DSOs are buying dental practices for profit, since an owner working four days can earn what an associate needs five days to make. Staying an owner instead of selling to a DSO could mean retiring 10 to 15 years earlier.
Due diligence is the buyer's full review of a practice's assets, liabilities, and earning potential before purchase. Buyers typically review three years of profit and loss statements, a current balance sheet, production by provider, a 12-month procedure code report, an accounts receivable aging report, and the office lease terms.
Usually, yes. Buyers should keep pay, benefits, and every team member for at least the first few months, which builds staff loyalty and protects patient retention.
A DSO may offer a higher price but often holds back part of it based on your transition commitment and future performance, while individual buyers usually pay in full at closing. DSOs also tend to want you to stay for years and often prefer a long-term lease over buying your real estate.
ADS Dental Transitions is a network of independently owned brokerage firms led by dentists, CPAs, attorneys, and MBAs who follow shared ethical guidelines. Listing with an ADS broker adds national exposure through shared marketing, lender relationships, email campaigns, and webinars.
Plan your Social Security claiming strategy and shift your portfolio from growth to income, such as dividend-paying stocks and interest-bearing investments. Meet regularly with your CPA and financial advisor, since the sale affects both your portfolio and your taxes.
Most patients stay, and a sale usually adds little beyond normal yearly attrition. When the seller recommends the buyer and the buyer keeps fees and staff steady, practices generally retain upwards of 90% of patients.
Start three to five years before you sell, since banks and buyers review at least your last three years of tax returns. Use that time to work with your accountant on removing discretionary expenses, which usually means a faster sale and a higher price.
The answer may depend on your preferences and the specific broker you work with. John Knipf, president of California Practice Sales, explains why he recommends involving staff in meeting and choosing the buyer, and how doing so can help staff feel valued and build trust.
