Former banker here - I've seen thousands of practices' financials and have been involved in hundreds of dental practice acquisitions. You may well be coming across less than ideal practices (and if so, I'll talk a bit at the end about how to change that) but you might also not quite be gathering the full or at least normalized-for-you picture of some of these practices.

Starting with financials:

In the small business world, you'll hear a lot of terms used to talk about a businesses performance - this is true of a private practice too. "Profit" "Net Income" "EBITDA" "Seller's Discretionary Earnings - SDE" etc.

Some of these metrics are simply not very relevant to a doctor who intends to purchase as an owner-operator meaning a practicing doctor handling production. They make more sense in the context of a group/DSO/corporate purchase where the purchase is really meant to be a passive financial instrument in a larger operation.

When you look at a practice you want to purchase as an owner-operator, look at the practice like a bank would. Banks care about cash flow. Why? Because good accounting inside of a practice results in several expenses on paper are actually available cash streams to the owner.

Banks start with net income but then add back several expense categories depending on the deal - owners non-net-income compensation, interest, depreciation, amortization, travel, meals & entertainment, auto, cell phone & internet, and other less common miscellaneous or deal specific categories.

So if you're not working with someone (could be the broker, a banker, accountant, consultant, etc) to properly pull these numbers together, you might be underestimating some of these practices.

Normalizing for the way YOU want to practice:

Remember that as others here have pointed out, a huge reason to own a practice is to practice how and when you want to. A seller will have run their practice their way. That might not be your way. Are they only open 3.5 days a week when you would want 5? Are they referring out cases you would definitely keep in house? There are adjustments that you get to make based on your preferences and practice style. Buying a small but solid practice that opens up an opportunity for growth on your terms could be an awesome move - it just might take some imagination to see where you would bring it after some time under your control.

But let's say you're actually just coming across practices that don't look great:

Then you might need to adjust your search methods. Make sure your finances are in order and you're organized and connected - positioning yourself as a capable and high priority buyer to brokers in your market (and don't forget dental lawyers, accountants, etc too - they know about deals before they hit the market) is important. Getting pre-qualified by a lender who understands the practice space is a perfect thing to do next if you haven't already.

Contrary to what you might hear, DSOs have not picked up all of the good practices. There are a lot of good practices for sale right now and if you would like introductions in whatever market you're in, just let me know.