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Three ways to value the same dental practice, and why they do not agree

One practice, three measures, two buyers. Picking the wrong measure changes the answer by more than any negotiation will.

9 min read

The question is which buyer is asking

Dental practices sell into two different markets, and the two do not price the same way. An individual dentist buying a practice, often with SBA financing, is buying a job and an income. A dental service organization buying a location is buying earnings that continue after the selling dentist reduces hours or leaves.

Those are different assets built from the same practice, so the industry uses different measures for each. Before comparing your practice to anything published, the first question is not what the multiple is. It is which measure the number is stated against, and which buyer it describes.

Three measures for one practice

Dental Practice Insider, writing in 2026, sets out three conventions side by side and attaches each to a different transaction type.

A percentage of annual gross collections, which it puts at 60 to 75 percent of gross for a general practice in a private sale, and which it describes as the fastest directional estimate and the one most commonly cited by dental brokers.

Owner earnings, which it puts at 1.2x to 2.5x for a solo general practice in a private sale.

EBITDA, which it puts at 3.5x to 5.5x, and which it attaches specifically to acquisitions by dental service organizations.

Those three describe the same practice. They are not alternative opinions about a single number. They are three different questions, and each has its own answer.

The detail that changes everything: whose earnings

The EBITDA convention carries a condition that is easy to miss and expensive to get wrong. Dental Practice Insider states that the 3.5x to 5.5x range applies to post replacement dentist EBITDA. That means earnings calculated after paying someone to do the selling dentist's clinical work.

For an owner operated practice that is not a small adjustment. Owner earnings include everything the practice paid the dentist. EBITDA on this definition removes it and substitutes the market cost of a replacement. The two numbers can differ by most of the owner's compensation.

So a dentist who takes their owner earnings figure and applies a published EBITDA multiple to it is not making a rounding error. They are applying a multiple built for one number to a number that is structurally larger. The result overstates, and it overstates by more the higher the multiple goes.

This is the single most common way an owner arrives at a figure their buyer will not recognise.

The publishers also disagree about which convention is current

Dental Practice Insider treats percent of collections as the working convention for private sales and reports it first.

Dental Pitch Brokerage, published 30 April 2026, takes the opposite position. It presents EBITDA multiples as the 2026 standard replacing collections based approaches, and publishes no percent of collections range at all.

That is not a disagreement about a number. It is a disagreement about which method the market uses, published four months apart. An owner reading one page and an owner reading the other would prepare for entirely different conversations.

A third axis: banded by revenue, reported on earnings

Dental Pitch Brokerage bands its EBITDA multiples by practice revenue rather than by earnings. It publishes 3x to 5x EBITDA for practices under $1M in revenue, 5x to 7x for $1M to $3M, 6x to 8x for $3M to $5M, and above 8x beyond that.

Banding on one measure while reporting a multiple of another is common and it is not wrong, but it means two practices with identical earnings can sit in different bands because their revenue differs. Collections, revenue, and earnings are three separate things in a dental practice, and the published record uses all three.

The one place the record does agree

A fourth source reports on this vertical, and it is the only one here drawn from completed transactions rather than from advisory guidance. BizBuySell transaction data covering 2021 through 2025 reports that the middle half of dental practices recorded as sold fell between 1.60x and 3.37x owner earnings.

Set that against Dental Practice Insider's 1.2x to 2.5x owner earnings for a solo general practice and the two bands overlap across most of the narrower one. On the owner earnings measure, and only there, the published record corroborates itself.

That is worth stating plainly, because it locates the disagreement precisely. The sources do not contradict each other about what an owner operated dental practice is worth to an individual buyer. They contradict each other about which measure to use and which buyer to describe. An owner working in owner earnings has two independent sources behind them. An owner reaching for an EBITDA multiple is crossing into a different measure, a different buyer, and a record that stops agreeing.

What the buyer difference looks like in collections terms

The clearest illustration of the two markets sits inside a single publisher. Dental Practice Insider puts a general practice in a private sale at 60 to 75 percent of collections. It puts a dental service organization target at 90 to 120 percent of collections.

Same practice. Same collections. The buyer changes and so does the answer, on the one measure that is directly comparable between them.

That gap is not a negotiating range. It reflects that the two buyers are acquiring different things. One is buying a practice to work in. The other is buying earnings that must survive the selling dentist leaving, which is why its diligence concentrates so heavily on whether they will.

Why we do not reconcile these

Verelume's estimator reports this vertical as carrying conflicting evidence, and it does not average the sources or convert between the measures.

Converting would require assuming a replacement dentist cost, an owner compensation figure, and a collections to revenue relationship, none of which are published and all of which vary by practice. Producing a single number from those assumptions would manufacture a figure and present it as sourced. That is the failure the whole method exists to prevent.

So the tool leads with what dental practices actually sold for, which is the one figure here drawn from completed transactions, and puts the full record beneath it: each publisher, the measure it used, the buyer it applies to, and the date. The disagreement is reported rather than resolved.

What a group buyer examines

Diligence from a dental service organization concentrates on whether production survives the owner and whether the reported numbers reconcile to each other.

  • Production by provider, with the owner dentist separated from associates and hygiene
  • Collections reconciled to production, and the write off history behind the gap
  • Insurance participation, plan mix, and the fee schedules actually in force
  • Active patient definition, how it is counted, and hygiene recall performance
  • Associate agreements, compensation terms, and non compete and non solicit provisions
  • Premises lease term, options, and whether it survives a change of ownership
  • Equipment age, service history, and any finance or lease obligations
  • Which procedures the owner performs that a replacement would need to cover

What to do before either buyer arrives

The preparation that protects value is not selecting the most flattering published multiple. It is making sure the practice record answers the questions above consistently, because the fastest way to lose credibility in diligence is for two of your own documents to disagree.

Verelume reads contracts, financials, and operating records and reports what the record supports, where documents conflict, and where a claim has no documentation behind it. It applies to a practice record the same standard this article applied to the published multiples. Where the evidence holds, it says so and shows it. Where documents disagree, it shows the disagreement. Where nothing supports a claim, it says that too.

Knowing which measure your buyer uses is the first step. Knowing that your own record supports the number you put against it is the one that survives diligence.

Frequently asked questions

What is a dental practice worth as a multiple?
It depends on the measure and the buyer, and published sources do not agree. Dental Practice Insider, writing in 2026, publishes 60 to 75 percent of annual gross collections or 1.2x to 2.5x owner earnings for a solo general practice in a private sale, and 3.5x to 5.5x EBITDA for a dental service organization acquisition. Dental Pitch Brokerage, published 30 April 2026, publishes 3x to 5x EBITDA for practices under $1M in revenue, rising with revenue. BizBuySell transaction data for 2021 through 2025 reports the middle half of recorded sales between 1.60x and 3.37x owner earnings. These are different measures and are not directly comparable, though the two owner earnings sources overlap across most of the narrower band.
Why is the EBITDA multiple applied to a smaller number than owner earnings?
Because the published EBITDA convention for dental practices is stated after paying a replacement dentist. Owner earnings include everything the practice paid the selling dentist. The EBITDA figure removes that and substitutes the market cost of someone doing the same clinical work. For an owner operated practice the difference can be most of the owner's compensation, which is why applying an EBITDA multiple to an owner earnings figure overstates value.
Is percent of collections still used to value dental practices?
The publishers disagree. Dental Practice Insider describes percent of collections as the fastest directional estimate and the one most commonly cited by dental brokers. Dental Pitch Brokerage presents EBITDA multiples as the 2026 standard replacing collections based approaches. Both positions were published in 2026.
Why do DSOs pay more than private buyers for the same practice?
They are buying a different asset. A private buyer is acquiring a practice to work in. A group buyer is acquiring earnings that must continue after the selling dentist reduces hours or leaves, and it prices and finances at a different scale. On the one directly comparable measure, Dental Practice Insider puts a private sale at 60 to 75 percent of collections and a group target at 90 to 120 percent.
What does a DSO check during diligence?
Whether production survives the owner, and whether the reported numbers reconcile. That means production separated by provider, collections reconciled to production with write offs explained, insurance participation and fee schedules in force, active patient counts and hygiene recall, associate agreements and their non compete terms, the premises lease and its assignment provisions, and which procedures a replacement dentist would need to cover.

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