common Value Detractors
These factors can lower your dental practice valuation:
- Declining patient count or high patient attrition
- Heavy Medicaid or low-reimbursement insurance mix
- Aging equipment requiring significant capital investment
- Unfavorable lease terms or dated facility
- High owner production with no associate
What's your dental practice worth?
Get a free estimate using our valuation calculator. Takes about 60 seconds.
Calculate My ValuationPreparing Your Practice for Sale
To maximize your dental practice value:
- Maintain and grow your active patient base
- Invest in modern equipment and technology
- Build a strong hygiene department
- Consider adding an associate to reduce owner dependency
- Secure a favorable long-term lease
The dental industry is experiencing significant consolidation, with DSOs actively acquiring practices across the country. Solo practitioners and small groups remain attractive targets for both individual buyers and larger organizations seeking quality practices with growth potential.