How much of my practice's value depends on me staying?
DSOs price the risk that production leaves with the owner. This estimator shows how your valuation changes across three exit scenarios, and how much it would improve if you shifted production to an associate before selling.
Provider Dependency Risk Estimator
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Talk to DentalDexWhy does provider dependence lower a dental practice valuation?
Because a DSO is buying future cash flow, and if most of the dentistry is produced by the person leaving, that cash flow is not yet transferable. The buyer has to recruit, onboard, and retain a replacement while hoping patients stay.
Owner share of production is the largest single driver. A practice where the owner produces 80% and exits at closing can lose a full turn or more of EBITDA in multiple, or see most of the price moved into an earn-out. The same practice with the owner at 35% and two associates barely moves. Hygiene strength and associate coverage are the two things that offset it.
| Factor | Exit at closing | Stay 3 years |
|---|---|---|
| Owner share over 70% | −1.5x | −0.25x |
| Owner share 40–70% | −0.75x | 0 |
| Owner share under 40% | −0.25x | +0.25x |
| No associate | −0.5x | −0.25x |
| Two or more associates | +0.25x | +0.25x |
| Hygiene under 20% | −0.25x | −0.25x |
| Hygiene over 30% | +0.25x | +0.25x |