How to Sell My Dental Practice: Complete 2025 Guide for Maximum Value

You've worked for years in your practice. You've provided great care for your patients. You've helped your practice grow. It's been your business, your career: you've poured your life into your office, your patients, and your team.

You've worked for years in your practice. You've provided great care for your patients. You've helped your practice grow. It's been your business, your career – you've poured your life into your office, your patients, and your team.

And now you're thinking about selling.

Most dentists will face this decision at least once in their careers, and it may be one of the most significant financial decisions you make.

Perhaps the thought of selling fills you with excitement…perhaps it fills you with concern, even a little fear. 

Either way, after growing up in a family of dentists and now leading a team that’s worked with well over 1,000 dentists on practice transitions, I can tell you that it's absolutely manageable with the right preparation and guidance.

This comprehensive guide will walk you through everything from initial planning to closing the deal, helping you navigate the complexities and maximize your practice value in the dynamic 2025 market.

Why Getting The Sale Right Matters

There are many reasons to consider a practice sale. 

Retirement remains the primary reason dentists sell their practices, but it's becoming increasingly common for practice owners to sell before retirement. Some want to sell half (or some other percentage) now and add a partner. Others want to sell 100% and become an associate in the practice they just sold so they can work less without affecting the practice. Still others are looking to relocate or are forced to sell because of a disability.

No matter why you're contemplating the sale of your practice, it's always a serious decision that must be carefully considered and planned. 

I've seen deals where proper preparation and strategy resulted in practice sales significantly above market value, and I've unfortunately seen rushed sales that left hundreds of thousands of dollars on the table.

I’ve also seen (many) sales where the doctor walks away happy and excited about the next chapter, and I’ve seen sales where doctors left money on the table, received unfavorable terms, and left their practice disappointed (rare, but it happens). 

This is why good preparation and professional help can make a huge difference, not only in maximizing value, but also in that feeling of accomplishment that accompanies a successful transfer of your life’s work.

When Is the Right Time to Sell Your Dental Practice?

Personal Readiness Factors

There are several key steps you should take to prepare for selling your practice. All of them deserve careful and smart planning.

First, are you ready for the change? 

Some doctors are able to sell their practices, walk away, and never look back. They are ready for the adventure of retirement and the gift of having more time to pursue their personal projects. If this is you, you can skip ahead to the next section - you’re ready!

But if thinking about life on the other side of practice ownership makes you nervous, you’re absolutely not alone! Dentistry is a meaningful career, and many of your peers also find it hard to let go of being ‘the dentist’ and ‘the practice owner’. 

If this sounds like you, consider building what we call a “ladder to a compelling future.” Think about the trips you want to take, the organizations you want to participate in or volunteer with, or what it will look like to spend more time with children or grandchildren. You could even continue to practice dentistry (as an associate in the practice you just sold or on a volunteer basis somewhere else).

Second, are you financially ready to sell your practice? 

Realistically, a practice sale is probably not going to fund 100% of your retirement, though it can certainly help! Building a relationship with a financial advisor and carefully discussing your needs is a crucial first step to thinking about selling your practice. 

A good advisor will consider your lifestyle, retirement goals, charitable goals, obligations to family, and more and then provide you with solid information. Reach out to us if you'd like a great recommendation.

Market Timing Considerations

In my experience working with hundreds of practice transitions, timing the market perfectly is less important than being properly prepared when you decide to sell. 

[timing < prepared]

If you are ready and your practice is ready (more on this below), then it’s the right time, regardless of other market forces.

However, if you’re considering a sale, it’s still worth considering a few of the trends shaping the 2025 market.

1. More Dentists Looking to Retire: A large number of dentists who graduated about 40 years ago are now looking to retire. This so-called ‘silver tsunami’ is present across many industries, and dentistry is no exception.
2. Doctors Waiting Longer to Buy: There are fewer young buyers considering practice ownership. The number of dental-school graduates is increasing again after a long decline, but young dentists are much less focused on ownership than prior generations.

Higher Interest Rates = More Expensive Bank Loans: Interest rates are slowly declining after their steep rise in 2022, but they are still higher than the rock bottom rates of 2009 - 2021. Higher interest rates make loans more expensive for buyers (the same million dollar practice costs them more because interest rates are higher). This reduces buyer-purchasing power, disqualifying some, and reducing the overall number of available buyers in the marketplace.

1. DSO Activity: Dental Service Organizations continue to be active buyers, though they're becoming more selective about the practices they acquire. They typically look for practices with strong systems, good technology, and consistent cash flow. And many ‘mini-DSOs’ are also actively looking for the right practice.
2. Lenders Still Offering 100% of Value: Banks love lending to dentists. They consider dental practice ownership a very safe investment and regularly offer 100% of the value of the practice plus additional working capital at interest rates that are lower than those for mortgages.

With the supply of dental practices slowly increasing relative to the number of potential buyers actively seeking to own a dental practice, the 'power' in the transaction is shifting from sellers to buyers. 

However, good practices are in high demand! For the last 5 - 10 years, I’ve been predicting a shift in the market that hasn’t really materialized. We are still selling quality practices at top dollar - and I expect this to continue. 

When it comes to timing your practice sale, the most important factors are you and your practice - not wider market forces. When you are ready and your practice is ready (more on that below), it’s the right time.

Understanding Your Practice's Value

Professional Valuation Methods

There are many factors that influence practice values. Market conditions, location, build out, curb appeal, practice age, the age and condition of equipment, the level of technology in the practice, and the recent income trends all contribute to practice value.

However, at the end of the day, the value of a dental practice is determined by cash flow. The greater the revenue (collections) and net income (doctor take-home pay), the higher the practice value will be. 

From the buyer's perspective, it only makes sense to purchase a dental practice if the practice generates sufficient cash flow to pay overhead, pay the loan on the practice and have enough left over to provide a reasonable income for the buyer and his or her family.

If a dentist is contemplating a sale, one of the first questions is, what is my practice worth? And this question can't just be answered with some simple back-of-the-napkin math. It requires a deep dive into the practice financials, the software reports, the lease, and other aspects affecting the transferability of their practice.

Key Value Drivers in 2025

When I'm doing valuations, I look at several critical factors:

1. Financial Performance: Consistent collections, strong profit margins, and clean books are fundamental. Buyers typically want to see at least three years of steady or growing revenue.
2. Technology and Systems: Modern dental software, digital radiography, and efficient patient management systems aren't just nice-to-haves anymore—they're expected.
3. Patient Demographics: A diverse patient base with a good insurance mix (or fee for service model) and strong recall systems significantly impacts value.
4. Staff Stability: A well-trained, stable team that can transition smoothly to new ownership is incredibly valuable.
5. Location and Facility: While you can't (easily) change your location, the condition and layout of your facility can significantly impact buyer interest.

Two Common Valuation Methods for Dental Practices

Multiple of SDE (Seller’s Discretionary Earnings)

This is the most common method used for practices under $2.5 million, particularly those selling to private buyers. It applies a market based multiple to the ‘seller’s discretionary earnings’, which is a number that captures the total cash that an owner could take out of their practice if they optimized to take out cash. This is almost always a bad tax strategy, but it’s the best way that we have to get apples-to-apples comparisons of different practices.

SDE = Net Income + Owner Compensation + Addbacks

In plain terms, SDE represents the total financial benefit that the owner receives from the practice. It includes:

• Your salary or draw
• Your personal benefits (health insurance, retirement contributions)
• Personal expenses run through the practice (car, travel, CE, etc.)
• One-time or non-recurring costs

For example:

• Net income (profit) on tax return: $120,000
• Owner W2 salary: $180,000
• Addbacks (car lease, travel, CE, etc.): $60,000
• SDE = $360,000

Private buyers typically pay 1.75–2.25x SDE.

So in this example, your practice may be worth $630,000 to $810,000, depending on other factors like risk, geography, and buyer competition. The cleaner your books and the clearer your addbacks, the easier it is to defend a higher multiple.

Multiple of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)

This is the preferred metric for DSOs, private equity buyers, and multi-location groups. EBITDA represents the true operating profit of the business as if the owner were removed and replaced by an associate. It normalizes the profit based on standard compensation for clinical work.

Here’s how it works:

• Start with your net income
• Add back interest, taxes, depreciation, amortization
• Subtract a market-rate associate salary for your clinical production

Let’s say:

• Your net income is $300,000
• You produce $1,000,000 of dentistry
• A buyer would pay an associate 30% of that ($300,000)

In that case, your EBITDA is close to $0 and a buyer may value the business accordingly.

But if you only produce $600,000 of dentistry and your net income is $350,000, then subtracting $180,000 in associate pay gives you $170,000 in EBITDA.

Strategic buyers pay 4–6x EBITDA (sometimes more). So in this example, the practice may be worth $680,000 to over $1M, depending on scale and growth potential.

This is why strong EBITDA practices (especially those with multiple doctors or hygiene-heavy production) can command much higher valuations.

Preparing Your Practice for Sale

Financial Preparation (3-5 Years Out)

If you're like many dentists, you started thinking about selling your practice after you started slowing down, taking more vacation days, and being less diligent about collecting money. If you want to get the most for your practice, don't let production and your net income start to drop off! Maintaining your business is the single best thing you can do to optimize the value of your practice.

Here's what I recommend for financial preparation:

Organize Your Records: Clean, organized financial records for the past 3-5 years are essential. This includes profit and loss statements, tax returns, and bank statements.

Maximize Profitability: Focus on increasing collections and managing overhead efficiently. Small improvements in profit margins can significantly impact your sale price.

Tax Planning: Work with your CPA to ensure you're reporting all income properly. Under-reported income can't be used to justify your asking price.

Operational Improvements

Third, is your practice ready? As I mentioned, the most important thing you can do to keep your practice value solid is to maintain your production levels and maximize your net income. Large capital expenditures, like brand new equipment, might not be the best decision right before you sell (except for digital radiography, which most younger buyers will insist on). It is a good idea to spruce up your practice with simple and cost-effective cosmetic changes, like fresh paint or new flooring.

Technology Upgrades: Digital radiography is no longer optional and it's required by most buyers. Other technology upgrades should be evaluated based on ROI and buyer expectations.

Facility Improvements: Focus on cost-effective cosmetic improvements that make your practice more appealing to potential buyers.

Staff Training and Documentation: Well-documented procedures and trained staff make the transition smoother and more valuable.

Building Your Professional Team

Selling your practice is a team effort. In addition to your financial advisor, you will need an attorney, accountant, and broker. It is also a good idea to speak with a dental consultant prior to selling. Both increasing your profitability and strengthening your systems in the years leading up to a sale can make a big difference in the sale price.

When you're choosing a broker (or deciding to represent yourself), some important considerations include:

1. Does the broker specialize in dental practice sales?
2. How long has the broker been working in your market?
3. What does the broker expect me to do? What will they do for me?
4. How does the broker market my practice to the widest set of possible buyers?
5. What is the broker's reputation for honesty and ethical dealing?
6. Do lending institutions recommend and work closely with the broker?

At Integrity Practice Sales, we've helped over 550 sellers through this process, and I can tell you that the right professional team makes all the difference between a smooth transition and a stressful ordeal.

Finding and Working with the Right Buyer

Types of Buyers in 2025

There are many different transition models when you're looking to sell, and understanding your buyer options is crucial:

Individual Practitioners: These buyers often want to build their own practice and may be more flexible about maintaining your practice culture and patient relationships.

Dental Service Organizations (DSOs): DSOs can offer competitive prices and often have streamlined processes, but they may have specific requirements about systems and procedures.

Private Equity Groups: These groups are increasingly active in dental practice acquisitions, often looking for practices that can be part of larger consolidation strategies.

Partnership Opportunities: Sometimes the best "buyer" is adding a partner or associate who can eventually take over the practice.

The Marketing and Negotiation Process

Once you decide together with your broker that it's the right time to sell your practice, the next step is to sign a listing agreement and let your broker go to work on your behalf.

How does this work?

At Integrity Practice Sales, our first step is conducing a pre-diligence analysis. We evaluate all the areas that a buyer will be scrutinizing and work to address any issues before they negatively impact negotiations.

This process involves a compete financial overview and practice analysis. We look at collections, compare expense categories to standard benchmarks, analyze doctor take home income, review practice staff, and highlight dental specific metrics such as hygiene profitability, procedure mixes, fees and more. 

We then perform a valuation and assemble a marketing document called a ‘Confidential Information Memo’, or CIM. This package puts your practice in the best light, answering buyer questions and highlighting what makes this practice such a good option for potential buyers.

Your broker will then use their access to the market to put your practice in front of as many potential buyers as possible. This will usually include some mixture of trade publications, journals (especially for specialty practices), online marketing, and direct mail.

Different brokers offer different levels of confidentiality in their advertising. Some make it very easy to figure out that your practice is for sale without making the buyer sign any type of confidentiality document (a Non-Disclosure Agreement). In my opinion, this poses a significant risk of patients and team members discovering the practice for sale, which could lead to a messy transition and ultimately devalue your practice.

Remember: the value of your practice is protected when you carefully manage the transition and introduce the patients and staff to the new doctor in a way that will maintain the goodwill you've worked so hard to build.

Managing the Transition Process

The Deal Process

Once a qualified and willing buyer has been identified, your agent will work with both buyer and seller to negotiate a fair deal. This involves several important steps.

Letter of Intent: The first step is for the buyer to submit a Letter of Intent (LOI) to the seller. This non-binding agreement summarizes the basic terms and conditions of the transition. We provide this document to buyers and help our sellers select the most compelling offers (which are not always the offers with the highest price). 

Due Diligence: This is when the buyer verifies all the details of the practice. Some buyers hire management consultants, accountants do reviews of books and records, and equipment specialists review the office setup. 

Financing: Any competent broker has options for helping buyers find the right financing options. Typically, this involves submitting both a seller package with details about the practice and a buyer application with personal financial information from the buyer. The decision to lend involves both sides making sense - just because a buyer is denied financing doesn’t mean the practice isn’t valuable. It can mean that the buyer doesn’t have the financial or professional qualifications to take on the practice. 

Lease: Unless you own your facility (and have the option to either sell or become a landlord yourself), working with landlords to get the buyers a new lease or transferring your current lease to the new buyer is a key part of the transition and must be managed with care.

Purchase and Sale Agreement: Once due diligence is complete, the attorneys will work out the Purchase and Sale Agreement (PSA), which spells out all terms and conditions of the deal, including handling AR and credit balances, asset allocation, warranties and retreatment, covenants not to compete, and more. 

Navigating the Legal and Financial Complexities

Tax Implications and Optimization

One of the most complex aspects of selling your practice involves tax planning. The structure of your sale can significantly impact your tax liability, and proper planning can save you thousands of dollars.

Asset Allocation: How the purchase price is allocated between goodwill, equipment, and other assets affects your tax treatment.

Installment Sales: Sometimes accepting payments over time can provide tax advantages while ensuring steady income.

State Considerations: Tax implications can vary significantly by state, so local expertise is crucial.

Legal Considerations

Purchase Agreements: These documents spell out every detail of the transaction and protect both parties' interests.

Lease Transfers: Lease negotiations can sink a deal. I've seen it happen, and it's not pretty. If you lease your space, it is a good idea to review the lease as early as possible. Because the lender typically requires that the terms of the lease run as long as the loan, lease negotiations can hold up financing.

Non-Compete Agreements: These protect the buyer's investment while allowing you appropriate freedom in your post-sale activities.

HIPAA Compliance: Patient record transfers must be handled properly to maintain compliance and protect patient privacy.

Closing the Deal and Transitioning

Staff and Patient Communication

Shortly before escrow closes, it's time to introduce the buyer to the team. Once you close escrow (and not before!), start introducing the buyer to your patients. This is a process that should be carefully managed, and there are several good strategies for a smooth transition that are easily adopted.

The key is maintaining the relationships and trust you've built while ensuring continuity of care. I've seen practices lose significant value during poorly managed transitions, and I've seen others actually grow stronger under new ownership when the transition is handled well.

Remember that before you find a buyer, it is crucial that you continue to work as normal. Continue to accept new patients, stock supplies, schedule patients, keep up with recall, and all the other details that make a dental practice run smoothly. You're selling a fully-functioning business, so don't do anything that would stop the business from prospering.

Post-Sale Considerations

Ongoing Involvement: Decide whether you want a clean break or ongoing involvement. Many sellers find value in mentoring the new owner through the transition.

Non-Compete Compliance: Understand your obligations and ensure you're comfortable with the restrictions.

Financial Planning: Work with your financial advisor to manage the proceeds from your sale properly.

Ready to Explore Your Options?

Selling your dental practice is undoubtedly one of the most significant decisions you'll make in your career. While the process is complex—involving financial preparation, legal considerations, market timing, and emotional readiness—it's absolutely manageable with proper preparation and the right professional team.

The key points to remember:

• Start planning 3-5 years before you want to sell
• Maintain strong financial performance right up to the sale
• Work with experienced professionals who specialize in dental practice transitions
• Understand your market and buyer options
• Be prepared for a process that typically takes 6-12 months once you go to market
• Focus on maintaining practice value through proper transition management

I've had the privilege of helping hundreds of dentists through this process, and while each situation is unique, the fundamentals remain consistent. With proper preparation, realistic expectations, and professional guidance, you can achieve a successful transition that honors your legacy while providing the financial security you've worked so hard to build.

Whether you're just starting to think about a potential sale or you're ready to begin the process, remember that this is a journey best traveled with experienced guides who understand both the business and emotional aspects of practice transitions.

Consider Talking to Integrity Practice Sales

If you're exploring selling your dental practice or want to understand what your practice might be worth in today's market, we're always happy to have a frank, confidential conversation about your practice and your options at this stage of your career.

At Integrity Practice Sales, we've helped hundreds of California dentists transition successfully by making the process clear and always working with integrity. We have agents located across California to provide local, hands-on service near you.

Contact us today for a no-cost, no-obligation consultation. Whether you're ready to sell now or planning for the future, we're here to provide the guidance and support you need to make the best decision for your practice, your patients, and your future.

Give me a call if you'd like to discuss your specific situation. I'm here to help you navigate this important decision with the wisdom that comes from having walked this path with hundreds of practitioners before you.