How to Value a Dental Practice in Illinois

Dental practices in Illinois are typically valued at 60–80% of annual gross collections, though modern DSO (Dental Service Organization) buyers and strong general practices with modern equipment and strong hygiene programs can command higher multiples. SDE multiples of 3x–5x are also used, particularly for practices producing over $1.5M annually.

What Buyers Focus On

Active patient count, recall rate, hygiene program revenue, payer mix (fee-for-service vs. insurance), and the age and condition of equipment are the primary value drivers. A practice with 1,200 active patients on a strong recall program and updated digital X-ray and CEREC technology is worth substantially more than one with 600 patients and aging radiographs.

Associate Transitions vs. Outright Sales

Illinois dental practice sales frequently involve a transition period where the selling dentist works alongside the buyer for 6–24 months. This protects patient retention and is often required by lenders. Practices with an associate already in place transition more smoothly and often sell at higher multiples.

Dental practices qualify for SBA 7(a) financing, which significantly expands your buyer pool to include new graduates and mid-career dentists looking to own rather than associate.

How Illinois buyers put a number on how to value a dental practice

This page is the valuation guide. It is not the sale-process playbook. Seller’s discretionary earnings (SDE) is the cash a full-time working owner can take after you normalize the books. Start with the tax return. Add owner pay and one-time costs. Subtract the wage you must pay to replace the owner.

Dental buyers still talk collections (often a 60–80 percent of trailing collections planning band) and, on smaller Main Street books, 3x–5x SDE. Recast hygiene as the transferable engine. Pull the selling dentist’s personal production if an associate will not replace it, and do not add back lab spikes or equipment promotions. Accounts receivable over 90 days are not collections.

Planning band on this vertical: 0.6x–0.8x SDE. That is a range, not a quote. BizBuySell’s Q2 2026 Insight Report showed a 2.7× cash-flow multiple across all reported closed deals. Do not use that marketplace average as this shop’s appraisal.

A worked planning example (illustration)

Illustration only — not a quote for any Illinois shop. A dental practice whose tax return shows $205,000 of net profit is not worth $205,000 × a rumor multiple.

Add back the owner’s $91,000 W-2 and payroll tax, $20,000 of discretionary benefits, $8,000 of accepted one-time cost, and $4,000 of personal expenses that a buyer will not run. Then subtract $73,000 of replacement labor if the owner still diagnoses, sells, or closes the books.

Adjusted SDE in this illustration is $255,000. At 0.75x, enterprise value is $191,250 before debt, working capital, holdback, and tax.

SDE line items buyers actually use

1. Reported net profit (tax return, not the marketing P&L)
2. + Interest expense
3. + Income taxes (not payroll, sales, or property tax)
4. + Depreciation and amortization
5. + Owner W-2, bonuses, and payroll taxes on the owner
6. + Discretionary owner benefits that a buyer will not keep (auto, personal travel, family on payroll with no role)
7. + Accepted one-time or non-recurring expenses
8. − Market-rate replacement labor for owner work that will not transfer
9. = Seller’s Discretionary Earnings (SDE)

What moves the multiple up or down

• Hygiene recall that does not depend on the seller’s charting
• Associate-ready production, not 100 percent owner-produced
• Payer mix a buyer can live with
• Current operatories and sensors
• A lease or condo the practice can stay in

What does not transfer with the price

The IDFPR dental license is personal to the dentist and does not transfer with the practice. Illinois professional-entity rules constrain who can own the clinical entity. The buyer needs their own license, a DEA registration if they prescribe, and a premises path for radiology. Medicaid and PPO payor contracts are not automatic assignments.

Diligence that changes the number

• Active patient count, hygiene-recall percentage, and new-patient flow
• Production by provider — seller vs associate vs hygiene
• Payer mix, PPO write-offs, and any Medicaid exposure
• Pan/CBCT and operatory age; software (Open Dental, Dentrix) ownership
• Real estate or lease, and whether the practice is associate-ready
• IDFPR and malpractice history on staying doctors

When you want the close calendar instead of the math, read how to sell. This page stays on value.

Documents to gather this week

1. Three years of signed business tax returns and matching P&Ls
2. Year-to-date P&L, balance sheet, and three months of bank statements
3. Current lease, amendments, and a plain-English remaining term
4. License and permit list, including who holds each card
5. Top-customer concentration (names redacted until an NDA)

A simple Illinois close calendar

Plan six to twelve months from cleanup to close on a prepared Main Street deal. Start CBS-1 and any Chicago or Cook notices at letter-of-intent, not the week of funding. Landlord consent often takes longer than the lender.

Related pages on this site

• Seller pricing page for this vertical
• How to sell
• How to buy
• Illinois business valuation
• Confidential consult

Educational only — not legal, tax, or a formal appraisal. Confirm bulk-sale notices, licenses, and tax allocation with counsel and a CPA.