It is not uncommon, in the conversations I have with dentists, for an owner to describe the practice as their retirement plan. It is the best asset most doctors will ever own, and they built it into the practice or group it is today through years of hard work and dedication.
But like any living, breathing business, that asset carries a risk profile. How you plan to monetize it matters, and so do the things that can get in the way between now and then.
The Items Impacting Your Practice’s Risk Profile
If you are the only producer, or one of two, the practice’s cash flow is a function of your hands, your health, and your calendar. An asset that performs only while one person performs is a concentrated position.
Margin is the other pressure. Over the last five years, practice revenues rose 1.4% while expenses rose 4.9%. Inflation-adjusted income for general practitioners was flat in 2025 and has been drifting down for fifteen years. This is what doctors describe to me as working harder to stay level. How will you work to continue growing your business? What will it take to keep the business producing the same profits year over year at a minimum? All questions you should be asking yourself as you run your practice today and plan for the future.
Dentistry Has Proven Recession-Resistant . What Happens When Patients’ Pockets Are Pinched?
Dentistry has a reputation for durability. Practices stayed open through 2008 and 2020, and revenue came back after periods of economic turmoil and pandemic conditions. But it is worth asking what kind of stress dentistry absorbs. It holds up in a recession, because dental need does not disappear when the economy slows. It holds up far less well against household cost pressure.
A study in the Journal of the American Dental Association found that general dentist visits declined slowly and steadily through the Great Recession, bottomed out in 2010, and never fully recovered. Orthodontics, the most discretionary line in the profession, hit an all-time low that same year. Even 2020 looks mild only because of relief. National dental spending fell 1.8%, but that figure includes $8.7 billion in pandemic aid. Without it, the decline would have been 7.8%.
What I think about is not a recession. It is a long inflationary stretch where patients are weighing a mortgage payment, groceries, and a crown. We know what gets deferred there, and it is not the mortgage. It is also not the hygiene recall. It is the restorative and elective production that carries your margin. Collections can hold steady for a while as the mix quietly gets worse.
The Questions to Answer Before You Transition
So, if you’re looking to de-risk or make steps towards retirement, you need to understand what those steps could look like. Does it make sense to bring on an associate and give them a partnership interest? Do I start preparing my business to sell to a DSO and what type of partner am I looking for? When will I be ready, emotionally and financially, to walk away from the practice? If you are the business, what will it take to replace you?
From there, diversify inside the practice before you diversify outside it. And decide how much cash you need at close to be structurally safe before you evaluate any structure.
You Don’t Have To Sell 100% Of Your Dental Practice
In recent years, owners have had a real option to de-risk without stepping away, through a partial sale to a DSO. If you want to keep practicing for five or more years, stay an owner, and take meaningful chips off the table now, a structure returning roughly 60% to 75% in cash at close with the balance in joint venture equity at the practice level may well be the right deal for you.
I want to be honest about what that does and does not solve. The de-risking happened in the cash that cleared. What you kept is still tied to the practice you already own.
Here is how that piece works. Your retained equity sits in the practice, and its value moves with the practice’s earnings from here. Most structures pay you a share of the profits along the way, but the event that matters is the recapitalization, when your partner’s investor group sells the platform to the next one. That is when your stake gets valued again, usually against the practice’s earnings at that point, and it is when you can turn it into cash.
Two things decide what it ends up being worth. How the practice performs between now and then, which you still influence. And when the recap comes and what the market pays for it, which you do not.
Your practice is a great asset. You built it, and you should be proud of it. Knowing what you are holding and planning how and when you will let go are pieces of the puzzle that will give you peace of mind and a pathway to an exit.
Frequently Asked Questions
When should a dentist start planning a transition?
Dentists should start planning to exit their practice at least 5 years from the date they would like to stop practicing. Most DSOs, DPOs, OSOs, and private equity groups require dentists to sign 3-5 year employment agreements in order to ensure continuity of care in the practice, as well as achieve a smooth transition. At TUSK Practice Sales, we educate dental practice owners on the different deal structures and terms, inclusive of post-sale employment agreements, when dentists transition.
What is joint venture equity, and how is it different from hold co equity in a dental practice sale?
Joint venture equity is a stake in your own practice, so its value moves with your practice’s earnings, and you generally receive a share of the profits along the way. Hold co equity is a stake in the parent company that owns the entire platform, so its value moves with every practice in the group rather than just yours. Some deals blend the two.
The practical difference is influence. With JV equity, how your practice performs still affects what your stake is worth. With hold co equity, you are a minority holder in a larger business whose performance and sale timing sit outside your control. Both typically become liquid at a recapitalization.
What is a recapitalization, and when does it happen?
A recapitalization is when the investor group backing the DSO sells the platform to a new investor, often a larger private equity firm. It is the event that gives dentists’ retained equity a value and a chance to convert to cash.
