Selling your dental practice is one of the most significant financial and personal decisions you will ever make. For dentists in North Dakota, the current market presents a unique set of opportunities and challenges. This guide offers a clear overview of the landscape, from understanding your practice’s value to navigating the final transition. It is designed to give you the initial insights needed to begin planning your next chapter with confidence.
Curious about what your practice might be worth in today’s market?
Market Overview
The market for dental practices in North Dakota is strong, characterized by high demand and lower-than-average competition. This creates a favorable environment for practice owners who are considering a sale. Many factors contribute to this, but a few stand out.
High Demand, Low Saturation
North Dakota has more residents per dental practice than the U.S. average, with approximately 4,435 people for every general practice. This indicates a patient base that is actively seeking care. In 2023, a significant number of counties had no practicing dentists at all, highlighting deeply underserved areas and opportunities for growth. This unmet demand makes existing, well-run practices highly attractive to potential buyers.
A Stable Patient Base
The state’s demographics point to a reliable and stable patient population. North Dakota has a lower poverty rate and a higher high school graduation rate than the national average. This signals a community with stable employment and the means to seek regular dental care, providing a consistent revenue stream for your practice.
Timing your practice sale correctly can be the difference between average and premium valuations.
Key Considerations
A successful sale doesn’t happen by chance; it happens by design. The most important step you can take is to start planning early. Buyers and lenders evaluate a practice based on three to five years of financial data, with the most recent years carrying the most weight. This means a last-minute push to increase production rarely moves the needle. Instead, focus on sustained performance. Buyers look for clean financials, healthy collections, and well-managed overhead, ideally below 65%. They also look for a practice that has kept up with technology, like digital x-rays. Thinking about these factors a few years before you plan to sell gives you time to optimize your practice and command a premium value.
Proper preparation before selling can significantly increase your final practice value.
Market Activity
The dental M&A market in North Dakota is active, driven by two key trends. Understanding these dynamics will help you position your practice effectively.
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The Coming Retirement Wave
According to recent data, a large portion of North Dakota’s dentists are nearing retirement. Over half of the state’s practicing dentists plan to retire within the next 10 years. This signals a coming wave of practice transitions, which will increase the supply of practices for sale and create a more competitive selling environment. Owners who prepare and act strategically now can stand out from the crowd. -
A Diverse Buyer Pool
Today’s market includes more than just individual dentists looking to buy their first practice. Sophisticated group practices and Dental Service Organizations (DSOs) are actively acquiring in the region. These buyers have different criteria. DSOs often seek larger practices with over $1 million in collections and prefer owners who are willing to stay on for one to three years post-sale. Knowing your potential buyer helps you tailor your strategy.
Finding the right type of buyer for your practice depends on your specific goals.
Sale Process
Selling your practice is a multi-stage journey that goes far beyond simply finding a buyer. The process starts with a confidential valuation and strategic planning. From there, we create a compelling narrative around your practice and market it discreetly to a vetted pool of potential buyers. Once offers are received, the negotiation phase begins. This is a critical step where an experienced advisor protects your interests, particularly when dealing with large DSOs who have their own teams of M&A professionals. After a letter of intent is signed, the buyer conducts due diligence. The process concludes with legal documentation and a planned transition. Navigating these steps requires expertise in finance, law, and negotiation to ensure a smooth process and a successful outcome.
The due diligence process is where many practice sales encounter unexpected challenges.
Valuation
How much is your practice actually worth? The answer is more complex than a simple revenue percentage. True valuation is determined by your practice’s Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) multiplied by a market-based multiple. Adjusted EBITDA reflects your true profitability by normalizing for owner-specific expenses. The multiple is influenced by many factors, meaning no two practices are valued exactly the same. We find that owners who understand these drivers can actively work to improve them before a sale.
| Factor That Increases Value | Factor That Decreases Value |
|---|---|
| Strong, consistent collections | High, unmanaged overhead |
| Modern tech (digital x-rays) | Heavy reliance on a single owner |
| Multiple providers/associates | Outdated facility and equipment |
| Low staff turnover | Inconsistent new patient flow |
A comprehensive valuation is the foundation of a successful practice transition strategy.
Post-Sale Considerations
The closing of the sale is not the end of the journey. Your role after the transaction is a key part of the deal structure. Many buyers, especially DSOs, may want you to continue working in the practice for one to three years to ensure a smooth transition for patients and staff. You also need to decide what to do with the physical office. While keeping the real estate as a rental property seems appealing, it can be risky if a corporate buyer decides to move the practice, leaving you with a specialized, hard-to-fill building. Most importantly, finding a buyer whose philosophy of care aligns with yours is crucial for protecting your legacy and ensuring your dedicated staff and loyal patients are in good hands for years to come.
Not sure if selling is right for you? Our advisors can help you understand your options without any pressure.
Frequently Asked Questions
What makes the North Dakota dental practice market unique for sellers?
The market in North Dakota is characterized by high demand and lower competition, with more residents per dental practice than the national average and several counties lacking any practicing dentists. This creates an attractive environment for selling existing, well-run practices due to the unmet patient demand.
How should a dentist prepare their practice for sale in North Dakota?
Preparation should begin years before the sale, focusing on sustained financial performance. Buyers favor practices with clean financials, healthy collections, overhead below 65%, and modern technology like digital x-rays. Long-term sustained success is more valuable than last-minute production increases.
What factors influence the valuation of a dental practice in North Dakota?
Valuation is based on Adjusted EBITDA multiplied by a market-based multiple. Factors increasing value include consistent collections, modern technology, multiple providers, and low staff turnover. Factors that decrease value include high overhead, heavy reliance on one owner, outdated facilities, and inconsistent new patient flow.
Who are the typical buyers of dental practices in North Dakota?
Buyers include individual dentists, group practices, and Dental Service Organizations (DSOs). DSOs often prefer larger practices with over $1 million in collections and may want the seller to stay on for 1-3 years for a smooth transition. Understanding your buyer pool helps tailor your sales strategy.
What are important post-sale considerations for selling a dental practice in North Dakota?
Post-sale, sellers might be asked to stay on to ensure a smooth transition. Decisions about what to do with the physical office are critical—keeping it as rental property carries risks if the buyer relocates. Finding a buyer with aligned care values protects your legacy and ensures patient and staff stability.
