What is my dental practice worth? How dental practices are valued in Australia.
A dental practice is usually valued as a multiple of its maintainable earnings, after allowing a market fee for the principal dentist's own clinical work. That step matters more than in most businesses: much of a practice's profit is often the owner's own dentistry, and a buyer will have to pay someone to do it. Equipment and fit-out are normally included in the price. What moves the value most is how many patients come back each year, how much of the practice depends on you, the team of associates and hygienists, and the lease.
This guide covers general dental practices, including those with associates, hygienists or oral health therapists. Specialist practices (orthodontics, endodontics, oral surgery) follow the same logic but depend even more on referrers.
Start with maintainable earnings
Start from net profit before tax and add back the usual owner items: depreciation (often large, because of chairs, imaging and sterilisation equipment), interest, private use of a car, and genuine one-off costs. Add-backs explained.
Then make the dental-specific adjustment:
- A market fee for your own dentistry. If you treat patients and take your income as profit rather than a wage, a buyer has to ask what it would cost to pay another dentist to do that work. Associates are commonly paid a share of the fees they collect, often around 35–45%. Deduct that cost for the work you do, so the earnings reflect a practice that doesn't rely on you working for free.
- Unpaid or underpaid help, such as a partner who runs reception, the books or practice management, is costed at a market wage.
What's left is the profit the practice makes, separate from what you earn as a dentist. That is what a buyer is really paying for.
What moves the price
Active patients and recalls
- Buyers want to know how many patients have attended in the last 12 to 18 months, and how many are booked for or due a recall. A strong recall system is one of the most valuable things a practice can show.
- New patients per month, and where they come from (Google, referrals, health-fund networks, word of mouth), show whether the patient base is growing or ageing.
How much depends on you
If most fees come from the principal and patients come to see you, some will leave when you do. Buyers allow for that with a lower price, or ask you to stay on for a handover period, often several months to a year working as an associate. Practices where associates already do a large share of the dentistry are easier to sell and usually worth more.
Associates, hygienists and staff
- Show each practitioner's share of fees (names removed at first), how long they've been there, and whether they're employees or contractors.
- Payroll tax on payments to contractor dentists has been tested in some states. A buyer's accountant will check how your associates are engaged, so have the agreements ready.
- Hygienists and oral health therapists add capacity and recall income. Nurses and front-desk staff who know the patients help the practice keep running after the sale.
Fee mix
Know your split between private fees, health-fund preferred-provider arrangements and government schemes such as the Child Dental Benefits Schedule. Preferred-provider agreements and provider numbers are usually personal to each dentist and location, so a buyer and their dentists will need their own. Allow time for this before settlement.
Equipment and compliance
- List the chairs, X-ray and OPG equipment, any CBCT, sterilisation equipment and practice software, with age, condition and any finance.
- X-ray equipment is registered and licensed under state radiation-safety rules. Check what needs to transfer or be re-registered by the buyer.
- Infection-control records and current accreditation, if you have it, reassure buyers.
Patient records
Patient records go with the practice, but privacy law applies. Plan how patients will be told about the change of ownership, and make sure the records system and backups transfer cleanly.
The lease and fit-out
Dental fit-outs are expensive to build, so a buyer will want a long lease, with options, at the current premises. Check the make-good clause: removing plumbing, suction and cabinetry at the end of a lease can be costly, and buyers factor it in. Ownership rules for dental practices vary, so check whether any apply in your state before marketing to buyers who aren't dentists.
A worked example
All figures are illustrative, made up for this example, and are not industry data.
A suburban general practice has three surgeries. The principal dentist works four days, one associate works three days on a fee share, and a hygienist works two days. The principal's partner manages the practice part-time without pay. Net profit before tax was $310,000, and the principal takes no wage: their income is the profit. The principal's own dentistry collected $600,000 in fees.
| Item | Amount |
|---|---|
| Net profit before tax | $310,000 |
| + Depreciation (chairs, imaging, sterilisation) | $45,000 |
| + Interest on equipment finance | $12,000 |
| + Private use of the principal's car | $5,000 |
| – Market fee for the principal's dentistry (40% of $600,000) | –$240,000 |
| – Market wage for the partner's unpaid practice management | –$35,000 |
| Maintainable earnings (EBITDA) | $97,000 |
If buyers were paying, say, 2.5 to 3.5 times earnings for a practice like this (illustrative), it would be worth about $245,000 to $340,000, including the chairs, equipment and fit-out.
That's very different from "the practice makes $310,000 a year", because $240,000 of that is the principal's own work. Two things would move it within the range: how many patients stay once the principal steps back, and whether the associate stays. A long handover and a settled associate push it toward the top.
What buyers of dental practices will ask for
- Two to three years of profit and loss statements, plus the current year to date
- Fees by practitioner, and the mix of private, health-fund and government work
- Active patient numbers, new patients per month, and recall rates
- Associate and staff agreements, roles, hours and pay (no names at first)
- A list of equipment with age, condition, finance and radiation registrations
- The lease, including options, the current rent and the make-good clause
- Accreditation and infection-control records, if you have them
Selling it yourself? How to sell your business yourself in Australia. Not sure about appraisal versus valuation? Business appraisal vs valuation.
What's your practice worth?
Upload your P&L, and add your lease and staff list if you have them. AUS Brokers works out your maintainable earnings with the add-backs explained, applies the multiple range for practices of your size, and checks comparable practices for sale in your state. You can add a buyer-ready profile to market it yourself.
An indicative business appraisal only. AUS Brokers doesn't provide valuations, and doesn't act for buyers or sellers. If you need a valuation for finance or a partner buy-out, use a qualified valuer. Selling in Victoria? Vic Brokers can sell it for you.
Frequently asked questions
How much is a dental practice worth in Australia?
It depends mainly on its maintainable earnings: the profit after adding back owner items and deducting a market fee for the principal's own dentistry. That figure is multiplied by what buyers pay for practices of that size. A strong recall system, settled associates and a long lease push the price up.
Why deduct a fee for my own dentistry?
Because a buyer has to pay someone to do that work. If the principal's clinical income is counted as profit, the practice looks far more valuable than it is to anyone who isn't you.
Will I have to stay on after the sale?
Often, yes. Buyers commonly ask the principal to stay for a handover period, working as an associate, so patients are introduced to the new dentist. The more the practice depends on you, the longer they'll want.
Are the chairs and equipment included in the price?
Usually yes. Chairs, imaging, sterilisation equipment and the fit-out are normally part of the price. Any finance on equipment has to be paid out or transferred at settlement.
Do health-fund agreements and provider numbers transfer?
Usually not automatically. Provider numbers and preferred-provider arrangements are generally personal to each dentist and location, so the buyer and their dentists will need to arrange their own.
Is an appraisal enough for a bank or a partner buy-out?
No. An appraisal is an indicative estimate to help you plan and price a sale. For finance, a partner buy-out, family law or tax, you need a formal valuation from a qualified valuer.
General information only, not financial, tax or legal advice. Figures in the worked example are illustrative.