How much is a dental practice worth?

Short answer: two lenses, same neighborhood. General dental practices commonly change hands at 65–85% of trailing annual collections, and closed main-street sales average 2.75× seller's discretionary earnings (SDE). On $1.1 million of collections, both lenses land around $825,000–$850,000 in the worked example below. Dentistry is one of the few trades with real transaction data and its own pricing language — this page speaks both. Run your figures in the valuation calculator and see the dental practices industry page.

The number

The realized data: BizBuySell's trailing-five-year closed sales (Q3 2021–Q2 2026) put dental practices at an average of 2.75× SDE and 0.76× revenue, median sale price $350,000. The trade's working method runs alongside it: percent of collections. Practice brokers and transition advisers commonly work in a 65–85% of trailing collections range for general practices — the long-standing appraiser formula (Henry Schein and Paragon style) spans 60–90%, with the percentage stepping up as the practice's net margin improves.

A worked example, both lenses (SDE margin is an assumption):

• Annual collections: $1,100,000
• Lens 1 — collections: 75% × $1,100,000 = $825,000
• SDE margin, assumed: 28% → SDE = $1,100,000 × 0.28 = $308,000
• Lens 2 — SDE: $308,000 × 2.75 = $847,000

Two lenses, $22,000 apart — that is what a functioning market looks like. Where your practice lands inside the ranges depends on Section 2. The IBBA ladder (Market Pulse, Q2 2026) brackets the same territory by size: 2.8× SDE at $500K–$1M prices, 3.1× at $1M–$2M. And the proxy ceiling — public Hospitals/Healthcare Facilities companies at just 8.86× EV/EBITDA (Damodaran Online, January 2026) — reminds you that even scaled healthcare trades lower than software; DSO buyers paying EBITDA multiples for larger practices are pricing a platform, not a practice, and the two conversations should never be confused.

How buyers actually value a dental practice

Dental buyers — a young associate buying in, or a DSO rolling up — read a practice through four numbers. Collections, not production: what actually hit the bank after insurance write-offs, verified against tax returns and practice-software reports; production is a promise, collections are cash. Hygiene share: a healthy general practice runs roughly 30%+ of production through hygiene — it is the recurring-revenue engine, the recall system that refills the doctor's chair with diagnosed treatment, and the first thing an experienced buyer checks. A practice where hygiene is weak has a patient base that is quietly leaving. Payer mix: fee-for-service collections price at a premium; heavy PPO participation means the fee schedule is set by insurers, and Delta-heavy books get a second look for concentration; Medicaid-heavy practices price on a different planet entirely. Active patients and flow: patients seen in the last 18 months, new patients per month, and whether the selling doctor's schedule is the practice — a buyer dentist can inherit charts, but not hands. Overhead is the quiet fifth number: the trade's working target is around 60% of collections excluding doctor pay; every point above it comes out of the earnings the buyer is pricing. Equipment age (digital sensors, CBCT, chairs) adjusts at the margins; goodwill — the patient base's willingness to stay — is the asset.

What raises the price — and what kills it

Raises it:

• Hygiene at or above ~30% of production with a recall system that demonstrably refills chairs
• Fee-for-service or light-PPO payer mix with fees at or above market — room the buyer can see
• Overhead trending toward 60% of collections, with three clean years of returns and reports that match
• An associate or a seller willing to stay on through transition — production that does not walk out
• Active patient count growing, with new-patient flow not dependent on one referral source

Kills it:

• The selling doctor is 80% of production and retiring at closing — the buyer is purchasing charts and hope
• Collections falling three straight years, whatever the explanation
• One PPO contract as the majority of revenue, terminable on sale
• Production numbers that do not reconcile to collections, returns, or bank deposits
• Deferred everything: aging chairs, no digital imaging, a lease with 18 months left and no option

Move your number

The levers map to the four numbers above. Collect what you produce: insurance receivables chased down, patient balances collected at checkout instead of by mail, and card/ACH payment options with sane economics shrink the production-to-collections leak — the Finix payments team is our route for that work. Run recall like a system: reactivation campaigns for lapsed patients, hygiene rebooking reminders, and treatment-plan follow-up that happen automatically are an operations build — ClaroPro's lane, and the most direct way to grow the hygiene share buyers pay for. Make the practice legible: collections, payer mix, hygiene share, and active-patient counts living in clean reporting a buyer's lender can underwrite — not exported in a panic during diligence — is the kind of system a Nova engineering team builds on top of your practice software. Baseline first: run the calculator.

This is an educational framework with shown math, not an appraisal — dentistry has certified appraisers and lender underwriting for a reason, and a competitive process with real buyers will find the true number. The caveats are printed plainly because they protect you, the owner: from overpaying for a practice whose collections were really production in disguise, underselling a hygiene engine you spent a career building, or letting a DSO's platform math talk you out of your practice's actual main-street value. A real price is set by a real buyer on a specific day, after their lender has read your collections reports.