Can You Sell a Dental Practice With Declining Collections?

He left the year-end report face-down on his desk for most of a week.

Not laziness. He already knew roughly what was inside it, the way you always know.

You watch the daily deposit. You notice how Tuesday looks a fortnight out.

By about October you have a fair idea of what December is going to say.

Down again. Second year running.

When he finally rang me, he did not open with a question about value. He opened with something nearer a confession.

I don’t think anybody would want it now.

He was wrong. And being wrong about that costs real money, because an owner who has privately decided his practice is unsellable starts behaving like somebody with no options, which is a posture buyers can read from a long way off.

Key takeaways

• A shrinking practice is still a sellable practice. Offices with falling collections change hands every month of the year, and some of them at strong numbers.
• Buyers do not price a trend line, they price a diagnosis. An identical 15% slide means two completely different things depending on what caused it.
• Owner-driven slides are frequently barely penalised. If a purchaser can reverse the gap by putting somebody in a chair, they read it as upside they get to buy.
• Some weaknesses are worth repairing first, others are better disclosed and priced. Getting that split wrong usually costs more than the shortfall itself.
• Whatever a buyer uncovers is worth far less than what you volunteer. Discovered problems become price adjustments. Disclosed ones become assumptions everybody underwrote at the start.

Can you sell a dental practice with declining collections? Yes. Offices with falling collections sell every year, and some sell well.

What decides the outcome is not the depth of the drop but its cause. A buyer prices a slide he can reverse very differently from one he has to solve.

Buyers do not price a trend line

Let me start with the part owners have backwards, because it is the whole argument.

A purchaser staring at three years of shrinking collections is not really studying the slope. Underneath, he is trying to settle one question. What has to be true for this to stop?

If the honest answer is put a dentist in the fourth operatory on Thursdays, that is arithmetic. He can arrange it inside his first quarter, and he has probably arranged it a dozen times before at other offices in his group.

If the honest answer is win back the families who now drive to the bright new place beside the grocery store, that is a market problem. It carries a budget, a timeline, and a genuine chance of failing.

Same percentage on the page. Completely different asset.

Two examples make it concrete. I have watched versions of both many times, so read them as the pattern rather than as anybody in particular.

Practice A collected roughly $2.85 million two years ago and about $2.42 million last year. Down 15%.

The cause is not mysterious. Its owner went from 4 clinical days to 3 after a shoulder problem he sensibly stopped ignoring.

His personal production fell by around $400,000. Hygiene held steady.

The associate held steady.

Practice B posted those identical figures across those identical years. Also down 15%.

But a competing office opened 1.2 miles away, new patients slid from roughly 46 a month to 29, and hygiene reappointment drifted out of the low 80s into the low 70s. Nothing whatever changed about its owner.

Practice A has a hole where one man’s Thursdays used to sit. Practice B has a leak, and the leak is still running.

The diagnosis framework

Before anything else gets decided, you need an honest answer to a plain question. Did this happen to the practice, or did it happen to the owner?

Most dentists already know. They simply have not written it down anywhere a buyer can check it.

What actually happened	Owner-driven or market-driven	How a buyer underwrites it
You cut back to 3 or 4 clinical days	Owner-driven	Reversible on day one by hiring. Read as capacity a buyer gets to fill, not decay
An associate left and was never replaced	Owner-driven	A recruiting problem the buyer believes he solves better than you. Frequently upside
A hygiene chair sat empty for months	Owner-driven, market cause	Buyers know hiring is brutal. They will test whether recall held while the chair was cold
Marketing was switched off to protect profit	Owner-driven	Cheap to restart. But they check whether new-patient flow recovers or the name went quiet
Illness, a bereavement, a divorce, a parent to care for	Owner-driven	The most forgivable slide there is. Documented, it is close to fully added back
A rival office opened inside your draw area	Market-driven	The hardest one. He must underwrite an ongoing contest for the same families
A large employer closed, moved, or switched carriers	Market-driven	A step change rather than a trend. Prices better once it has clearly stabilised
Your PPO reimbursement was cut, or a plan dropped you	Market-driven	Treated as a permanent margin shift unless the fee schedule can be renegotiated
The area’s demographics moved	Market-driven	Slow, structural, immune to effort. Underwritten conservatively
Your patient base aged alongside you	Mixed	He reads the age curve of active patients against the new-patient count

Two columns. Two entirely different conversations.

It is worth saying plainly that most real declines are mixed. A hygienist resigns, so recall slips, so the schedule thins, so the dentist drops a day rather than sit in an empty operatory.

That chain is utterly ordinary. It is not a character flaw.

You are also nowhere near alone in it. About one-third of dentists reported they were not busy enough heading into 2026, per ADA Health Policy Institute survey data, easing to roughly one-quarter by the second quarter of the year.

Schedules across the profession have been running near 88% full. And the reasons sit mostly outside anybody’s control: roughly 81% of dentists blame no-shows and cancellations inside 24 hours for the gaps in their day.

Why an owner-driven slide is often barely penalised

Almost nobody walks an owner through this arithmetic, so let me do it properly.

A buyer prices adjusted EBITDA — what the practice earns in pure operating profit after paying a market-rate dentist to do the work you currently do yourself.

Collections means the money actually collected, not what was billed or produced. Everything below runs off those two definitions.

Return to Practice A. Its owner dropped a clinical day, and about $400,000 of his own production went with it.

Now think the way the purchaser thinks. He was always going to pay a dentist to generate that production, because he is not buying your hands.

So the empty Thursday is not lost earnings to him at all.

It is an unstaffed shift.

Suppose he recruits an associate, and suppose that associate produces a conservative $320,000 in year one while a following builds.

Compensation at a market rate near 30% of production runs roughly $96,000. Lab bills and supplies on that production land somewhere around 13%, call it $42,000.

Most of the remainder falls to earnings. The rent, the front desk, the sterilisation bay and the practice management software are already paid for, so the fourth day consumes capacity that is simply sitting there idle.

Which is why a buyer looking hard at Practice A does not see a dying office. He sees a vacancy with margin attached.

Add-backs behave the same way. An add-back is a cost sitting in the financials that a new owner will never carry: genuine one-time or personal spending run through the practice.

Your medical leave. A one-off legal matter.

The six months you paid two hygienists through a handover.

The load-bearing word is documented. An add-back you can describe is worth nothing.

An add-back with an invoice, a date and a reason attached is worth its face value multiplied by whatever multiplier the market applies.

For the full bridge from collections down to a number, that is the job of our guide to what your dental practice is worth. I would rather not rebuild it here.

Market-driven decline is a different animal, and I will not pretend otherwise. A buyer facing a rival who took 17 new patients a month has to fund a response, then wait to learn whether it worked.

That uncertainty shows up in the price, and honestly it should. Pricing risk is legitimate underwriting, not bad faith.

What buyers actually examine when the line is falling

The trailing twelve months is where everybody starts. Nobody stops there.

The first thing a serious purchaser requests is monthly detail, not annual. Twelve yearly figures conceal everything.

Thirty-six monthly figures show precisely when the slope changed, and the month it changed is nearly always the month something specific happened.

Then production by provider, so he can see whose hands the shortfall came out of. Then hygiene as a share of collections, the reappointment percentage, and new patients counted month by month.

That last cluster is the tell.

Recall and new patients are an office’s two intake valves. A decline showing up in either one is structural.

A decline showing up only in the owner’s personal production column is not.

The 2026 buyer pool has grown noticeably fussier about exactly this. Trade reporting describes DSO acquirers scrutinising financials, operations and forward projections far harder than they did at the peak, and walking away from deals over provider risk and over-reliance on a single producer.

DSO here means a dental support organization: the management company that owns the non-clinical side of a practice and handles everything outside the operatory, while a licensed dentist keeps ownership of the clinical entity.

Fussier is not the same as closed. Around 69% of DSOs said they expected to raise acquisition activity in 2026, and ADSO member companies alone represent thousands of offices across nearly every state.

There is demand. It simply arrives with questions attached.

Which is fine. Questions have answers, and a prepared seller has his ready before anybody asks.

What to repair before you go to market, and what to leave alone

Not every weakness deserves fixing first. Some repairs pay for themselves several times over.

Others burn a year and produce a figure no buyer will believe anyway.

Worth repairing before you go to market	Better disclosed and priced
The hygiene schedule. Hardest hire, clearest signal of transferable revenue	A rival that opened nearby. You cannot un-open it, and a discount war shows up in your margins
The recall list. Reactivating dormant patients is cheap, fast, visible inside 90 days	A PPO fee schedule you have already tried to renegotiate and lost
Marketing, restarted 6 to 9 months out so there is a trend rather than a spike	A demographic shift. Buyers can read a census as well as you can
Your own clinical days, if you genuinely can and will sustain it	A year lost to illness or a family matter. Document it, do not manufacture a recovery around it
Documentation for every add-back, invoices attached	Equipment bought to look modern. Buyers rarely reimburse capital you just spent
Fee-schedule housekeeping on the contracts you can still move	A partial turnaround you cannot hold for two more quarters

One rule underpins that entire table. Never fix a decline by working harder yourself.

I understand the instinct completely. Collections fell, so you add the day back, you take the cases your associate used to handle, you drag production up 8% through sheer stubbornness.

It works. And it makes the practice worth less.

Every dollar you personally pull back inside deepens owner dependence, and owner dependence is the one thing acquirers discount hardest. You have converted a staffing problem into a personal-goodwill problem, and the second is considerably more expensive than the first.

Cosmetic cost-cutting has the same shape. Trim the marketing, defer the maintenance, stretch the supply order, and a single year of financials will look flattering.

All three surface in diligence. Once one surfaces, every other figure you presented gets read more sceptically.

The disclosure principle

This is the most valuable paragraph here, so it gets a section to itself.

A decline the buyer uncovers costs several times more than the same one you name up front.

Not because acquirers are punitive. Because of what discovery does to the shape of a deal.

Disclose the cause on day one and it becomes an assumption inside the model everybody agreed to. The offer gets built on top of it.

It is priced once, and then it is settled.

Let a purchaser find it himself in week nine of due diligence and three things move at once. The number moves.

The structure moves too, usually toward more of the price sitting in an earnout or a holdback — a slice of the proceeds the buyer retains for a defined period to stand behind your representations.

And his confidence in every other figure you supplied drops through the floor.

That third one is the real cost. Re-trades are rarely about the item that was found.

They are about what the finding implies regarding everything not yet checked.

Transaction counsel who handle these deals describe diligence as the phase where a buyer verifies financials, payer contracts, staffing and compliance in detail, and where price adjustments and indemnity terms get argued against whatever surfaces.

The architecture of the back half of a deal turns on what the buyer learns and when he learns it.

So put the reason on page one of what you send out. Write it as a paragraph, with dates.

“Collections fell 15% across 2024 and 2025. The cause is a reduction from 4 clinical days to 3 in February 2024 following a shoulder injury.

Hygiene and associate production were stable throughout.”

That sentence, offered on day one, is worth real money. It also tends to shorten the whole exercise, and the time a sale takes is itself a variable in your outcome.

When waiting is right, and when waiting is the costly choice

Owners ask me constantly whether they ought to repair the office first and sell in two years. Sometimes yes.

Frequently no, and the no case gets argued badly, so let me argue it properly.

Waiting is right when the slide is owner-driven, the remedy is identified, and you still have the appetite to execute it.

Hiring an associate, filling the hygiene chair and restarting recall all move the number by more than they cost. Eighteen months spent that way is well spent.

Waiting is right when the drop was a step change that has already levelled out. A lost employer contract landing inside one quarter creates a new baseline, not a trend, and four flat quarters on that baseline prove it to a sceptic.

Waiting is the costly choice when the decline is market-driven and still running. Another year buys another year of the same slope, and now your buyer is underwriting a three-year pattern instead of a two-year one.

It is costly for a second reason. A fall in earnings does not cost you the earnings.

It costs you the earnings multiplied. Shedding $100,000 of adjusted EBITDA while you wait strips several times that from the eventual price.

There is also a clock you may not be counting. Retirement ages have climbed, careers now run longer, and independent ownership fell from roughly 84.7% of dentists in 2005 to about 72.5% by 2023.

The pool of individual dentists positioned to buy an office outright is thinner than it once was.

Waiting further assumes the buyer market stands still. Appetite in dentistry has swung around considerably these past few years, and larger transactions have proved harder for sponsors to exit than they expected.

I would not build a personal financial plan on 2028 being friendlier than 2026.

The honest version, then. If the remedy sits in your hands and you want to do it, do it.

If you are waiting for the market to hand you a better year, you are paying for that wait twice: once in lost earnings, and again in the multiplier applied to them.

Why competition matters more here than anywhere else

Everything above is preparation. This last piece is the mechanism, and it matters more for a shrinking practice than for a thriving one.

With a single buyer at the table, a falling line is a lever. It is the most natural thing in the world for that buyer to point at the slope and use it.

No reasonable person would blame him for it either.

With four qualified bidders who each know the others are circling, the decline drops back to being one input among many.

Somebody in that group will look at your empty Thursday and picture the associate he already has waiting for a chair. Somebody else will care far more about your hygiene percentage than your trend.

The bidder who values what you actually own is the one who sets the price. You cannot know in advance which of them that will be, which is precisely the argument for having several.

That is what the Elite Selling System is built to create.

We hand-select and vet every buyer who gets to bid on your practice, the way a doorman with a velvet rope lets in only the right people, then run a private competitive window inside that group.

For an office with a clean rising line, competition adds. For an office with a story to explain, competition is what stops one buyer’s reading of that story from becoming the only reading on the table.

If you are sitting with a report you would rather not open, that conversation is worth having early instead of late.

It starts with a free, confidential practice value estimate, and it fairly often ends with us telling an owner to repair two specific things and come back next year.

Our fee varies depending on the value of the practice and is entirely success-based. There is nothing in it for us in talking anybody into a transaction that is wrong for them.

One last thing, about the shame

I want to finish on the part nobody says out loud.

Nearly every dentist who calls me about falling collections apologises somewhere in the first ten minutes. For the numbers.

For not addressing it sooner. For taking my time.

None of it is warranted, and I say so every time.

Reimbursement has grown more slowly than costs for years. Dental plan enrollment fell in 2024 even as spending on care rose.

Hygienists have been genuinely hard to hire, with two in five dentists reporting they did not have enough of them.

Roughly 17% of working-age adults have skipped needed dental care over cost, and Medicaid pays below half of what dentists charge across most states.

A slide in that environment is not evidence of a bad operator. Very often it is evidence of a market doing what markets do to a model built in a different decade.

What you control is the diagnosis, the paperwork, and the number of people bidding. That is a shorter list than it feels like at six in the evening with the report still face-down on the desk.

Every item on it is genuinely within reach.

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Frequently asked questions

Can I sell a dental practice with declining collections?

Yes. Practices with falling collections sell every year, and some sell well.

What decides the outcome is not the size of the decline but its cause. Buyers price a decline they can reverse very differently from one they have to solve.

How much will a decline actually reduce what I get?

It depends almost entirely on the diagnosis. An owner-driven decline a buyer can reverse by hiring is frequently barely penalised, because the gap reads as capacity they get to fill.

A market-driven decline that is still running gets underwritten conservatively, because the buyer must fund a response with an uncertain payback.

What if collections dropped because I cut back my own clinical days?

That is the most forgiving version there is. A buyer was always going to pay a dentist to do that production, so an unstaffed day is a vacancy rather than lost earnings.

Document when the change happened and why, then show that hygiene and associate production held.

Do I have to tell a buyer why collections fell?

You should, and early. A disclosed cause becomes an assumption everybody underwrote at the start.

A cause discovered in week nine of due diligence moves the price, pushes the structure toward earnouts and holdbacks, and makes every other number you presented look less reliable.

What happens if a buyer finds the decline during diligence?

Usually a re-trade. The number drops, more of the price gets shifted into contingent structure, and the buyer applies fresh scepticism to everything not yet verified.

The cost is rarely limited to the item that was found, which is exactly why disclosure is cheaper.

Should I fix the decline before I sell, or sell now?

Fix it first when the cause sits in your hands, the remedy is identified, and you have the energy for 12 to 18 months of execution. Sell sooner when the decline is market-driven and still running, because another year of the same slope costs you the lost earnings multiplied by the market multiplier.

Does a competitor opening nearby make my practice unsellable?

No, but it changes what a buyer has to believe. They are underwriting an ongoing contest for the same patients rather than a one-time reset.

Showing that new-patient counts and hygiene reappointment have stabilised on a new baseline is the most useful evidence you can bring.

Is it worth waiting for one good year before going to market?

Only if the recovery is genuine and sustainable. A partial turnaround you cannot hold for two more quarters tends to unravel in diligence and costs you credibility on everything else.

Buyers look at 36 months of monthly data, not one flattering annual figure.

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Sources

Practice conditions, patient volume and the dental economy

1. ADA Health Policy Institute. “The State of the U.S. Dental Economy, Q2 2026 Update.” ada.org
2. ADA Health Policy Institute. “The State of the U.S. Dental Economy, Q1 2026 Update.” ada.org
3. ADA Health Policy Institute. “Dental Practice Research.” ada.org
4. ADA Health Policy Institute. “Trends in Dentists’ Income, Revenue and Hours Worked.” ada.org
5. Becker’s Dental Review. “How patient no-shows, cancellations are affecting dental practices.” beckersdental.com
6. ADA Health Policy Institute. “Dental Hygienist Shortage.” ada.org
7. ADA Health Policy Institute. “Dentist Workforce.” ada.org
8. ADA Health Policy Institute. “Practice Ownership Trends in Dentistry: A New Look at Old Data.” ada.org

Reimbursement, payer mix and patient coverage

9. ADA Health Policy Institute. “Medicaid Fee-For-Service Reimbursement Rates.” ada.org
10. ADA Health Policy Institute. “Dental Coverage, Barriers, and Outcomes.” ada.org
11. ADA Health Policy Institute. “Main Barriers to Getting Needed Dental Care All Relate to Cost.” ada.org
12. National Association of Dental Plans. “Provider, patient benefits rose; dental plan enrollment fell in 2024.” nadp.org
13. National Association of Dental Plans. “Statistical Reports.” nadp.org

Buyer behaviour and the 2026 deal market

14. Group Dentistry Now. “Cautious Optimism: The DSO M&A Market in 2026.” groupdentistrynow.com
15. Becker’s Dental Review. “69% of DSOs plan to boost acquisitions in 2026: Report.” beckersdental.com
16. Becker’s Dental Review. “How dental M&A is evolving in 2026.” beckersdental.com
17. Association of Dental Support Organizations. “About ADSO.” theadso.org
18. PitchBook. “Pulling Teeth: Why Dental Sector Exits Have Been Tough for PE.” pitchbook.com

Transaction process, diligence and legal

19. Cranfill Sumner LLP. “Selling Your Dental Practice to a DSO: What to Expect Before, During, and After the Deal.” cshlaw.com
20. Mandelbaum Barrett PC. “The Four-Phase DSO Transaction Process: What to Expect When Selling a Dental Practice.” mblawfirm.com
21. Nixon Peabody LLP. “Five issues dentists and DSOs should address before signing a transaction.” July 2026. nixonpeabody.com