Most value erosion happens long before a practice ever goes to market.
Operational weaknesses don’t just slow deals—they directly reduce multiples.
Buyers don’t pay for revenue—they pay for predictable, low-risk revenue.
And nothing kills valuation faster than operational weaknesses that signal instability.
These are the issues PE firms, lenders, and DSOs flag immediately during diligence.
Fixing them 6–12 months before a sale can increase your valuation by 1–2×. For confidential guidance, contact Managing Director, Dr. Azza Diasti-Kennedy, azza@evergreenforfounders.com
1. Associate Turnover—The #1 Deal-Killer
If associates leave frequently, buyers assume:
- Cultural issues
- Poor onboarding
- Leadership instability
- Unreliable transition plans
One associate leaving during diligence can delay or destroy a deal entirely.
2. Weak Hygiene Production
If hygiene produces less than 25% of total production, buyers see:
- Weak recare
- Low perio adherence
- Lower lifetime patient value
- Weak predictable revenue
Hygiene is the heartbeat of valuation.
3. PPO Over-Dependence
If 60–80% of your patients are low-fee PPO:
- Margins collapse
- EBITDA weakens
- Lenders get nervous
This reduces multiples by 1–3× depending on size.
4. Owner-Heavy Production
If the owner produces more than 65–70% of collections:
- Transferability risk skyrockets
- Buyers worry about patient attrition
- Your practice becomes “you-dependent”
We help owners shift production strategically before sale.
5. Month-to-Month Revenue Volatility
Buyers want predictable trends—not spikes and dips.
Volatility = higher risk = lower multiple.
6. Overstaffing or Overpaying Relative to Revenue
Buyers compare payroll against industry benchmarks:
- Front desk staffing ratios
- Hygiene wages vs. reimbursement
- Assistant-to-provider ratios
If payroll is inflated, buyers reduce valuation to compensate.
Additional Emerging Buyer Concerns
- Weak clinical documentation
- Inconsistent coding patterns
- Lack of standardized treatment philosophy
- Unprofitable satellite locations
The Good News
Every value killer is fixable—and early preparation increases multiples dramatically.
Evergreen’s pre-market operational cleanup is designed to reduce risk before buyers ever see your numbers. Prepared practices don’t just sell. They sell at a premium.
Contact Us
If you’re a dental practice owner exploring a future sale—or simply want to understand how operational decisions today impact valuation tomorrow—the Evergreen team can help. We work with owners well before a transaction to identify risk, strengthen operations, and position practices for premium outcomes when they go to market.
To learn how Evergreen’s pre-market operational and valuation support can protect and enhance your multiple, contact Managing Director, Dr. Azza Diasti-Kennedy, for a confidential conversation: azza@evergreenforfounders.com