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Guide · Buying and selling
How much is my dental practice worth?
Practice valuation is more predictable than most owners expect. It rests on profitability, the mix and security of income, and how dependent the practice is on the person selling it.
UK dental practices are usually valued on a multiple of adjusted profit, most often EBITDA restated to reflect what the business would earn under a new owner paying market rate for clinical work. The multiple depends on size, income mix, the security of NHS contract income where it applies, associate stability and how much of the goodwill sits with the departing principal. Larger, less owner dependent practices attract higher multiples. Turnover on its own tells you very little, which is why two practices with identical turnover can be valued very differently.
- Usual basis
- Multiple of adjusted profit
- Key driver
- How owner dependent it is
- Also matters
- Income mix and contract security
- Get advice from
- A dental specialist valuer
What buyers are actually buying
Future profit that continues after you leave. Everything in a valuation is a judgement about how much of the current profit survives the handover. A practice where the principal does most of the high value treatment is worth less than one where several associates do, even at the same turnover.
How the figure is usually reached
Profit is adjusted to reflect a commercial reality: the owner replaced by an associate at market rate, personal costs stripped out, one off items removed. That adjusted figure is multiplied by a factor reflecting risk and attractiveness. A valuer will also sense check against comparable completed sales rather than asking prices.
What raises the multiple
Scale, a stable associate team on proper contracts, a healthy private mix, recurring plan income, a modern well maintained surgery, good systems and clean records. Multi site groups attract more than single sites, which is why consolidation happens.
What lowers it
Heavy reliance on the principal, a short lease or an awkward landlord, ageing equipment, a single associate carrying much of the income, poor records, and any regulatory concern. Undocumented arrangements of any kind reduce what a buyer will pay, because they represent risk.
What you can improve before a sale
Most of it takes twelve to twenty four months, which is why the conversation should start early. Reduce owner dependency, formalise associate contracts, sort the lease, tidy the records, and build recurring income through a plan. Marketing helps here too: a practice with a steady flow of new patients from a source that continues after you leave is demonstrably less risky.
The part most owners overlook
Goodwill that lives in a Google listing, a domain and a set of reviews is genuinely part of what is being sold, and it is often held in the wrong name or controlled by a former agency. Establish who owns the domain, the listing and the ad accounts long before completion.
Where it usually goes wrong
The mistakes we see most often, in roughly the order they cost the most.
- Judging value on turnover rather than adjusted profit
- Leaving the lease unresolved until due diligence
- Doing all the high value treatment yourself right up to the sale
- Informal associate arrangements with nothing in writing
- Letting equipment age in the final years to protect short term profit
- Not knowing who controls the domain, the Google listing and the reviews
Questions and answers
Common questions.
How are UK dental practices valued?
Usually as a multiple of adjusted profit, with profit restated to show what the business earns under a new owner paying market rate for clinical work. The multiple reflects size, income mix, associate stability and owner dependency.
Is my practice valued on turnover?
No, and this is the most common misunderstanding. Two practices with identical turnover can be valued very differently depending on profitability, who produces the income, and how much of it continues after the principal leaves.
What increases the value of a dental practice?
Lower owner dependency, a stable associate team, a healthy private and plan income mix, a secure lease, modern equipment, clean records, and a demonstrable flow of new patients that continues after the sale.
How long before a sale should I start preparing?
Twelve to twenty four months if you can. The things that move the figure most, reducing owner dependency and formalising contracts, take time and cannot be fixed in the weeks before due diligence.
Do reviews and online presence affect value?
They are part of the goodwill being sold, and a buyer will notice a practice with a strong local presence. More practically, if the domain or Google listing is held in the wrong name it becomes a problem at completion.
Who should value my practice?
A dental specialist valuer or broker. General business valuers rarely understand NHS contract treatment, associate arrangements or how dental goodwill behaves.
Related
Where this connects.
Next step
Want to talk it through?
Thirty minutes, no obligation, and we will tell you honestly which parts of this apply to your practice and which do not. If the answer is that you do not need us, we will say so.