Selling My Dental Practice: How to Achieve Your Ideal Exit

According to the International Business Brokers Association (IBBA), 75–90% of businesses that go to market don’t sell. Even when a business does sell, the owner doesn’t always necessarily get the best deal in terms of final sale price, deal structure, exit timeline, and finding a good steward for their company.

Dental practice owners face unique challenges, such as:

1. A limited pool of buyers.

Often, there are very few individual dentists with the required capital who are looking to acquire a practice in your specific area. While doctor-to-doctor transactions still occur, they’re increasingly rare due to high practice values and younger dentists’ preference to avoid business ownership responsibilities.

To increase your chances of getting a competitive offer, you’ll likely be selling to a Dental Support Organization (DSO). But DSOs have very specific criteria — minimum revenue thresholds, required operatory counts, and geographic preferences — that eliminate many practices from consideration.

2. Value that is difficult to transfer to new buyers.

Your practice value is tied directly to your clinical reputation and patient relationships. When you leave, there’s real concern about patient retention, staff transitions, and whether referral networks will transfer successfully. This dependency on your presence often reduces valuations as buyers price in the risk of losing patients and revenue after closing.

Even when dentists want to stay on as a provider while relinquishing the majority of their ownership, there can be concern about how this new dynamic will unfold. Will the dentist be open to changes from management? Will they be less motivated now that their stake in the business is smaller?

In this post, we look at how you can better prepare for your exit and increase the chances of achieving your exit goals. But first, let’s look at the most impactful thing you can do as an owner of a dental practice — working with an M&A advisor who has recent and relevant experience in the dental industry.

Table of Contents

• How to Increase Your Exit Outcomes by Working with an M&A Advisor
• How to Prepare for Your Exit
  • Step 1: Get an Accurate Valuation
  • Step 2: Prepare for Your Exit
  • Step 3: Find an M&A Advisor with Experience in the Dental Industry
• Additional Resources for Dentists Looking to Sell Their Business
• Frequently Asked Questions

H/T: Throughout this article, we quote Ryan Mingus, the Managing Director of Mergers and Acquisitions at TUSK Practice Sales. The team at TUSK has over 100 years of combined experience in dental practice sales.

How to Increase Your Exit Outcomes by Working with an M&A Advisor

An M&A advisor facilitates the sale process and provides strategic guidance, ensuring that business owners maximize value and navigate the transaction’s complexities successfully.

By working with the right M&A advisor, you can maximize your exit outcomes, which can mean:

• A higher sale price and a competitive deal structure
• An exit timeline that works for you
• Finding a good steward for your business

M&A advisors can deliver these results due to four key reasons:

1. They will accurately value your dental practice based on comparable companies and previously closed deals. An experienced M&A advisor uses multiple valuation methods and real transaction data to determine what buyers are willing to pay. Some M&A firms, like TUSK Practice Sales, provide a free valuation range before you sign, helping you decide if now is the right time to sell.
2. M&A advisors can strategically market your business towards potential buyers. They know exactly what DSOs value in a dental practice and will craft marketing materials that highlight your strengths and spark buyer interest.
3. M&A advisors have built extensive networks of vetted, qualified buyers. By marketing your business to these buyers, they can run a competitive bidding process where multiple interested parties drive up your value. TUSK Practice Sales, for example, can increase valuations on unsolicited offers by an average of 35% thanks to their ability to generate competition.
4. They can keep a clear head during negotiations. Negotiations can be emotionally charged—especially for dentists dealing with private equity-backed platforms. An M&A advisor brings objectivity and experience to keep the process on track.

For dentists like you, working with an M&A advisor is the obvious move if you’re serious about selling your practice. The challenging part is finding an M&A with the right experience necessary to help you maximize your exit outcomes.

That’s where we can help at Axial. We have a network of over 3,000 M&A advisors and investment banks, along with data on the deals they’ve marketed, their outcomes, and their professionalism. We can help you find the right M&A advisor to help value your business accurately, target enough buyers to get your ideal exit, and negotiate and structure the deal. To get started, schedule your free exit consultation.

To learn more about the M&A process for dental practices, keep reading.

How to Prepare for Your Exit

Step 1: Get an Accurate Valuation

Getting an accurate valuation first helps you determine if you’re ready to sell or if you need another 1–2 years to optimize your practice to achieve the exit you want.

Dental practice valuations involve analyzing multiple key factors specific to your practice but within the context of the broader dental industry, such as patient retention rates, location advantages, revenue growth trends, recall system effectiveness, and the percentage of fee-for-service versus insurance patients. An accurate valuation requires comparing these metrics against industry benchmarks and recent sales of comparable practices to understand where you stand competitively.

Plus, to get an accurate idea of your value, you also need to compare your business against others in the market. You need to know what other dental practices like yours have sold for, what multiple buyers are paying in your geographic area, and how current market conditions affect pricing.

The easiest way to get the most accurate valuation is to have your M&A advisor conduct the analysis for you. Sometimes, sell-side advisory firms will do an initial valuation for free to help you see if you’re in the ballpark of the kind of exit you want.

When you work with an M&A advisor recommended to you through Axial, you’re working with an advisor who has experience in selling practices like yours. They know what buyers are willing to pay and can spot value drivers that general business brokers miss.

If you’re not yet ready to work with an M&A advisor, you can use Axial’s free valuation calculator. This calculator uses an industry-specific DCF methodology to give you a ballpark estimate of your practice value. It’s a good starting point if you’re curious about your value.

Here are other resources Axial has written about business valuation:

• How to Value a Company for Sale: 3 Methods + Common Mistakes to Avoid
• How Much Can I Sell My Company For?

Using Your Valuation to Plan Your Exit

Your initial valuation helps determine your next steps.

If your practice value supports your goals: You can move forward with exit preparation and marketing.

If there’s a valuation gap: Your advisor can recommend specific improvements to maximize value before going to market. Common recommendations include:

• Improving recall rates to boost recurring revenue
• Reducing patient concentration risks
• Updating equipment or technology
• Streamlining operations to improve margins
• Strengthening referral relationships

If timing isn’t right: You might delay your exit by 1–2 years to implement value-driving improvements.

Remember, this initial valuation serves as a starting point. The final sale price will depend on market conditions, buyer competition, and deal structure. But knowing your practice’s current value helps you make informed decisions about timing and preparation.

What Are the Factors That Drive Valuation?

Understanding what drives your practice value helps you identify areas for improvement and set realistic expectations. Here are the most important factors buyers consider:

How Different Buyers Value Your Practice

While different factors will impact your valuation, keep in mind that different types of buyers often have a limit on what they’ll spend.

DSO Buyers typically offer higher multiples (100–200% of collections, per Dental Practice Connect) but structure deals differently. They may pay less cash upfront and require you to work back for 3-5 years. DSOs look for practices with:

• Annual revenue of $1M+
• 5+ operatories
• Growing patient base
• Strong operational systems

Private Buyers (individual dentists) usually offer 75–90% of collections but provide more cash at closing. They often value:

• Practice culture and reputation
• Patient loyalty and relationships
• Smooth transition potential
• Established referral networks

Associate Buy-Ins might offer lower initial valuations but provide mentorship opportunities and gradual transitions. These work well when:

• You want to maintain some involvement
• The associate has worked in your practice
• You value practice continuity over maximum price

Keep in mind that there’s generally a spectrum of stewardship and price. While not always the case, it’s often the case that the more you get in stewardship, the less premium price you can get, and vice versa. Most dentists want both: a good and fair price for their practice, but also a good steward to take over their business. By preparing for your exit (which we will cover next) and working with an M&A advisor, you can increase your chances of finding the right buyer.

Step 2: Prepare for Your Exit

Once you understand your practice value, you can prepare for your exit. The goal is to address any valuation gaps identified in Step 1 while ensuring your practice is ready for buyer due diligence. In short, you want to have your ducks in a row so you can demonstrate value to buyers and show them how your business operates. You can start doing this early on, 5-7 years before you intend to sell.

Prepare Your Financials

Clean, accurate financials are essential for a smooth sale process. Buyers will scrutinize your numbers, so you want everything organized and professional.

But as Ryan Mingus from TUSK Practice Sales shared, it’s rare that a dental practice will have sophisticated accounting procedures. They also don’t know how to present their financials in a way that’s tailored towards the buyer.

“Dental practice owners often use their business as a personal checking account, intermingling personal and business expenses like automotive payments, country club dues, etc.” But that can give a wrong snapshot of your finances.

The advisors at TUSK will extract any personal and one-time expenses that the new owners won’t have to pay. Advisors like those at TUSK understand exactly what buyers will and won’t give you credit for when analyzing your EBITDA.

What you can do to make the process smoother before you even consult with an advisor is:

• Gather 3 years of profit and loss statements, balance sheets, tax returns, and bank statements.

• Create an equipment list with current values and condition assessments.

• Switch to accrual-based accounting if you’re not already using it. This method records revenue when services are performed and expenses when they’re incurred — regardless of when payments are received or made — giving buyers a clearer view of performance over time and revealing true revenue trends without the distortion of delayed payments or irregular billing cycles.

• Plus, it’s best if you can track these key dental metrics:
  • Active patient count (patients seen in the last 18-24 months)
  • New patient acquisition numbers and sources
  • Hygiene recall rates and appointment fill rates
  • Treatment acceptance rates by procedure type
  • Collection rates and accounts receivable aging
  • Revenue breakdown by service type
  • Insurance vs. fee-for-service percentages

These metrics help buyers understand the health and sustainability of your practice beyond just the financial numbers.

Remove Key Person Dependencies and Become a Multi-Provider Practice

Perhaps the most impactful thing you can do as an owner of a practice is to set up your business to ensure its value doesn’t diminish after your exit.

This means setting up a team that can handle the transition but also becoming (if you’re not already) a multi-provider practice.

• You can optimize your practice by documenting standard operating procedures, cross-training employees (like making sure your office team is comfortable checking in patients, handling billing, etc), looping your hygienists into your clinical decisions, and updating any outdated office management systems, like your scheduling and recall systems.

• Having a multi-provider practice is a great way to show value to buyers. By having two or more providers, there’s less risk that patients will leave when you exit your business. Plus, whoever is buying your business doesn’t have to immediately look for a provider to staff and take over your responsibilities.

Multi-provider and multi-location dental practices are becoming the norm in M&A. For example, most of TUSK’s clients have at least 3 doctors in a practice. If you’re thinking about selling down the line, and you’re still a single doctor business, then a great next step for you would be growing into a multi-provider practice.

Optimize Patient Contracts and Recall Systems

Recurring, reliable revenue is a great way to demonstrate value to buyers and get higher multiples. Strong recall systems and patient retention demonstrate recurring revenue potential to buyers.

Improve Your Recall Rate

• Update patient contact information regularly
• Use multiple communication methods (phone, email, text)
• Schedule next appointments before patients leave
• Follow up on missed appointments promptly
• Consider recall incentives or promotions

Document Patient Relationships

• Patient treatment histories and preferences
• Family relationships and referral sources
• Payment arrangements and insurance information
• Special considerations or needs

Review Service Agreements

If you offer treatment plans or payment plans, ensure they’re properly documented and transferable. Clear agreements protect both you and the buyer.

Diversify Your Patient Base

If you have high patient concentration (a few patients representing large revenue percentages), here’s what you can do to diversify:

• Focus on new patient acquisition
• Expand services to existing patients
• Develop referral relationships with other practices

For more information on exit preparation, you can read our posts on:

• Business Exit Planning: Set and Meet Your Exit Goals
• Devising Your Ideal Exit Timeline

Step 3: Find an M&A Advisor with Experience in the Dental Industry

If you don’t already have an M&A advisor you want to work with, and you’re serious about selling your business in the near future, then it’s time to find one.

The best M&A advisor for your dental practice will have recent and relevant experience in selling businesses like yours.

Such M&A advisors can:

• Increase buyer coverage to improve your chances of getting the exit you want. With their network of vetted buyers, advisors can create a competitive bidding process. So instead of just one or two interested buyers who reached out to you, you have now several options that have shown interest in your business.

• Increase your final sale price. Data shows that advisors in general can increase your final sale price by 6% and 25%, but TUSK Practice Sales’s proprietary data has them increasing unsolicited offers by up to 35%. The takeaway is clear: the right M&A advisor can lead to a much more premium deal.

• Save you 30+ hours a week. This 30+ hours a week number is based on estimates from a survey we ran within our network. Advisors spend their time valuing your business, preparing your financials, targeting buyers, vetting buyers, and handling negotiations.

At Axial, we specialize in helping small-to-midsize business owners find the advisors who can bring them these results.

We start by pairing you with an Exit Consultant who gets to know your business and your exit goals.

Your Exit Consultant will leverage Axial’s network of 3,000+ M&A advisors to create a shortlist of candidates with:

• Recent, relevant deal experience in the dental industry.
• Track record of advancing potential buyers from initial interest to submitted bids.
• Strong down-funnel success, including the number of bids generated and successful sales completed within the Axial network.
• Positive feedback on professionalism, reputation, and responsiveness.

We’ll send you a curated list of 3–5 qualified advisors, complete with detailed insights to help you evaluate your options and resources to prepare for meetings with your candidates.

Schedule your free exit consultation today.

Additional Resources for Dentists Looking to Sell Their Business

At Axial, we offer several resources for small business owners looking to sell their company, learn more about the M&A process, and better understand the value of their business.

Here are just some of the resources that can be helpful to you:

• Free Business Valuation Calculator: Use this calculator to get a rough estimate of your business’s value, based on an industry-specific DCF analysis trusted by M&A advisors.
• Checklist for Selling Your Business: We break down the process of selling into an easy-to-follow checklist, including a business exit timeline to help you determine when to start the M&A process.
• Business Brokers vs. M&A Advisors: We clear up the confusion around the roles of business brokers and M&A advisors, explaining how each operates.

These are just a few of the resources we’ve created for business owners. You can find more here.

Frequently Asked Questions

What are Average EBITDA Multiples for Dental Practices?

EBITDA multiples for dental practices are usually a range, and can vary based on several factors like practice size, location, growth rate, and operational efficiency.

Ryan Mingus from TUSK Practice Sales provided these ballpark estimations:

• If your practice is under a million in EBITDA, your multiple is likely within the 5x to 7x range.
• If your practice is over a million in EBITDA, but under 3 million, then you’re likely in the 6x to 8x range.
• If your practice is over 3 million in EBITDA, then it can be in the 7x to 10x range.

But these are general estimates based on his experience. Mingus explains, “Where exactly your EBITDA multiple falls within those ranges depends on your revenue growth, patient base, pay mix, location, the facility, revenue trends, churn range, and much more.”

To get an accurate EBITDA multiple for your dental practice, you want to work with an M&A advisor.

How Can I Value My Dental Practice?

You want to use multiple valuation methods to arrive at an accurate valuation range.

These can include:

• Discounted Cash Flow Analysis: This approach projects your practice’s future cash flows over 5-10 years, then discounts them to present value.

• Asset-Based Valuation: This is the method generally reserved for when you’re selling from one doctor to another, which is the rarer type of dental practice acquisition.This method inventories your tangible assets (equipment, furniture) and intangible assets (patient records, goodwill) to determine total practice value. Goodwill represents the intangible value of your practice beyond its physical assets — things like patient relationships, reputation, location advantages, and established referral networks. According to Dentistry iQ, goodwill typically often represents 80–85% of total value, reflecting the relationship-based nature of dental care where patients often follow their trusted dentist.
• Capitalized Earnings Method: This method takes your practice’s net income from the prior year (or average of the past few years) and divides it by a capitalization rate. For dental practices, cap rates typically range from 25–31%. This method works well for practices with stable, predictable income streams.

Generally speaking, you don’t want to rely on just one valuation method. Instead, advisors will use multiple methods to triangulate your practice’s value range.

For example, you might see:

• Capitalized Earnings: $1.2M
• Discounted Cash Flow: $1.4M
• Asset-Based: $1.1M

This gives you a valuation range of $1.1M–$1.4M, which becomes your starting point for pricing negotiations.

How Do I Maintain Confidentiality During the Sale Process?

Confidentiality is critical for dental practice sales. If you let news of a possible sale spread, you can lose patients and staff, leading to a lower valuation, which can derail a deal.

You can’t self-represent and maintain confidentiality, as you’ll be speaking on your own behalf to see if businesses are interested in buying your dental practice.

So a key part of maintaining confidentiality during the sale process is working with an M&A advisor who can speak on your behalf.

Professional M&A advisors use structured processes including non-disclosure agreements, confidential marketing materials, and careful timing of staff and patient notifications.

What’s the Difference Between Selling to a DSO vs. a Private Dentist?

DSOs typically offer higher valuations (100–200% of collections) but require work-back periods of 3–5 years and may change practice culture. Private buyers usually pay 75–90% of collections with more cash upfront and shorter transitions, but offer less overall value. The right choice depends on your goals regarding price, timeline, and post-sale involvement.

If your practice doesn’t meet typical DSO criteria (revenue minimums, operatory counts, location requirements), you would then focus on private buyers, smaller dental groups, or associate buy-ins instead. These alternatives can provide good outcomes for practices that don’t fit DSO models, though it’s a much smaller market.

How Long Does it Take to Sell a Dental Practice?

The timeline varies significantly based on practice characteristics, market conditions, and your preparation level. Well-prepared practices in active markets may sell within 4–6 months from listing to closing. Practices requiring significant preparation or operating in challenging markets may take 12–18 months. Working with an experienced advisor and preparing thoroughly can significantly reduce your timeline.

But in general, Axial’s business exit timeline maps the entire process from beginning your exit planning to closing the deal, which can take over ~3 years.

But that’s just an average estimate; you can expedite your timeline by:

• Using Axial to find good-fit advisors for your business.
• Thoroughly preparing your business for exit, so you reduce any risk of stalled due diligence or talks.
• Weeding out any buyers who aren’t ready to make an acquisition.

How Much Does it Cost to Work with an M&A Advisor?

M&A advisor fees typically consist of two components:

• A retainer fee
• A success fee

Retainer fees vary significantly, with some advisors charging fixed upfront fees while others use monthly retainers or milestone-based structures. About 24% of advisors work without any retainer, earning compensation only when the deal closes.

Success fees are commonly structured using the Lehman Formula, which 50% of brokers use (5% on the first $1M, 4% on the second $1M, 3% on the third, 2% on the fourth, and 1% above $4M), while 33% use flat percentage structures and 17% use accelerator formulas where fees increase with deal size. While these fees may seem substantial, data shows that businesses represented by advisors sell for 6–25% more than those sold by owners directly, and owners save 30+ hours per week during the process.

Additionally, businesses represented by advisors have a significantly higher success rate of actually completing a sale compared to owner-operated sales.

For more information, read Axial’s comprehensive guide on how much brokers charge to sell a business.