Selling a dental practice: questions owners ask

Dental practices sold on BizBuySell from 2021 to 2025 went for 1.60 to 3.37 times seller's discretionary earnings (SDE) in the middle half, median 2.48. SDE includes your own pay as the owner-dentist. Across those sales, median SDE was about $150,000 on median revenue of about $558,000.

Revenue multiples are only a cross-check for a dental practice. The same sales went for 0.51 to 0.86 times annual revenue in the middle half (median 0.70), and BizBuySell says revenue multiples are used together with an earnings analysis. BizBuySell also says, as an illustration drawn from the same quartiles, that a practice consistently above $800,000 in annual revenue may sell for around 3.4 times SDE or more, and one below $300,000 closer to 1.6 or less.

DSO and private equity offers are quoted as multiples of EBITDA, a different measure, so never set them beside BizBuySell's SDE range.

What dental practices sell for: SDE, collections and EBITDA, with sources

The best-known rule of thumb prices a practice at about 70% to 85% of the prior year's collections. Ken Rubin, a dental CPA and broker, described it that way in Dental Economics in 2016 and called it only an extremely rough starting point. The ADA's 2013 valuation guide says a rule of thumb can help with quick, general decisions but should never be used to make the final determination of a practice's value.

The reason is overhead. In a hypothetical from Henry Schein Dental Practice Transitions (2021), two practices each collect $1,000,000, one at 50% overhead and one at 70%. An 80% rule values both at $800,000, but the lower-overhead practice is significantly more valuable because of its larger profit.

In one advisor's experience the range is wider: a May 2026 Cain Watters post by valuation CPA Christy Ratcliff puts practice values from actual valuations at roughly 64% to 96% of collections, and says profitability, not collections alone, drives that spread.

Why percent of collections is only a starting point

One sell-side advisor's published range, not closed-sale data, puts general dentistry DSO add-on acquisitions at roughly 5 to 8 times EBITDA and platform acquisitions at 9 to 11 times (FOCUS Investment Banking, 2026 whitepaper, marked for educational purposes only).

TUSK Practice Sales, a dental M&A advisor, said in a July 2026 press release that it expects dental practice multiples to compress from about 5 to 9+ times EBITDA toward 4 to 6 times, without saying which buyers that range covers.

Apply these multiples only to EBITDA, never to your SDE, and never turn one into a percent of collections.

One DSO, MB2 Dental, states its own preference on its website (accessed October 2026): it usually partners with practices that have over $1.25 million in revenue and five or more operatories.

How a DSO values a practice on EBITDA

Profit, more than collections. The ADA's 2013 valuation guide says buyers generally will not pay much for a practice with a very high overhead rate, especially when the buyer can do little to reduce it.

FOCUS Investment Banking (2026 whitepaper) says DSO and private equity buyers treat hygiene revenue as the most recurring part of a practice's EBITDA, may discount a practice that relies heavily on one doctor, value a balanced commercial and PPO payer mix most, and look hard at Medicaid exposure and cash-pay concentration.

Buyers check the office and the books too. Ken Rubin, a dental CPA, wrote in Dental Economics in 2016 that a good, transferable office lease is critical to value. ADA guidance tells buyers to flag receivables above two months of production, accounts in collections, or a high balance more than 90 days past due. Henry Schein Dental Practice Transitions (2021) says that, all else being equal, a practice with state-of-the-art equipment is worth more than one with 20-year-old equipment.

None of these sources puts a percentage on them. Treat them as the questions a buyer will ask about your hygiene program, payer mix and how much of the dentistry depends on you, not as price adjustments.

What moves a dental practice up or down the range

Orthodontic practices raise one issue a general practice does not: contracts receivable. Orthodontic consultants Ken and Ryan Alexander, writing in Orthotown in November 2024, estimate that balance averages about 55% of yearly collections, and say even major appraisers cannot agree on how much should be left for the buyer to collect before value is reduced. One November 2025 Journal of Clinical Orthodontics editorial said corporate groups often value orthodontic practices at around seven times EBITDA.

Referrals matter for an orthodontic practice's value. The same consultants tell buyers to ask whether any single source makes up more than 10% of new-patient referrals, and to investigate if 15% or more of the practice is referred from one pediatric or dental practice.

Some specialists are more often affiliated with DSOs than general dentists. In 2024, ADA Health Policy Institute data showed about 23% of orthodontists, 22% of oral surgeons and 21% of endodontists affiliated with a DSO, against about 15% of general dentists. HPI says its method slightly undercounts DSO affiliation.

Selling a specialty dental practice: receivables, referrals and platforms

Compare how you get paid and what you sign, not only the price. A dental CPA quoted by ADA News in December 2024 described three ways to sell: to an outside dentist, to an associate or to a DSO. BizBuySell notes that new owners of dental practices are often limited to qualified dentists, and says many of the larger practices that sold in 2025 went to private equity firms.

A DSO offer often comes in pieces. Oberman Law Firm, a dental law firm, says a typical DSO offer may combine a lump-sum buyout (often 60% to 90% of practice value), an earn-out paid over several years, an employment or service agreement and possible equity in the DSO.

In one common structure the ADA describes in a guide updated January 2021, a professional entity typically buys your clinical assets, the DSO buys the non-clinical assets including goodwill, and you become a salaried employee. The ADA says such a sale is generally irrevocable, and that taking DSO equity can mean a longer employment term and less ability to leave.

An ADA career article says dentist buyers rely heavily on bank financing. If that is an SBA 7(a) loan, SOP 50 10 8.1 (effective October 1, 2026) can limit how much of the price is borrowed, when your seller note is paid and whether you can stay on.

Selling a dental practice to a DSO: cash at close, earn-outs and equity

Selling to an associate or another dentist

It depends on your state. Florida lets only a licensed dentist, or a professional corporation or LLC of dentists, employ dentists or hygienists in a dental office, and a separate provision bars a non-dentist from controlling treatment, patient records, pricing and advertising policy, or personnel and office hours (Fla. Stat. 466.0285).

Texas treats anyone who owns or operates an office that employs or contracts with a dentist as practicing dentistry (Tex. Occ. Code 251.003(a)(4)). Arizona lets a business with any non-dentist owner offer dental services only if it registers with the Arizona State Board of Dental Examiners and licensees perform the services (A.R.S. 32-1213).

The rules also limit what a management company can control. Since January 1, 2026, California bars private equity groups and hedge funds involved with a dental practice from controlling listed matters such as patient records, payer contracting terms, and coding and billing, though they may assist or consult if the dentist keeps ultimate responsibility for those decisions (Cal. Health and Safety Code 1191, SB 351).

The ADA's DSO guide (updated January 2021) says that, depending on state law, a practice may need to be owned by a PC or PLLC that is itself owned by licensed dentists.

These summaries cover only the states named, as of October 2026, and are general information. Confirm your state's rules with healthcare counsel before you sign with a buyer who is not a dentist.

Who can own a dental practice: state rules and what you sign

A dental practice sale usually takes months, not weeks. A dental CPA quoted by ADA News in December 2024 estimated that the sale process generally takes about a year.

Time on the market is only part of it. Dental practices sold on BizBuySell from 2021 to 2025 spent a median 215 days from listing to sale, and the 22 dental sales reported to BizBuySell for 2025 had a median of 199 days. Financing and insurance paperwork add time after you accept an offer: Live Oak Bank's guide to acquisition loans says funding takes about 60 days on average, and Delta Dental of Tennessee says an initial credentialing application can take up to 30 days to approve.

The ADA's selling page calls four to six weeks from listing to closing the ideal, far short of the BizBuySell medians above.

How long a dental practice sale takes, by measure

Often yes, but the buyer's financing decides how. An ADA career article describes a common arrangement in which the buyer purchases 100% of the practice and the seller stays on as a paid associate, often two or three days a week, usually for one to three years by agreement.

That arrangement does not fit most SBA 7(a) purchases by an outside dentist. Under SBA SOP 50 10 8.1, effective October 1, 2026, when a 7(a) loan funds an Initial Acquisition or a Business Expansion, you may not stay on as an officer, director, stockholder or employee. The practice may contract with you as a consultant for up to 24 months in total, but the SOP does not say whether a consultant can treat patients.

A partial sale, where you keep an ownership share, is one exception. Another may apply if an associate employed by the practice for at least 24 months buys your entire ownership interest: ask the lender whether the sale can be an Existing Owner Buyout, which the bar does not name.

ADA News reported in December 2024 that some DSOs want the seller to stay three to five years. Attorneys writing about pediatric practices in Pediatric Dentistry Today (Q1 2026), the American Academy of Pediatric Dentistry's magazine, say a DSO buyer will likely require you to keep working clinically, often for three or more years, and can usually end that employment.

Selling to another dentist: SBA rules and staying on

In a DSO deal, the ADA's DSO guide (updated January 2021) warns that non-compete and non-solicitation terms commonly extend to other practices the DSO services. State law decides what any covenant can cover, and the guide notes that law has changed in many states, so have counsel in your state review any covenant before you sign.

California voids employment non-competes, but lets an owner who sells the practice's goodwill, or all of their ownership interest, agree not to compete in the area where the practice operated (Cal. Bus. and Prof. Code 16601).

California's SB 351 voids clauses in private equity and hedge fund management or asset-purchase contracts that bar a provider from competing after leaving the practice, but expressly keeps an otherwise enforceable sale-of-business non-compete (Cal. Health and Safety Code 1191, effective January 1, 2026).

Texas Business and Commerce Code 15.501 makes a non-compete relating to dentistry with a Texas-licensed dentist, entered into or renewed on or after September 1, 2025, unenforceable unless it (1) allows a buyout capped at the dentist's total annual salary and wages at termination, (2) expires within one year after the contract or employment ends, (3) covers no more than five miles from where the dentist primarily practiced, and (4) has terms clearly and conspicuously stated in writing.

Whether it reaches a covenant you sign as the seller, rather than as an employed dentist, is unsettled. Ask Texas counsel how it applies to your sale and any work-back agreement.

The employment agreement and non-compete in a DSO deal

Your state's dental rules decide who keeps the charts, for how long, and what patients are told. An HHS Office for Civil Rights FAQ (2009) says the HIPAA Privacy Rule sets no retention period for medical records and that state law generally governs it.

Texas requires a dentist leaving by sale to keep the records, transfer them in writing to the succeeding dentist or sign a records-maintenance agreement, and to notify the dental board in writing within 15 days of a transfer or maintenance agreement (22 Tex. Admin. Code 108.8(f), effective May 28, 2026).

North Dakota requires written notice to every active patient (seen in the prior two years) when another dentist assumes a practice, naming that dentist (N.D. Admin. Code 20-02-01-08(1)(b), as amended April 1, 2026). Illinois requires dental records to be kept for 10 years and treats them as the property of the office (225 ILCS 25/50).

Under HIPAA (45 CFR 164.501), health care operations include selling a practice to another covered entity, or to one that will become one, and the due diligence for that sale; a buyer that will not become a covered entity falls outside that definition. HHS guidance (2003) says disclosures for health care operations must be limited to the minimum necessary; it does not say how much patient detail a buyer may see in due diligence. State law also applies. ADA guidance for buyers puts chart review after the buyer signs a nondisclosure agreement.

The ADA suggests that a seller who keeps the original records and gives the buyer copies has the best malpractice protection, and that the sale contract require the buyer to keep existing patient records for at least 10 years. Rules as of October 2026; confirm with counsel what you may share and when.

Patient records and patient letters when you sell

Not on their own. A DEA registration cannot be assigned or transferred without DEA's written consent, and it ends automatically when the practitioner dies or stops practicing (21 CFR 1301.52). DEA's Practitioner's Manual (2023 guidance) says each principal place of practice where controlled substances are dispensed needs its own registration (21 CFR 1301.12(a)), so the buying dentist should expect to need a DEA registration for your office. State controlled-substance rules may add steps.

If controlled-substance stock goes with the sale, 21 CFR 1301.52 also requires you to notify the local DEA Special Agent in Charge at least 14 days before the transfer, unless DEA waives it. A complete inventory is taken on the transfer date, Schedule I and II drugs move on DEA order forms, and the records go to the buyer.

X-ray registrations do not simply move either. In California, when the practice's owner (its taxpayer ID) changes, the buyer files a new facility registration and the seller withdraws the old one (CDPH Radiologic Health Branch guide, 2024).

In Florida the seller notifies the Department of Health within 15 days, and the buyer applies to register the machines within 30 days and before use (Fla. Admin. Code r. 64E-5.511). In Texas a new registration is needed when the legal entity that holds it changes, and the state reviews each change case by case (DSHS Regulatory Guide 8.2, February 2026).

Rules as of October 2026. Confirm the DEA and state controlled-substance steps with counsel, and the X-ray steps with your state's radiation control office.

DEA, X-ray, amalgam and OSHA items in the due diligence checklist

Not automatically. Delta Dental of California and its affiliates use a Notice of Sale of Practice form, which says services dated on or before the sale date are paid in the seller's name, and later claims go under the buyer's own participating dentist agreement, or are paid to the patient if the buyer has none. Delta Dental of Tennessee says initial credentialing can take up to 30 days, that claims are processed as non-participating until approval, and that the approval date is not back-dated.

Your fee schedule can change too. One national practice transitions firm reports that, in its experience, any full or partial change of ownership has triggered Delta Dental to move a practice's providers from Premier to the lower PPO fee schedule. Results may differ by Delta company and state, so check your own Premier and PPO patient mix and ask your Delta company directly.

Each state sets its own Medicaid change-of-ownership steps. Texas Medicaid requires the new owner to submit any new enrollment application within 30 calendar days of the change, with a copy of the sale contract stating who is liable for overpayments before the change (Texas Medicaid Provider Procedures Manual, September 2026).

In California, a buyer can bill under your Medi-Cal Dental enrollment through a successor liability agreement that you both sign and date and have postmarked within five days of the qualifying event: a sale of 50% or more of the practice's assets at the enrolled location, or a cumulative change of 50% or more in its owners or controlling persons (Medi-Cal Dental provider bulletin, June 2024).

The agreement makes the buyer jointly and severally liable for your Medi-Cal liabilities, and it covers Medi-Cal Dental fee-for-service only. Rules as of October 2026; have counsel review it.

Payer contracts and credentialing when you sell

Attorneys writing in Pediatric Dentistry Today (Q1 2026), the American Academy of Pediatric Dentistry's magazine, advise sellers to keep key staff such as office managers and high-producing associates, possibly with bonuses.

They say a DSO buyer often requires associates to be under written contracts that can be assigned to a third party, and suggest a staff census showing each person's hire date, position, pay, benefits and whether they are on a written contract, at will or an independent contractor. The ADA lists staff employment contracts, job descriptions and a report of all staffing expenses among the documents a seller may need at a minimum.

Hygienists are hard to replace. In April 2026 the ADA Health Policy Institute reported that only 60% of dentists had enough hygienists on staff, and 91% of dentists who were recruiting or had recently recruited one called it very or extremely challenging.

The ADA's selling page lists who to notify of a sale, including staff, vendors, your professional liability carrier, dental benefit plans, referring dentists, utility companies and the landlord.

Staff and associate records a buyer asks for

The lender's rules set much of the structure. Under SBA SOP 50 10 8.1, Appendix 15 (effective October 1, 2026), if the buyer becomes your practice's new majority or largest individual owner and was not an owner before, or has been employed there fewer than 24 months, the sale is generally an Initial Acquisition, SBA's default category. The buyer must then inject equity of at least 10% of total project cost, and the lender cannot reduce or waive it.

If the buyer's own dental practice, operating at least two full fiscal years under current ownership, buys 100% of yours, the sale may instead qualify as a Business Expansion, where the lender can reduce or eliminate the equity. The lender decides the category.

The business valuation must be prepared for the lender, not for you or the buyer, and total debt for the purchase, including any seller note not on full standby, cannot exceed it. A price above that valuation has to be covered by equity, which can include a seller note on full standby.

Your note counts toward the buyer's equity only if it is subordinated and on full standby, with no principal or interest paid for the life of the SBA loan, and it can supply no more than half of the required equity. Earn-outs are prohibited when a dentist buyer uses a 7(a) loan, though a buyer paying cash or using a conventional practice loan can still agree to one. The business portion of the loan may not amortize over more than 10 years; real estate bought in the same deal can run longer.

General information only; confirm the structure with the buyer's lender and your attorney.

SBA 7(a) rules and seller notes when you sell to a dentist

Yes, and the financing route depends on how long they have worked for you and what they buy. Under SBA SOP 50 10 8.1, effective October 1, 2026, a single owner selling 100% of their ownership interest to someone employed by the practice for at least the 24 months before the application may qualify as an Existing Owner Buyout. The lender may then reduce or eliminate the 10% equity injection if the buyer has enough liquidity and working capital.

If your associate has been employed fewer than 24 months, SBA applies its Initial Acquisition standards, and if their new entity buys the practice's assets instead, the sale likely falls under those standards too. The SOP says employed, so an associate paid as an independent contractor should ask the lender whether that counts. The buyer's lender decides which category applies; this is general information, so confirm the structure with the lender and your attorney.

A partial sale is another route. SBA allows a 7(a) loan for a partial sale in which you stay on as an owner or employee, but if you keep less than 20%, you must guarantee the full loan for at least two years after final disbursement. Some dental lenders offer buy-in loans: Panacea Financial says on its website (accessed October 2026) that its partner buy-in loan does not require a lien on the existing practice, its real estate or its equipment.

Set the price on a professional valuation. The ADA's 2013 valuation guide says it is prudent to base the price in a buy-in, option or buy-sell agreement on one.

Selling to your associate: Owner Buyouts, buy-ins and seller notes

Each part of the price can be taxed differently, so settle how it is split among the practice's assets with your CPA before you sign a letter of intent. This is general information, not tax advice for your practice.

Gain on depreciated equipment, such as dental chairs, imaging units or a CAD/CAM mill, is treated as ordinary income up to the depreciation allowed or allowable, including section 179 expensing and bonus depreciation. In a typical asset sale of a practice, you and the buyer both report the allocation on IRS Form 8594.

Ownership of the goodwill can depend on agreements you signed with your own corporation. In Howard v. United States (E.D. Wash. 2010, No. CV-08-365-RMP), a dentist's goodwill was treated as his professional corporation's asset because of his employment agreement and non-compete with it, and the $320,358 he and his wife reported as long-term capital gain was treated as a dividend. An unpublished, non-precedential Ninth Circuit memorandum affirmed in 2011 (No. 10-35768).

Whether any of this applies to your practice is a question for your CPA and attorney.

The tax questions to take to your CPA

Start with the ADA Practice Transitions Valuation Document Checklist (accessed October 2026). Among other items, it tells an owner to have these on hand before a valuation: five years of collections and production, dentist and hygiene production with monthly hours worked, the fee-for-service to managed care ratio, active and inactive patient counts, services offered and referred by treatment code, and the recare percentage.

State the definition behind any active-patient count. ADA policy counts patients who received services in the past 24 months as active.

If your buyer uses an SBA loan, the lender needs your financial statements for the last three complete fiscal years, signed or certified within 120 days, plus interim statements no older than 120 days. It must also check your numbers against IRS tax transcripts before the first disbursement (SBA SOP 50 10 8.1, effective October 1, 2026). Make sure your practice-management reports, your P&L and your filed returns agree before a lender compares them.

The ADA's selling page also tells you to gather facility documents such as your lease, documents proving regulatory compliance, and an inventory of dental and office equipment with serial numbers, warranties and maintenance records.

The due diligence checklist, starting with financial records

In Texas, California, Arizona and Illinois, the estate or legal representative of a dentist who owned the practice alone can keep it running for about a year, under conditions, while it is sold or wound up. Texas lets an executor or administrator, or the legal representative of a dentist found mentally incompetent by a court, employ a licensed dentist to run the practice for up to 12 months from the death or that finding (22 Tex. Admin. Code 101.11(c)), or to wind it up, including selling its assets.

California allows up to 12 months or until the practice is sold, whichever comes first, if the dentist was a sole proprietor or the sole shareholder of a professional dental corporation, after the Dental Board is notified and current patients are mailed notice within 30 days (Cal. Bus. and Prof. Code 1625.4).

Arizona allows up to one year, with notice to the dental board within 60 days of the death (A.R.S. 32-1270). Illinois allows one year or until sold for a solo-owned practice, after notices to the state and to patients, and its Department of Financial and Professional Regulation may extend that by up to three more 12-month periods (225 ILCS 25/38.2, as amended January 1, 2026).

The ADA's 2013 valuation guide says a buy-sell agreement can provide for a purchase if an owner dies or becomes disabled, and that it is prudent to base its price on a professional valuation rather than a rule of thumb. If you practice with a partner or associate, settle that agreement while you can still negotiate it. Rules as of October 2026; confirm your state's rule with counsel.

Ownership rules, estates and what they mean for your sale

A valuation here is free, and requesting one does not list your practice or commit you to anything. Details about your practice are not shared with prospective buyers without your permission. After you send the request, someone follows up to understand what a form cannot see, such as your payer mix, who produces the dentistry, your lease and your equipment.

If you only want a rough range for now, the estimator on the valuation page gives one without asking for your contact details. It uses BizBuySell's dental sale data or, for a multi-location practice or one that runs without you in the chair, one advisor's DSO add-on range.

Neither replaces the business valuation an SBA lender needs if your buyer uses a 7(a) loan: under SOP 50 10 8.1 (effective October 1, 2026), that valuation must be prepared for the lender, which cannot use one prepared for the seller.

Estimate a range for your practice