For many dentists, the first step toward selling their practice is calling a broker and getting a valuation. It feels logical. Brokers have been around for decades. They know the market, they give you a number, and that number becomes the foundation for your expectations. But in today’s DSO-driven market, relying on a traditional broker valuation is one of the most expensive mistakes you can make.
Broker valuations often use outdated methods that do not reflect what sophisticated buyers actually pay for. The result is millions of dollars in hidden equity left on the table. The market has changed. The way your practice is valued must change with it.
Traditional brokers built their valuation models for a different era.
For decades, dental practices were sold primarily to other dentists. These buyers were typically individuals purchasing a single practice, often with financing tied to collections or a simple profit multiple. To make the process quick, brokers relied on rule-of-thumb formulas.
A common method is to value a practice at a fixed percentage of annual collections or apply a flat multiple to net income. These shortcuts may have worked when the only buyers were other doctors looking to step into the seller’s shoes. But they fall apart when DSOs enter the picture.
DSOs are not buying jobs. They’re buying businesses. They analyze practices the way private equity analyzes companies. They’re looking at sustainable earnings, operational systems, growth capacity, risk, and scalability. None of that is captured by a quick broker formula.
When you base your expectations on a traditional broker valuation, you’re using yesterday’s math for today’s market. And that can be a seven-figure mistake.
DSOs do not care about simple top-line numbers.
They care about EBITDA, which stands for earnings before interest, taxes, depreciation, and amortization. This is a measure of operational profitability. DSOs pay multiples of EBITDA, not collections.
But it goes deeper than that. DSOs also analyze the quality of earnings. They look at how sustainable those earnings are after the selling doctor steps back. They study hygiene programs, staffing stability, referral patterns, payer mix, and operational systems. They assess risk. The lower the perceived risk, the higher the multiple they are willing to pay.
Traditional broker valuations almost never take this level of analysis into account. A broker might look at a three-million-dollar practice and say, “This is worth 75 percent of collections.” A DSO might look at the same practice, see one million in EBITDA, strong systems, and room to grow, and offer six times earnings. That is a six-million-dollar offer. The broker number might be two point two five million. The gap is staggering.
I’ve seen this scenario play out repeatedly.
A doctor calls a broker, gets a valuation based on outdated formulas, and mentally anchors to that number. They then enter the market expecting two to three million for a practice that, properly positioned, could command twice that.
In one case, a multi-location practice producing over four million in collections received a broker valuation of three million based on a percentage of revenue. The owner almost accepted an offer from a solo buyer at that price. Fortunately, before signing, they pursued a strategic DSO valuation. By highlighting the practice’s operational strength and growth potential, the deal ultimately closed with a DSO for just under seven million.
Nothing about the practice changed. What changed was who valued it and how.
A broker valuation is designed to get a practice sold. A strategic DSO valuation is designed to maximize what the seller receives. Those are two very different objectives.
DSOs are not looking for bargains. They’re looking for high-performing assets. If your practice is one of them, you deserve to be valued based on what it is truly worth in the current market. That requires a valuation method that looks at your practice through the eyes of a sophisticated buyer.
Strategic positioning is more than numbers. It involves presenting the practice’s operational strengths, growth opportunities, and stability in a way that resonates with what DSOs value. That is why practices that take the time to position correctly consistently receive offers that exceed traditional broker estimates by millions.
As of late 2025, the DSO consolidation wave is well into its peak.
Nearly half of all dental practices are now affiliated with a DSO. Private equity capital is still flowing, and strategic buyers are competing for the best practices. But DSOs are becoming more selective.
Practices that are well-positioned receive multiple offers and premium valuations. Practices that rely on outdated broker numbers risk undervaluing themselves or leaving money on the table. In some cases, they never even enter the DSO market because they assume their practice is worth less than it truly is.
I’ve been directly involved in over two hundred million dollars in dental practice transactions and indirectly involved in over two hundred million more.
I’ve seen the difference between a traditional broker valuation and a strategic DSO valuation. The gap is often measured in millions.
If your practice is generating more than one million dollars in revenue, you owe it to yourself to get a clear picture of its true value. My team and I offer a comprehensive appraisal and positioning report, valued at $2,743, at no cost to qualified practice owners. This analysis looks at your practice the way DSOs do, identifying hidden value and strategic improvements that can elevate your sale price.
The market has changed. The smartest practice owners are changing with it. Do not let outdated methods define your legacy. A broker valuation might give you a number. A strategic DSO valuation can give you the real value you have worked your entire career to build.
To your unstoppable success,
Your Team at Everything DSO