Picture the day you hand over the keys. The day you walk out of your operatory for the last time as the owner. Now count backward. If that day is five years out, the decisions that shape your exit are the ones you are making right now.
When a dentist tells me they are about five years out, they usually mean they will start thinking about a transition in four years and sell in five. That math does not work that way. By the time you decide to go to market, the two or three years of financials sitting behind you are already shaping the offers you will receive. You still have five years of runway, and that matters, because a buyer needs continuity of care and does not have a replacement ready to step in for you.
Your Own Timeline Matters As Much As The Practice’s
Let’s talk about your goals first. When do you actually want to step back from the chair?
If your plan is to start dialing down your own production and working toward more work life balance, that has to be timed carefully. You need to be prepared to keep practicing while you are in market, and for a few years after. DSO deals come with a three-to-five-year employment agreement after close. More than ever, buyers roll the numbers forward through the diligence process once you have signed a letter of intent (LOI) to confirm your trends are holding.
Too many times, dentists have taken their foot off the pedal while actively speaking to buyers, only to face a lower valuation because the buyer loses confidence in a practice with weakening performance.
What Planning The Sale Of Your Dental Practice Involves
A clean transition is a body of work that takes time.
Buyers will be valuing your life’s work based on a trailing twelve months of practice performance. They will be looking at your revenue, earnings before interest, taxes, depreciation, and amortization (EBITDA), service mix, payer mix, patient counts, geography, team, and much more.
When you work with an advisor such as TUSK, we piece together all the marketing materials before you go to market. This also helps us identify any areas where we may face scrutiny in the diligence phase.
That work includes clean financials with documented add-backs for a defensible and normalized EBITDA, production by provider reports, hygiene numbers, and the other measures mentioned above that tell a consistent story over time. This process typically takes anywhere from four to six weeks to prepare. Then comes taking your practice to market, which gives you the opportunity to meet each of the buyers and make sure there is cultural and financial alignment. Once you have selected a buyer, you enter the diligence phase, where a quality of earnings team will verify your advisor’s numbers. Most DSO transactions run six to nine months from pre-market preparation to close, and these are months that do not count toward your post-close employment agreement.
Learn More About The TUSK Proven Process Here ->
Where You Actually Stand
So, work backward from the date you want to be out.
If you want to be fully done in five years, you likely need to go to market now. The deal process, plus a typical transition period, can consume the back half of that window before you have done anything else.
If you want out in six or more years, now is the time to prepare. Understand what your practice is worth, stabilize your team, and fix the structural issues while you still have the runway to do it calmly.
The doctors who leave money on the table are almost always the reactive ones. A health event, burnout, a competitive landscape where nearby practices pull away patients, or a difficult operating environment where margins compress can all force a dentist to sell. They were not prepared, and instead of selling at a peak, they are settling.
Get Honest With Yourself
If you take nothing else from this, sit with a few questions.
- When do I actually want to retire from dentistry?
- What do I truly need out of a sale, both financially and operationally?
- Can I maintain or even grow this practice on my own from here, or do I need to bring on a team to keep the trends moving in the right direction?
You do not have to be ready to sell your dental practice to start getting ready. A dental practice valuation and an honest conversation about your timeline is the cheapest, lowest pressure step you can take, and it tells you exactly where you stand today. Our team at TUSK Practice Sales is here to have those conversations whenever you are curious, with no pressure. You are in control. You make the choices.
