What Is a Dental Practice Worth?

Most dental practices sell for roughly 2.0x to 3.6x Seller's Discretionary Earnings, with the midpoint around 2.8x. Another common shorthand is 60% to 80% of annual collections, though that rule ignores profitability and is easily misleading. A practice collecting $1.2M with $300K of SDE would typically land between $600K and $1.08M.

Start with SDE: net profit plus the owner-dentist's compensation, personal expenses run through the practice, interest, depreciation and any one-time costs. Multiply by an industry multiple adjusted for how much of the clinical production the owner personally performs. Owner dependence is the single biggest swing factor in dental.

Often yes, for larger practices. DSOs typically price on EBITDA rather than SDE and pay in the 4.0x to 6.5x range once earnings clear roughly $1M, but they usually require the selling dentist to stay on for a transition period and may structure part of the price as equity rollover.

There is no single average, because price tracks earnings rather than revenue. At the midpoint multiple of 2.8x SDE, dental practices at $500,000 of SDE sell around $1,400,000, and at $1,000,000 of SDE around $2,800,000. Typical SDE margin in this category runs near 18% of revenue, so a dental practice doing $1,000,000 in revenue would often carry about $180,000 of SDE and land near $504,000.

Take your Seller's Discretionary Earnings and multiply by 2.0x to 3.6x. Where you land inside that band is decided by owner dependence, customer concentration, recurring revenue and the quality of your books. A dental practice at the top of the range looks materially different from one at the bottom, and most of those differences can be improved in the twelve months before a sale.

SDE multiples of 2.0x to 3.6x apply to owner-operated dental practices. Once earnings pass roughly $1M to $2M of EBITDA the buyer pool shifts to private equity and strategic acquirers, and pricing restates onto an EBITDA multiple of 4x to 6.5x. The two are not comparable: SDE includes the owner's compensation and EBITDA does not, so the same business shows a higher SDE multiple than EBITDA multiple.

Typically 6 to 9 months from going to market to closing, assuming financials are ready. Dental sales run faster than most categories because lenders underwrite the sector confidently and buyers are pre-qualified associates. The gating item is usually the lease and whether the landlord will assign it, not the price.

There is no formula unique to dental practices. The method is the same one used across small business sales: recast earnings into Seller's Discretionary Earnings, then multiply by the industry band, which for dental practices is 2.0x to 3.6x. Three valuation methods exist in principle. The income approach, applying a multiple to earnings, is what nearly every real transaction uses. The market approach compares against recorded sales of similar businesses and works as a cross-check. The asset approach values equipment and inventory and generally sets a floor rather than a price.

Yes. The calculator on this page applies the same 2.0x to 3.6x band used throughout this guide, adjusted for owner dependence, margin quality and business age. It takes five inputs and returns a market range rather than a single figure, because real transaction prices move with deal structure and buyer type.

A market valuation estimates what a buyer would likely pay and is what you need to decide whether to sell. A formal appraisal is a certified document prepared to a defined standard, and is normally required only for litigation, divorce, estate and tax matters, or an SBA loan on the buyer's side. For planning an exit, a market valuation is the right instrument and is far cheaper.