Selling or valuing a practice
The honest answer depends on how buyers think, not how sellers hope. This is how UK dental practices are valued, from someone who has sat on the buying side of 120+ dental acquisitions.
In short
Most principals only sell a practice once. Most buyers have done it dozens of times. That asymmetry is where value leaks: in the gap between what a seller believes the practice is worth and what a buyer can prove it will earn. If you are asking yourself how to sell your dental practice, or what it might be worth, the starting point is the same: understand how the other side of the table prices a practice.
Across 120+ dental acquisitions and two institutional private equity transactions, the pattern is consistent. The practices that achieve strong valuations are not necessarily the biggest or the most profitable on paper. They are the ones whose earnings are demonstrable, whose risks are understood and addressed early, and whose sellers prepared before they went to market rather than during diligence.
This page sets out how dental practice valuation actually works: what drives value, how the normalisation bridge works, how goodwill is judged, and what buyers will examine before they commit.
The fundamentals
Buyers price a practice on maintainable EBITDA: the profit that survives the sale. Reported profit is the starting point, not the answer. The question a buyer asks is what this practice earns under normal ownership, with a market-rate clinician doing the clinical work the owner currently does themselves.
NHS contract value, UDA delivery history and clawback exposure sit alongside private revenue quality. A strong private plan base with low attrition reads very differently to fee-per-item income that walks out of the door with the principal.
If revenue depends on one or two clinicians, including the seller, buyers discount for it. Depth of the clinical bench, length of associate tenure and the stability of the performer list are all valuation levers, not HR details.
CQC status, complaint history, GDC record and the state of the compliance file affect both price and deal certainty. Issues found late in diligence get priced twice: once in the number, once in the indemnities.
Freehold, leasehold, length of unexpired term and rent relative to market all change the risk profile. A short lease or an unresolved landlord position can stall an otherwise clean transaction.
Unused surgeries, under-marketed private capacity and a patient list that has never been worked properly are upside, but only if the evidence supports it. Buyers pay for demonstrated performance and underwrite carefully described potential.
The number that matters
Almost no dental practice's accounts show its true maintainable earnings. Owners pay themselves through a mix of salary, dividends and benefits; some do clinical work that a buyer must replace at market cost; personal expenses sit in the cost base; the freehold rent, if there is one, is rarely at market.
The normalisation bridge is the disciplined restatement of the accounts into the profit a buyer can rely on. Every adjustment must be evidenced. An aggressive bridge that a buyer's accountant unpicks in diligence costs far more in credibility than it ever adds on paper.
The adjustments a credible bridge typically includes:
The valuation conversation starts from this restated figure, multiplied by a rate that reflects the quality and durability of the earnings, not from the headline profit in the accounts.
Beyond the assets
Goodwill is the part of the price that sits above equipment, fit-out and property: the patient base, the contracts, the team and the reputation. In most dental practice sales it is the largest component of value, and the most contested.
A buyer pays for goodwill only to the extent it will transfer. Patients loyal to the practice, a stable associate team and systems that run without the principal all support it. Where the book follows one clinician, buyers protect themselves with lower upfront consideration, deferred payments or earn-outs tied to post-sale performance.
The practical lesson for sellers is simple: the less the practice depends on you, the more of its goodwill a buyer will pay for on completion.
The other side of the table
Three years of accounts, management information, UDA delivery and clawback history, plan income reconciliation and payroll. Inconsistency here is the single most common cause of price chips late in a deal.
Patient numbers, recall performance, private plan penetration, referral flows and local competition. Buyers are testing whether the revenue base is durable, not just current.
Contract terms, GDC registrations, CQC reports, complaints, employment arrangements and any open disputes. Anything found here that was not disclosed early changes the tone of the negotiation.
Systems, staffing structure, supplier arrangements and how the practice actually runs day to day. This is where buyers test whether the practice functions without the seller.
None of this is a reason to delay a sale. It is a reason to prepare for one. Sellers who commission their own honest read of the practice before going to market control the narrative; sellers who wait for the buyer to find the issues negotiate from behind.
Common questions
Most buyers start from maintainable EBITDA: reported profit restated for owner remuneration, market-rate clinical cover, one-off items and market rent. That figure is multiplied by a rate that reflects the quality and durability of the earnings. Turnover multiples are sometimes quoted as a rough guide, but serious buyers price on earnings.
Goodwill is the value of the business above its tangible assets: the patient base, contracts, reputation and team. It is only worth what a buyer believes will transfer. Where patients follow the principal rather than the practice, goodwill is discounted or deferred through earn-outs.
Yes. NHS contract value, UDA delivery and clawback history are assessed alongside the quality of private income. Plan revenue with low attrition is generally viewed as more durable than fee-per-item income tied to one clinician.
Reduce dependence on yourself, evidence your earnings with clean management information, resolve compliance and lease issues early, and document the growth opportunity with data. Buyers pay for demonstrated performance.
There is no reliable rule of thumb. Value is maintainable EBITDA multiplied by a rate that reflects earnings quality, and both move with the specifics of the practice: revenue mix, associate dependence, compliance and property. Two practices with identical turnover can be worth very different amounts. An honest valuation starts with the normalisation bridge, not a multiple quoted at a conference.
Twelve to twenty-four months before you want to complete. That is enough time to reduce dependence on yourself, clean up the compliance file, resolve lease issues and build the management information that evidences your earnings. Sellers who prepare early control the narrative; sellers who prepare during diligence negotiate from behind.
For groups preparing for investment or sale, see advisory services or read more in The Accidental Dental Strategist.
The DOMI assessment is a structured, twenty-minute read on how investable your practice or group looks across the six domains buyers examine: the same lens applied across 120+ acquisitions. Free, confidential, and the fastest way to see your business the way a buyer will.