How is a dental practice valued?
A dental practice is valued by applying an EBITDA multiple to normalised earnings: profit before owner compensation, less the cost of replacing the dentistry the owner personally produces. That adjusted EBITDA sets the size band. Under $1M prices at 5x to 7x, $1M to $3M at 7x to 9x, $3M to $5M at 9x to 11x, and $5M or more at 10x to 12x.
Dental Practice Valuation Calculator
Most dental valuation rules of thumb start from a percentage of collections, which is how owners end up carrying a number in their head that no buyer will pay. Price is set by adjusted EBITDA and the size band it puts you in, and the largest single adjustment is the dentistry you produce yourself. This calculator asks for that first.
No email required. Nothing is stored or sent anywhere. The arithmetic runs in your browser and every step of it is shown next to the result.
Inputs
Your practice
Collections, not production. Buyers price what came in the door.
After lab, supplies, staff, rent and marketing, but before any owner salary, distributions or personal expenses.
What an associate would earn on your production, at whatever percentage you pay in your market, plus benefits. Use a real figure. There is deliberately no default, because associate comp varies too much by region for a guess to help you.
Anything a buyer will mark you down for
Any one of these typically moves a practice down a size band rather than shaving a fraction off the multiple.
Estimated range
Add your replacement cost.
You said you produce dentistry. Until we know what covering your chair time costs, any valuation would overstate your earnings, which is the mistake that makes an offer look better than it is.
Size bands, sub-specialty ranges and the risk factors come from Sorso’s dental EBITDA multiple research, which cites ADA Health Policy Institute among its sources. This is an estimate for planning, not a valuation opinion, and no real transaction should be priced from it.
Why a buyer subtracts your own production
In most single-location practices the owner is also the highest producer. The practice looks profitable because the person generating a large share of the dentistry is paid out of whatever is left rather than at an associate rate.
A buyer cannot inherit that arrangement. The day you stop producing, someone has to do that dentistry, and an associate takes a percentage of production plus benefits. So a competent buyer adds back everything you personally took out, because it is discretionary, then subtracts what your replacement costs. On a full clinical schedule with a modest owner draw, the second number is the larger one.
This is why two practices collecting the same amount can be worth very different sums. The one that already runs on associates has absorbed the cost. The one where the owner still produces four days a week has not, and the adjustment lands during diligence, usually after an offer has been anchored higher.
Dental practice valuation multiples by size
Scale drives the multiple more than anything else on this page. The same dentistry, delivered at four times the earnings, prices at roughly double the multiple.
| Adjusted EBITDA | Multiple | Typical buyer |
|---|---|---|
| Under $1M | 5x - 7x | Small DSO tuck-in |
| $1M - $3M | 7x - 9x | Regional DSO add-on |
| $3M - $5M | 9x - 11x | Emerging platform |
| $5M+ | 10x - 12x | Platform-grade transaction |
Sub-specialty layers on top of this. Orthodontics prices at 7x to 10x as an add-on, oral surgery at 6x to 9x, pediatric at 6x to 8x, and general single-location at 5x to 8x. Full sourcing, including ADA Health Policy Institute, sits on the dental EBITDA multiple research page. For other specialties use the general practice valuation calculator, or the physical therapy version.
Before you talk to a DSO
Consolidation means a practice of almost any size will find interest. Finding interest and holding a price through diligence are different problems, and the second one is decided by preparation you do beforehand.
Financials that reconcile to your tax returns. An add-back schedule you can defend line by line rather than a verbal claim that some of those expenses were personal. Associate and hygienist agreements that survive a change of control, because a buyer paying for earnings will discount hard if the people producing them can leave on day one. A lease with enough term that rent is not renegotiated in year two.
If an exit is more than a year out, the highest-return move is the one the calculator exposes. Every procedure you shift from your own hands to an associate converts owner income into transferable earnings, and transferable earnings are the only kind anyone applies a multiple to.
Common questions
How do you value a dental practice?
Normalise earnings first, then apply a multiple. Start with profit before any owner compensation, subtract what an associate would cost to replace the dentistry you personally produce, and the result is adjusted EBITDA. That figure decides your size band: under $1M in EBITDA prices at 5x to 7x as a small DSO tuck-in, $1M to $3M at 7x to 9x as a regional DSO add-on, $3M to $5M at 9x to 11x, and $5M or more at 10x to 12x for platform-grade deals.
What is the rule of thumb for dental practice valuation?
The old rule of thumb was a percentage of annual collections, and it is the reason a lot of owners carry a number in their head that no buyer will pay. Percentage-of-collections ignores whether the profit is real once the owner is replaced, and it ignores scale, which is the single largest driver of the multiple. Two practices collecting the same amount can differ by millions in value depending on EBITDA and who produces it.
What is the formula for dental practice valuation?
Adjusted EBITDA multiplied by the band for your size tier. Adjusted EBITDA is profit before owner compensation, less the market cost of replacing the owner's clinical production, less any other normalisations a buyer will insist on. The multiple then moves with sub-specialty, hygiene mix and risk factors such as Medicaid concentration or a short lease.
Does hygiene percentage affect what my practice sells for?
Yes. Practices where hygiene runs at or above 30 percent of collections price toward the top of their band. Hygiene revenue is recurring, less dependent on the owner personally, and it signals a patient base that returns, which is exactly the earnings quality a buyer is paying a multiple for.
What do DSOs pay for a dental practice?
It depends on which tier you land in rather than on DSOs having a single number. A single-location practice under $1M in EBITDA is a tuck-in and prices at 5x to 7x. Once a group reaches $3M or more in EBITDA it becomes a platform candidate and prices at 9x to 12x. That gap is created by scale rather than by clinical quality, which is why building to a second and third location is the highest-return exit preparation available to most owners.
What lowers a dental practice valuation?
Heavy Medicaid concentration in the payer mix, production concentrated in a single provider, and a lease with under five years remaining. Each of these tends to move a practice down a size band rather than shaving a fraction off the multiple, which is why their effect on price is larger than owners expect.
Want the number checked before you take an offer seriously?
A calculator gives you a range. It cannot read your payer mix, spot the add-backs a buyer will reject, or tell you whether your associate agreements survive a sale. Those are the things that move the final price.
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Founder of Sorso and a CFA charterholder. Before Sorso, Stan spent 19 years in corporate finance at institutions including UniCredit and Société Générale — managing a $450M loan portfolio and making senior partner at a major mezzanine lender by 29 — then built a fractional CFO firm exclusively for outpatient healthcare clinics.