What’s Your Dental Practice Worth in 2025?

If you’re a dentist who owns their practice, chances are this question has crossed your mind at some point: What would someone pay for my business if I decided to sell?

You’re not alone. Most business owners are curious about what their asset is worth - especially when they’ve poured years of effort into building it. And while it’s tempting to believe there’s a clear-cut formula that will magically deliver the answer, the reality is a bit more nuanced.

In this post, we’ll walk through the most common ways dental practices are valued in Australia in 2025. Whether you’re considering selling, buying, or just want to understand the market, this breakdown will help you cut through the noise.

The Myth of the Magic Formula

Let’s get this out of the way early: there’s no single method that works for every dental practice.

Yes, there are common valuation techniques. But each one has its own logic, limitations, and context where it makes the most sense. What works for a two-chair suburban clinic in Newcastle won’t necessarily apply to a 10-chair multidisciplinary hub in inner-city Melbourne.

So let’s break it down.

Equipment Plus Goodwill

This is the old-school approach - and still one of the most recognised.

In short, you assign a value to the equipment (chairs, x-rays, fit-out) and a separate value to the goodwill (your patient base, brand, reputation), then add the two together. Goodwill has traditionally been valued at around 30–50% of turnover, depending on risk, location, and profitability.

What works about it: This method helps vendors feel like they’re getting credit for everything in the room - from the OPG to the ultrasonic cleaner. And for many years, this was the go-to approach.

What doesn’t: Valuing equipment isn’t as objective as it sounds. A 5-year-old A-dec chair might still look and work like new - but is it worth its replacement value, its book value, or whatever you could get for it on Gumtree? Also, no matter how shiny your fit-out is, if your practice isn’t profitable, buyers will hesitate.

The 2025 lens: Buyers today are savvier and more focused on financial performance. This method is still useful - but it’s rarely enough on its own.

Multiple of Profit / EBIT / EBITDA

If you’ve ever watched Shark Tank, you’ll recognise this one. It’s the approach corporate buyers, aggregators, and financial investors typically use.

First, they assess the true profit of the business (often adjusting your P&L to reflect add-backs like personal expenses, one-offs, depreciation, etc.). Then they apply a multiple - usually somewhere between 2x and 5x - depending on the perceived risk and reward.

Why it works: It focuses on what most buyers care about: the business’s ability to generate profit. The lower the risk and the stronger the systems, the higher the multiple.

Where it can fall short: This method is geared toward investors who won’t be working in the practice. That means it doesn’t reflect the value to an owner-operator dentist. Say you’re taking home $390K annually, but your business technically makes little profit after adjustments. Under this method, your practice could be valued at zero - even though it provides a fantastic lifestyle and income for a buyer willing to step in clinically.

What’s changed in 2025: Corporate buyers are still active, but many are focused on major metro areas. Private buyers are making a comeback, particularly where interest rates have stabilised and long-term value is more attractive than short-term margin.

Multiple of Owner-Operator Take-Home

Now we’re talking the language of most dentists who want to buy a practice and work in it.

This approach adds together the net profit and the dentist’s clinical income, then applies a multiple (typically 1.2 to 1.75, depending on circumstances).

Why people like it: It captures the full benefit of owning and operating the business - not just the financials from an investor’s lens. For many solo practices and regional clinics, this is the most meaningful method.

Limitations: It doesn’t work for passive investors or corporate groups, and like the profit multiple method, it doesn’t automatically factor in how much the buyer might need to spend on new equipment.

In today’s market: This is often the most realistic model for valuing practices in regional Australia, or any practice where the buyer is going to roll up their sleeves and work.

But Here’s the Bigger Picture...

Even with all these methods, remember: a valuation is not a guarantee. It’s a best estimate based on available data, recent sales, market trends, and professional judgment.

Just like with property, the price someone is willing to pay depends on a range of dynamic factors:

• The strength of buyer demand in your location

• Current interest rates and lending conditions

• Your lease terms or property ownership

• Whether you, the vendor, are willing to stay on and support the transition

• How easily the practice can recruit dentists or staff

• The clarity of your financials

No valuation model can predict those human and market elements with perfect accuracy.

So, What’s the Right Answer?

There’s no single method that works for every practice - and that’s okay.

Each approach has value, and often the best way to understand your practice’s worth is to use multiple methods and compare. Most importantly, make sure you’re looking at the numbers through the right lens: are you selling to a corporate? A private buyer? An associate who wants to step up?

At the end of the day, the market will decide - but being informed puts you in the best possible position to negotiate with confidence.

Thinking of selling in 2025?

Speak with a trusted dental broker or adviser who understands both the numbers and the nuances. And don’t be afraid to ask how they’re calculating value - because behind every number is a story worth understanding.