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Chip Fichtner

The Biggest Risk to Practice Values in 2025

by | Feb 25, 2025 | Insights, Insights, Orthodontics

Harley Davidson, Brunswick, the manufacturers of Boston Whaler boats and Johnson Outdoors the largest maker of kayaks, all recently reported dramatic declines in 2024 sales. Are boats, motorcycles and dentistry connected? Consumers are stressed.

Even at 24.37% national average interest rates, U.S. consumer credit card balances just set new record highs.

Auto loan defaults are also approaching new record levels last seen in 2008.

Your friends in DC tell us we have avoided a recession; the proverbial “soft landing”. I am not buying it. Like it or not, one is coming. When? I don’t know, but it is coming. Gold, the de facto global “fear gauge” is up 44% in the last 12 months. If your practice collections decline, for whatever reason, forget about a high value IDSO partnership!

Fact: Practices with Declining Collections Will NOT Achieve High Values in an IDSO Partnership. The reality is that a practice with declining collections may not be IDSO partnership material at all. As in NO bidders!

We are already seeing this trend. National average Ortho case starts have dropped each year in ‘22, ‘23, and ‘24. We cannot give away a shrinking ortho practice! Growing ortho practices get great values because they are rare.

Today, your growing practice might be worth 7x to 10x EBITDA. The minute production or collections start shrinking, the IDSOs will pass on your practice until you return to growth over at least a six-month period. Then they might reconsider you. Maybe.

Every practice that is waiting to complete an IDSO partnership, for whatever reason, is risking not only lower values, but possibly no qualified bidders at all. You could be stuck in a low value, doctor to doctor transaction (80% of collections instead of 200% of collections) as your only option for years to come.

Fortunately, if you have a growing practice, today, we can help you achieve what could be a record value. If your collections decline, all bets are off. Risk vs. Reward. Buy Gold!

P.S. There have already been five new IDSOs launched YTD in 2025 with fresh, eager capital!

Chip Fichtner
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