Gary KadiHelping Dentists Build Profitable Practices That Deliver Time Freedom, Clarity, and Sustainable Growth

Wait… What’s an Add Back In Your Dental Practice? 🤔

Name: Wait… What’s an Add Back In Your Dental Practice? 🤔
Uploaded: 2025-07-31T19:32:21+00:00
Duration: 45 s
Channel: Gary Kadi
Description: Gary Kadi explains why dental practices often misreport profitability. When you pay yourself through draws or low W-2 wages instead of market-rate…

31 Jul 2025 · 1 min

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0:45

Gary Kadi explains why dental practices often misreport profitability. When you pay yourself through draws or low W-2 wages instead of market-rate salary, your EBITDA looks inflated. A buyer will pay the producing doctor as a real employee, so that gap becomes a negative add-back that tanks your valuation.

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And then the other thing to really take into consideration which I think is the biggest unknown or confusing thing that happens when we're looking at ebitda, it's like well my CPA told me my EBITDA is X. It's like well a lot of times what happens is we're not taking into consideration actually paying the doctor for the production that they're doing. A lot of times that's happening in a draw or maybe you're not even paying yourself a W2 or it's a lower amount than 30%. And so it's really important to understand again don't change what you're doing and that can be a negative add back if you're not actually paying yourself appropriately because guess what, when you do go to sell your practice and you are producing as an employee at that point in time the buyer will be paying you. You won't be getting paid last anymore. They will be paying you. And so that does impact profitability and EBITDA.