The practice valuation guide
What Is My Dental Practice Worth?
Most UK dental practices sell for a multiple of adjusted EBITDA, not a percentage of turnover. Adjusted EBITDA is your profit once the accounts have been restated to show what the business earns without you. The multiple then depends mainly on how much of the income depends on you personally: solo, principal-led practices commonly sit around 4 to 5 times, while established associate-led private practices attract 7 times or more.
>£225 million
additional profit created across DWB client practices
30 years
experience as owners of group practices
200+
dental practices coached worldwide
01 / The practice valuation guide
Why every guide you read quotes a different multiple
That is the short answer. The longer answer is that two practices turning over exactly the same money can be worth double or half each other, and the reason is almost never clinical. This page shows you the arithmetic, including three worked examples, so you can estimate your own position before anyone gives you a number.
If you have already searched this, you will have found figures ranging from 2.5 times to 12 times, and no explanation of why they disagree. They mostly do not disagree. They are describing different practices and different buyers.
Solo, principal-led general practice: roughly 4 to 5 times adjusted EBITDA. Established private practice, associate-led: roughly 7 to 9 times. Premium private or multi-site group: 9 times and upward, sometimes well beyond.
A broker quoting "6 to 9 times" is usually describing the practices corporates want. An accountant quoting "4 times" is usually describing the average independent sale. Both are accurate about their own sample.
So the multiple is not a number you look up. It is a number your structure earns. Which is why the useful question is not "what is the multiple" but "which of those three descriptions is my practice, and can I move it into the next one".
02 / The practice valuation guide
Step one: find your adjusted EBITDA
EBITDA is earnings before interest, tax, depreciation and amortisation. On its own it is just a profit figure. What matters for valuation is the adjusted version, sometimes called normalised EBITDA, which restates your accounts to show what the practice would earn under a new owner. Two kinds of adjustment do almost all the work.
Add-backs: costs that leave with you
These are expenses in your accounts that a buyer would not inherit. They get added back, increasing your EBITDA: your own salary and dividends as owner; vehicle costs, your professional subscriptions and your indemnity; family members on payroll who do not work in the business; one-off costs such as a legal dispute, a refurbishment or a failed marketing project; and personal expenses run through the practice.
The replacement cost: the adjustment that hurts
This is the one owners are not expecting. If you do clinical work yourself, a buyer has to pay somebody to do it after you leave. So your adjusted EBITDA is reduced by the cost of replacing you at the going associate rate, typically 40 to 45 per cent of the gross fees you personally generate.
Bill £400,000 yourself and you are looking at roughly £160,000 to £180,000 of replacement cost coming off your profit before a multiple is applied anywhere near it.
This single adjustment is why high-billing principals are so often disappointed by their valuation. The practice is profitable because you are working in it, and the buyer is not buying you.
03 / The practice valuation guide
Step two: apply the multiple your structure earns
Solo, principal-led: 4 to 5x. Income leaves with the owner.
Mixed, part associate-led: 5 to 7x. Some transferable earnings.
Established private, associate-led: 7 to 9x. Runs without the principal.
Premium private or multi-site: 9x+. Scale, systems, corporate appetite.
Ranges move with the market, lending rates and buyer appetite, so treat them as orientation rather than a quote.
04 / The practice valuation guide
Three worked examples
These are illustrative practices built to show the mechanics. Your own figures will differ, and no page can replace a professional valuation. But the arithmetic is the arithmetic.
Example one: the principal-led practice
Turnover £750,000. The principal personally generates £350,000 of it. Associates produce the rest. Profit before the owner's own drawings is £240,000.
A practice turning over three quarters of a million pounds, valued at under £440,000. Every owner who is shocked by their valuation is looking at some version of this calculation.
Example two: the associate-led practice
Same turnover, £750,000. This principal has stepped back and now generates only £50,000 clinically. Because associates take commission on far more of the work, the reported profit is lower: £150,000.
Identical turnover. Roughly £560,000 more, because the earnings survive the owner's departure. Note what happened to the reported profit: it went down, from £240,000 to £150,000. The practice that looks less profitable on paper is worth more than twice as much. That is the part almost nobody explains.
05 / The practice valuation guide
Example three: the same practice, two years apart
Take the practice from example one and move most of the principal's clinical work to associates over two years. Turnover grows modestly to £800,000 as capacity frees up. The principal now bills £100,000.
Against £438,750 two years earlier. The work was structural, not clinical, and it was worth roughly £490,000. That gap is the entire argument for planning an exit early rather than deciding to sell and calling a broker.
06 / The practice valuation guide
What moves your multiple
Owner dependency. The dominant factor, and the reason for the gap in the examples above. Valuers commonly reduce value by 10 to 20 per cent for heavy principal dependency before the multiple is even chosen.
NHS versus private mix. Buyers price the two differently. NHS income is contracted and predictable, which supports lending, but carries contract and policy risk. Private fee income is less certain but has more upside and fewer constraints. Plan income through Denplan or Practice Plan is prized because it recurs monthly and behaves like a subscription.
Your associate team. Contracted properly, settled, and capable of absorbing your list. High turnover or handshake arrangements read as risk.
Hygiene and therapist utilisation. Well-run hygiene commonly runs at a quarter to a third of collections and is high margin. Underused hygiene is visible upside for a buyer, which means they price it in their favour, not yours.
Quality of earnings. Three consistent years beat one exceptional one. A spike invites questions about whether it repeats.
Compliance and clinical governance. CQC standing, records, radiography audits, decontamination. Being right adds nothing. Being wrong costs you, because it becomes a warranty risk.
Premises. Freehold is usually valued separately from goodwill. A short or unfavourable lease is a genuine drag on a sale.
07 / The practice valuation guide
What a buyer adjusts that you did not
Most valuation guides are written by people who sell to you: brokers, accountants, solicitors. Fewer are written by people who have bought practices.
Dr Rahul Doshi was Clinical Director at Dentex while it grew to 180 practices in five years, and across more than 370 practices after the merger with Portman. From that side of the table, the adjustments that catch sellers out are consistent:
Associate rates below market. If your associates are on 40 per cent and the market is 45, the buyer restates your profit at the rate they will actually have to pay.
Your own hours, honestly counted. Not what you draw. What it costs to replace the work you do, including the admin and management nobody is paid for.
Deferred maintenance. Ageing chairs, an old imaging suite, a surgery that needs refitting. Capital expenditure they will have to make comes off the offer.
Concentration. One clinician, one referrer or one treatment carrying too much of the income.
Stock, WIP and lab liabilities at completion, which quietly move the final number after the headline is agreed.
None of this is hidden. It is simply invisible from where most sellers stand, and by the time it appears in a due diligence report the price has already been set.
08 / The practice valuation guide
When should you get a valuation?
Two to three years before you intend to sell, not when you are ready to leave.
A valuation obtained early is a diagnostic. It tells you what your practice is worth today, which of the three structural descriptions you fall into, and what the gap is between the number you have and the number you need. There is then time to do something about it, because buyers look at several years of trading and changes made in the final six months do not show up in the accounts in time.
A valuation obtained late is just a price.
09 / Your questions
Frequently Asked Questions
How much is my dental practice worth?
Take your profit before the owner's drawings, add back the costs that leave with you, subtract the cost of replacing your own clinical work at roughly 45 per cent of the fees you generate, then apply a multiple between about 4 and 9 depending on how associate-led the practice is. The worked examples above show the calculation in full.
Is a dental practice valued on turnover or profit?
Profit. Percentage-of-turnover rules of thumb are still quoted but have largely been replaced by adjusted EBITDA multiples, because turnover says nothing about whether the earnings survive a change of owner.
Why is my practice worth less than one with the same turnover?
Almost always because more of the income depends on you personally. See examples one and two, where identical turnover produces valuations roughly £560,000 apart.
Does NHS income make a practice worth more or less?
Neither automatically. NHS income is predictable and supports lending, which buyers like, but carries contract risk. Private and plan income carries less certainty and more upside. Buyers value the mix, not one or the other.
Is my freehold included in the valuation?
Usually valued separately from the goodwill. Practices sold with freehold property are typically priced as two components rather than one figure.
Do I need a formal valuation to start planning?
No, but you need an honest adjusted EBITDA. That single figure tells you more about your position than any headline turnover, and you can calculate a working version of it yourself using the method above.
10 / The next chapter
Find out where you actually stand
If the numbers above suggest a gap between what your practice is worth and what you need it to be worth, the useful time to know that is now, while there is still time to change it.
Your next chapter
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