Selling a dental practice is a lot like sitting down at a Texas Hold’ Em table in a room full of professionals. The DSOs and dental buyers across from you play this game every day. This article breaks down how a seasoned dental broker can strategize to protect your dental practice valuation, sequence information, and negotiate the terms of your dental practice sale for the best possible outcome.

Be The Player, not a Participant: Texas Hold’ Em Lessons for When Selling Your Dental Practice

Selling your dental practice is a negotiation process that oftentimes draws parallels to a game of Texas Hold’ Em. At the root of it, you’re orchestrating a delicate balance of strategy, communication, and timing. So are the DSOs looking to purchase your dental practice.

At the end of the day, this is often the largest transaction in a practice owner’s life. It’s not easy to run a full clinical schedule while also trying to interpret letters of intent, quality of earnings requests, and deal structures from DSOs and private equity-backed buyers. Playing with the stakes this high can create a lot of emotions through which it can be very difficult to make decisions objectively based on the facts.

On the other side of the table sits a DSO representative who spends every day purchasing practices at the lowest price possible to bring a larger return to their firm. They know which questions to ask, which numbers to challenge, and which pressure points to push to get a better price or softer terms.

Too often, we learn about unrepresented practice owners who revealed too much too soon (in good faith) and get punitively impacted at the closing table by the buyer.

In this game, our role as your advisor is to sit next to you at the table. We’ll guide you on when to go to market, how to position your practice & access a table with bigger players, and when & how to place your bets (negotiations & diligence) to yield the best result.

Knowing Your Hand: The First Step In Any Dental Practice Sale

Before anyone places a bet, you need to know what cards you are holding. We begin the process with a valuation, looking back at the last 36 months of practice performance to build a valuation around the last 12 months of financials.

Let’s say your practice is growing fast. You added an associate, expanded hours, or launched high-margin services, and you’re already seeing it in collections. But your formal financials haven’t caught up yet.

A buyer would love to price your practice based on last year’s lower earnings and treat your current momentum as a mechanism to lower the effective purchase price.

This is a situation where TUSK will:

• Hold back from rushing into the market with stale numbers just to “get something going”.
• Work with your team and your CPA to reconcile the new growth into clean, defensible financials.
• Once the results are baked, we roll forward the numbers and go to market with a stronger story and a higher earnings base.

Same practice. Same chairs. Same provider team. Totally different valuation conversation. Simply because there was a strategic intention around when & how we placed our initial bet to maximize our outcome and come out of the gates strong.

Timing Is Everything In Dental Practice Sales

On the flip side, sometimes we want to slow-play your hand to maximize impact.

If you place too strong of an initial bet, everyone else folds, and the pot stays small. The same thing can happen in a transaction when you show all your strengths and all your numbers too soon – if you convince a prospective party that they can’t run the business as well as you, then they feel like they can’t add any value (and ease the burden of a high purchase price). Buyers need an incentive to keep stretching; otherwise, they will focus on a different opportunity that has a higher ROI for them.

A better approach is to let the game play out while the DSOs continue to put more into the pot. During that time, you are evaluating the conversations taking place while we are negotiating on your behalf to see how much more each buyer is willing to participate and let the river continue to approach. Together, we are positioning your practice to line up with what the best buyers are seeking.

You are sequencing information so your strong cards land when they carry the most weight (bigger pot).

What you want to avoid is being so eager that you overshare in early conversations, hand buyers your best talking points (tip them your hand), and make it easy for them to anchor the valuation or tighten terms before you have created real competition.

What To Keep Close to Your Chest While We Fix It

No practice is without its imperfections. DSOs know that. The issue is not whether they exist, but whether they are unmanaged red flags or understood and actively addressed.

We’re no strangers to a situation where the dentist we’re representing experiences turnover at the front desk, or a tenured hygienist putting in their two weeks, or dentists who are actively seeking an associate. Those staffing challenges are real, and they matter.

Maybe your accounts receivable is bloated. Maybe your fee schedule is outdated. Maybe your membership plans were built in pieces over time and need standardization.

If you lead with raw, unsolved problems such as “Our front office has been a mess for months,” or “we haven’t updated our AR in 6 months,” you give buyers an easy reason to discount your valuation, adjust working capital, and potentially load the deal with restrictive covenants.

TUSK not only knows how to identify these red flags in advance of going to market, we know how to best mitigate the corresponding bite that can come from them down the road. The key is to look around corners before we go to market and get remedies in place in advance of conversations with prospective parties, such as:

1. Help you stabilize the immediate situation as much as possible.
2. Curate a plan going forward that best aligns with a transaction & partner
3. Re-frame the issue for buyers as an opportunity later in the process in a way that shows you identified an area for improvement and are already beginning to reap the rewards.

When handling these situations during a closing process, we have proactive conversations with the buyer to ensure the deal terms are preserved and that there is a good operator in place today. This is an opportunity for the buyer to show what type of partner they’re going to be alongside your practice in the future.

It Is Not Gambling When You Know the Game

While it’s fun to draw parallels to poker with regards to the process of a transaction, of course, an informed marketed process for selling your practice is not gambling. With TUSK as your advisor, we can educate you about many aspects of your practice and provide you with an informed perspective of how the market will receive your business.

Selling a dental practice to a DSO or group buyer should not feel like placing bets and hoping the river card goes your way.

With TUSK sitting beside you, the process becomes:

• A clear understanding of your starting hand through a defensible dental practice valuation
• A deliberate plan for which cards to strengthen before going to market (when to participate in the game)
• A sequence on what to reveal, when to reveal it, and to whom (betting strategy)
• A resulting pot that correlates with an informed marketed approach and maximizes the reward for your business

You cannot control the cards the market deals you, but you can control how you play with respect to them.

In poker, you win because you understand the table. You know when to show strength, when to hold back, and when to push your chips into the middle.

Selling a dental practice shares in these dynamics.

At TUSK, we know the buyers and their strategies just as well as we know our clients’ practices inside and out. We sit next to you at the table, help you read the room, understand who’s at the table, and sequence each move so that your outcome is driven by strategy, not luck.