I want to touch briefly on the concept of “multiple” when it comes to calculating your practice’s value using EBITDA.

Before I get into it though,

You can read in-depth in my book “Everything DSO”, check that out here: {link}

So generally, buyers of your dental practice are prepared to pay a multiple of the adjusted EBITDA (see one of my previous emails with EBITDA in the subject to learn a bit more).

The average multiple across ALL industries is 3x (3 times the value), but for individual practices, I’ve seen multiples ranging from 4x to 6x.

How is this determined?

It’s all a balancing act between perceptions around value and risk. Higher perceived value increases the multiple, and higher perceived risk lowers the multiple.

In general you can often expect a higher multiple the higher your adjusted EBITDA.

To read in more detail, I highly recommend my book “Everything DSO”. Just click here to get a copy {link}