The most common conversation I have with practice owners goes like this. “I know I want to sell. Maybe in a year, maybe in three. I just don’t know where to start.” Then, almost always: “I’ve gotten a few letters.” And that is where most owners actually start, whether they mean to or not. A DSO’s development person calls, a broker sends a mailer, a colleague sells and mentions a number, and the process begins on someone else’s terms.
I spent a little over four years running the M&A team at one of the country’s largest dental groups, through more than 50 transactions, and I watched hundreds of practices come through that pipeline. The ones that got the strongest offers had done one thing differently. They started with the number, not the buyer, and they started early enough for the number to move. What follows is the order of operations, why the order is what it is, and how much of it changes depending on whether your exit is one year out or three.
The Fact That Sets the Whole Timeline
Buyers price the trailing twelve months. Whatever your practice earned over the most recent twelve closed months is, with adjustments, the number an offer gets built on, and a buyer will confirm it again right before closing. That has a consequence most owners don’t work through: a change you make today doesn’t fully show up in your price for a year, because it takes twelve months to fill the window buyers are looking at.
So if you’re thinking two years out, the last twelve months before you go to market are the ones being sold, and the twelve months before that are when you fix them. That is the real reason a serious preparation plan starts around 24 months out. Not because the process is slow (it usually runs six to twelve months), but because the number you sell on takes a year to build.
One definition before the plan. In this article, exit means the date you sell, not the date you stop practicing. In a DSO sale those are rarely the same day. In my experience, most DSO buyers expect the selling doctor to stay on under an employment agreement after closing, commonly four to five years, with exceptions when an associate or a successor already carries most of the production. So an owner who wants to hand over the keys and walk away in two years is usually looking at a different buyer, a different structure, or a longer timeline, and that is worth knowing before step one, because it changes the number. The playbook below is written for the owner who plans to sell to a group and stay through the transition.
The Five Steps, in Order
- Get the number and the gap. Before anything else, find out what the practice is worth today the way a buyer would compute it: not collections, not the number on your tax return, but normalized earnings after your compensation is reset to what a buyer would pay a replacement dentist, rent is set to market, and every claimed add-back has been tested. Then put your goal next to it, the number you’d need to walk away happily. The gap between those two figures tells you which of the next four steps matter for you and which are wasted effort. Owners who skip this step end up fixing things buyers don’t pay for. Our free valuation exists for exactly this step.
- Fix the story your books tell. A buyer’s quality of earnings team is going to rebuild your financials from the ledger up. Your job in the year before a sale is to make that rebuild boring: months closed on time, personal spending out of the business accounts, every add-back you intend to claim with documentation behind it, revenue and collections that tie to your practice management software. Messy books rarely kill a deal outright. They shrink it, because every number the buyer can’t verify gets treated conservatively, and conservative treatment always runs against the seller. I wrote about why DSOs reject add-backs because it is the most common place value quietly disappears.
- Move the earnings off your own hands. This is the slowest lever and the most valuable one, which is why it has to start earliest. The question underneath every item on a buyer’s checklist is whether the earnings survive the owner leaving. If you produce most of the revenue, hold the referral relationships personally, and are the reason the schedule stays full, the buyer sees a practice that might shrink the day you walk out, and prices it that way. An associate who stays, a hygiene program that produces on its own, and systems that run when you take a month off all make the earnings transferable. The full logic is in what DSOs look for when buying a dental practice.
- Take the friction out of the deal. Some things don’t change the price much but decide whether the deal closes on time, or at all: a lease that can be assigned and has enough term left (buyers and their lenders care about this more than owners expect), staff and associate agreements that are actually signed, insurance credentialing that can transfer, receivables that are current, a facility with no surprises. None of this is glamorous. All of it adds days in diligence if it isn’t handled, and days in diligence are where deals die.
- Decide the timing and the process before someone decides it for you. The cheapest practice a buyer acquires is the one that never went to market. When you know your number, your gap, and your calendar, an unsolicited letter becomes information instead of pressure, and you can run a real process on your timeline with more than one buyer at the table. The month-by-month version is in the timeline for selling a dental practice.
What Changes by Horizon
The five steps don’t change. How much of each you can do does, and the honest version depends on where you are.
Inside 12 months. You are not fixing the practice anymore; the trailing twelve months are mostly written. The work is steps one, two, and four: know the number, make the books verifiable, clear the friction, and go to market with a story that presents what you have accurately and well. The biggest mistake at this horizon is starting a project that won’t show up in the numbers before a buyer looks, and delaying the sale to wait for it.
Twelve to 24 months. This is the window where two or three levers pay and most don’t. The levers that can show up in time are usually on the earnings side: capacity you add (a hygiene day, an associate day) that produces within a couple of quarters, an expense line that is clearly out of pattern, a lease you renegotiate now rather than under a buyer’s deadline. Everything else on the list is either too slow to matter or not worth the distraction.
Twenty-four to 36 months. The full playbook is available to you, including the slow lever in step three. This is where owner dependence actually gets reduced rather than explained away, and where a practice can change its category in a buyer’s eyes. If you’re here, you have the one thing money can’t buy later, which is time for the changes to fill the window.
If you’re earlier still, our complete guide to selling your dental practice is the right place to begin.
An Illustrative Example
To make it concrete, take a composite of the owner I hear from most weeks (the numbers are illustrative, not a client’s). A solo general dentist, five operatories, collecting around $1.6 million, who wants to be done in about two years. He produces roughly three quarters of the revenue himself. His books are clean but his months close late, and a handful of family expenses run through the practice. The lease has three years left with no renewal option. His number today, computed the way a buyer would, is lower than he expects, mostly because the earnings depend on him and the buyer’s math assumes some of them leave with him.
The gap tells him what to do. Step two is a month of work with his CPA. Step four is one conversation with his landlord about a renewal option, done now while he has leverage. Step three is the one that moves the number: an associate two days a week starting this year, so that by the time the trailing twelve months are being priced, a meaningful share of production belongs to someone who is staying. Nothing on that list is exotic. The order and the timing are what most owners get wrong, and they only get wrong once, because there is no second sale.
What You Can Do Yourself, and Where an Advisor Earns It
Plenty of this you can run on your own. Closing your months on time, getting personal expenses out of the business, sitting down with your attorney about the lease, hiring the associate: those are yours, and no advisor should charge you for them.
The parts that are hard to do alone are the parts that require the buyer’s seat. Building the valuation the way an acquirer’s team would, so the number you plan around is the number that shows up in an offer. Comparing your practice against the benchmarks buyers actually use, to see which margins are out of line and which are fine. Deciding which of the levers moves your number the most for the least disruption, so two years of effort goes to the right places. And, when the letters arrive, reading them the way the group that sent them reads them.
That is what pre-sale advisory is at Ascend: a full valuation of the practice today, an analysis against industry benchmarks, a written playbook built around your goal and your horizon, and the network of CPAs, attorneys, and specialists to execute it, done for you a year or two before a buyer does it to you. It is the same work a DSO’s team performs on every practice it acquires, run from your side of the table first. You can read more on our For Dentists page.
Start Where the Buyer Starts
Whether your exit is next year or three years out, the first move is the same: find out what the practice is worth right now, computed the way the people who will bid on it compute it. That is what our free practice valuation is built to do, confidentially and with no obligation. From there you’ll know your gap, your levers, and your calendar, and the letters can wait for you instead of the other way around. If you’d rather have the rest of the playbook run with you, that is a thirty-minute conversation about your goals, and it starts with the same number.