Most dentists sell a practice once. The buyer across the table has done it 200 times. That asymmetry, not the multiple, not the market, not the timing, is where value leaks out of a deal. It’s why offers get repriced between the letter of intent and closing, why add-backs get rejected in diligence, and why sellers accept terms they didn’t have to.
I spent over four years on the buyer’s side of these deals, where I built and ran the M&A team at one of the country’s largest DSOs. This guide is the process as the buyer sees it, because once you understand how the other side of the table works, most of the expensive surprises stop being surprises.
It covers the whole arc: when to start, what your practice is actually worth, who the buyers are, how the process runs month by month, how deals are structured, and where sellers lose money they didn’t have to lose.
Step 1: Start the Clock Before You Feel Ready
The best exits start one to three years before the owner plans to sell. Not because the process takes that long (it doesn’t), but because almost everything that increases what a buyer will pay takes time to show up in your financials.
Buyers pay for the practice your trailing twelve months of numbers describe. If you decide to sell in March and call a broker in April, the practice being priced is the one you ran over the past year, including the months you coasted, the associate who left, the fees you never renegotiated. None of that is fixable in the sixty days before going to market.
Starting early means you can make changes while they still matter: cleaning up the P&L so a buyer can read it, addressing the operational issues a diligence team will find anyway, and making the growth investments that a buyer will pay for rather than the ones they’ll ignore. It also means you’re never negotiating under pressure. Buyers can tell the difference between an owner who chose to sell and one who has to.
If you’re eighteen months out, you’re not early. You’re on time. The order of operations one to three years out is in our pre-sale playbook.
Step 2: Find Out What Your Practice Is Worth, the Way a Buyer Prices It
Here is the single most important mental shift for a seller: buyers don’t price your collections. They price your earnings.
The rules of thumb you’ve heard, a percentage of collections or the multiple a classmate got, describe a market that no longer exists for most practices. Sophisticated buyers, and nearly all DSOs, value practices on EBITDA: earnings before interest, taxes, depreciation, and amortization. In plain terms, the cash the practice generates after paying everyone, including a market-rate dentist to do the clinical work you do.
That last clause matters more than any other sentence in this section. If you collect $1.5M and take home $500K, your EBITDA is not $500K, because the buyer has to pay a dentist to produce the dentistry you produce. What’s left after a market-rate replacement wage is the number that gets multiplied.
Two consequences follow:
The buyer decides which add-backs it credits, and groups credit them differently; your job is to document them. Your P&L includes expenses a new owner won’t carry: personal vehicles, family members on payroll, one-time equipment purchases, above-market rent you pay to your own building entity. Adding these back increases EBITDA, and every dollar of legitimate add-back is worth a multiple of itself at closing. But buyers don’t accept add-backs on your say-so; their diligence teams exist partly to reject the ones that don’t survive scrutiny. Documented, defensible add-backs get paid. Optimistic ones get crossed out, and a list full of optimistic ones makes the buyer distrust the legitimate ones too.
The number that matters is the one that survives diligence. A letter of intent carries a price that has not been verified yet. What you’ll actually be paid is determined by what their quality-of-earnings review confirms months later. This is why the deals that close at their original price are almost always the ones where the seller’s numbers were prepared to buyer standards before going to market, not cleaned up in a panic during diligence.
This is also why we don’t quote multiples in articles. A multiple without a defensible EBITDA underneath it is a marketing number, not a valuation. How a group turns your profit and loss statement into its number is in how DSOs value dental practices.
Step 3: Know Your Buyers: DSOs, Private Equity Groups and Private Dentists
Practices today sell into a more varied buyer pool than a generation ago, and the right buyer depends on what you want, not just the headline price.
DSOs and group platforms. In the dental mergers and acquisitions market, dental support organizations, most backed by private equity, are the most active acquirers of practices with strong earnings, especially multi-location groups and practices collecting above roughly a million dollars. They bring structured processes, professional diligence teams, and deal structures that usually include equity alongside cash. Selling to a DSO is neither the horror story nor the windfall it’s often portrayed as; it’s a specific kind of transaction with specific trade-offs, and the terms vary enormously between organizations. The difference between a good DSO deal and a bad one is in the documents, not the pitch.
Private buyers. An individual dentist buying your practice, typically bank-financed. Often the cleanest transaction for smaller practices: more likely to be all cash at close, no equity to evaluate, no integration into a larger organization. The constraint is financing: an individual’s bank loan caps out well below what earnings-based buyers will pay for a strong practice.
Associates. Selling to the associate already in your practice can be the smoothest transition for patients and staff, and the hardest deal to price honestly, because neither side wants the negotiation to damage the relationship. Associate deals benefit most from outside representation, precisely because the parties know each other too well.
Which buyer is right depends on your practice’s size, your timeline, and what you want your working life to look like afterward. A competitive process, where multiple qualified buyers know they’re competing, is how you find out what each will really pay, rather than what the first one offers.
Step 4: Run the Process, Month by Month
| Stage | When |
|---|---|
| Preparation: the valuation, the reports, the data room, the buyer list | Months 1 to 2 |
| Going to market: NDAs first, the practice presented, buyer calls and visits | Months 2 to 4 |
| Offers and the letter of intent: offers compared on cash, equity and terms | Months 3 to 4 |
| Letter of intent to closing: the quality of earnings review, legal, the staff announcement | About 90 days |
Engagement to closing runs six to twelve months, and a well-run process often beats that range. How long it takes to sell a dental practice depends less on the market than on how quickly you produce what buyers ask for at each stage. Here’s the shape:
Preparation (months 1 to 2). Financials are organized and normalized, the add-back list is built and documented, and the practice’s story is assembled into the materials buyers will evaluate: at minimum a confidential summary; for larger practices, a full databook. This stage determines how the rest of the process goes. Buyers price confidence; disorganized materials read as risk and get priced accordingly.
Going to market (months 2 to 4). Qualified buyers are approached confidentially. Confidentiality is a process, not a hope. Buyers sign NDAs before learning identifying details. Your staff, patients, and competitors should not know your practice is for sale, and a properly run process keeps it that way until you choose otherwise.
Offers and the letter of intent (months 3 to 4). Interested buyers submit offers; the strongest are negotiated against each other; you select one and sign a letter of intent. Understand what an LOI is: mostly non-binding on price and terms, but binding on exclusivity: once signed, you typically stop talking to other buyers. That makes the moment before signing your point of maximum leverage. Terms you don’t negotiate into the LOI rarely improve afterward.
Letter of intent to closing (about 90 days). The quality of earnings review and the legal work both start as soon as the letter of intent is signed. The buyer’s team verifies everything: financials, payer mix, compliance, staff agreements, the lease. This is where prepared sellers coast and unprepared sellers suffer. It is also where repricing happens. When diligence finds gaps between what was represented and what’s real, the buyer returns with a lower number, and by then your alternatives have moved on. The defense is everything in this guide’s first two sections: start early, prepare to buyer standards.
The same 90 days produce the documents: purchase agreements, assignment of the lease, employment or transition agreements for you, and the closing statement that turns the headline price into actual proceeds. The unglamorous lines settle real money at the very end: what is included in the purchased assets, what is excluded (typically cash and usually the receivables earned before closing), who collects those receivables after closing and on what terms, and the proration of expenses. Read them, or retain people who do.
After closing. Most deals include a transition period; DSO deals usually include a multi-year clinical commitment. What your day looks like on the other side is set in the buyer’s employment agreement, so compare it across offers rather than discovering it after you sign.
Step 5: Understand How the Offer Is Structured
The headline number is not what you receive at closing. Almost every substantial deal splits consideration into parts, and the split matters as much as the total.
Cash at close is exactly that: the portion wired on closing day. Holdbacks are amounts retained by the buyer for a period after closing, released when conditions are met. Earnouts tie part of the price to the practice’s future performance: you get paid if targets are hit, and the fine print defines whether those targets are realistic. HoldCo equity, which many group offers include (others offer JV equity, a retained minority stake in the practice itself), converts part of your price into ownership in the buyer’s organization, the “second bite of the apple” you’ll hear pitched, referring to the potential payout when that organization itself is later sold.
None of these structures is inherently good or bad. HoldCo equity in a well-run organization that later sells can genuinely outperform the cash it replaced; equity in the wrong organization can be worth nothing, with conditions attached that nobody read closely. An earnout with achievable targets is deferred payment; one with aggressive targets is a discount wearing a disguise.
The evaluation is the same in every case: understand exactly what conditions attach to every non-cash dollar, and price the deal on the cash and the terms, not the press-release total. What to ask before you sign a letter of intent is here.
Step 6: Get Representation Before You Answer an Offer
Three professionals earn their fees in a practice sale: a dental-specific CPA (tax structure decisions such as the allocation of the purchase price often move more money than any negotiation), a healthcare transaction attorney (the purchase agreement is where the pitch becomes enforceable terms), and an M&A advisor or broker whose job is running the competitive process and negotiating from experience against buyers who do this constantly.
On representation: the owner who most needs it is the one who thinks he does not, because a group has already made an offer. That offer is one group’s view of the practice, built on that group’s credits and adjustments, before any other group has seen it. The offer is the reason to get representation, not the reason to skip it. In my experience an unsolicited offer can be improved on, for two reasons: other groups competing for the practice, and an experienced advocate in your corner on price and on terms. That is the process Ascend Strategic Partners runs for sellers: NDAs before any buyer learns your name, the practice in front of more than one group at once, offers compared side by side on cash, equity and terms, and the deal carried through the 90 days after the letter of intent. Our brokerage services page says what we do and what you do, week by week.
The mistakes we see repeatedly, compressed: waiting until burnout to start, so the financials show a declining practice; negotiating the multiple while ignoring the structure; taking the first offer to avoid a process; treating the LOI as a formality; leaving add-backs undocumented; letting confidentiality slip to staff mid-process; and skipping specialist advisors to save fees on the largest transaction of their lives.
Every one of them is avoidable with time. Which is the real argument for starting early: not urgency, but options.
What to Do Next
If selling is somewhere on your horizon, even years out, the sequence is simple: find out what your practice is worth now, understand what’s driving that number, and make the improvements while there’s still time for them to pay.
That first step is exactly what we do. Ascend Strategic Partners offers a free, confidential practice valuation, reviewed personally by our founder, built the way a buyer would build it, with no obligation. If an unsolicited offer is already on your desk, send it to us before you answer it; that is the moment representation is worth the most. Call 813-528-3319 or request the valuation.
Selling a Dental Practice: The Questions Owners Ask
How long does it take to sell a dental practice?
Six to twelve months from engagement to closing, and a well-run process often beats that range: one to two months of preparation, two to three months on the market, then about 90 days from the signed letter of intent to closing. The month-by-month timeline is here.
How much is my dental practice worth?
What a buyer will pay for your earnings rebuilt its way: your trailing twelve months with owner pay set to a market rate, rent set to market, and personal and one-time costs added back, priced by that group’s model and balance sheet. Two groups price the same practice differently in the same month, which is why one offer never tells you what’s market. Our free, confidential valuation is where to start.
Should I sell my dental practice to a DSO or to a private buyer?
It depends on what you want after closing as much as on price. A group typically pays for earnings, asks the selling doctor to stay three to five years under its employment agreement, and often includes equity in the offer; a private dentist buys the practice to run it himself. The right answer comes from seeing more than one offer side by side, which is what a competitive process produces.
What is the best way to sell a dental practice?
Prepared, represented, and in front of more than one buyer at once. The numbers are rebuilt the way a buyer’s team will rebuild them before any group sees them, buyers sign NDAs before they learn the name, and the offers are compared on cash, equity and terms rather than on the headline. That is the process Ascend runs.
Can I sell my dental practice quickly?
Faster than six months is possible when the owner produces the financial reports quickly, the numbers survive the quality of earnings review, and the associates sign their new employment agreements without delay. Those three variables govern the clock more than the market does.