4 Considerations for Dentists Before Selling to a DSO

October 6, 2021

At a glance

  • Prioritize your passion: Business management and operational tasks can pull dentists’ focus away from patient and clinical care.
  • Find the right partner: Outsourcing those tasks to a DSO can be a big help, but there are many factors dentists must consider before signing the dotted line.
  • Know where to turn: Aprio specializes in helping dentists achieve the sale outcomes and results that align with their values and goals.

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The full story:

There is so much more to owning a dental practice than caring for patients. Critical business management and operational tasks comprise a large portion of what you do every day — and sometimes, they can be the most time-consuming aspects of your job.

That’s why many dentists partner with or sell their business to dental support organizations (DSOs), which can take nonclinical tasks off dentists’ plates and allow them to focus on what they do best.

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If you think that selling your practice to a DSO is the right move for you, there are four factors you need to consider.

1. Weigh the pros and cons

It’s important to think about what matters most to you in your dental practice before you consider selling to a DSO. There are both pros and cons to making the decision — for instance, selling to a DSO would give you more free time and a better work-life balance, since you’ll be delegating time-consuming, non-care-related tasks to a third party. In addition, a DSO can help you navigate compliance rules and regulations and provide you with valuable technology that you otherwise may not be able to access.

On the other hand, selling your practice to a DSO means that you will no longer be the sole “boss” of your business; you, your patients and your staff will have to adhere to different sets of policies and rules set by a third party. If you opened your practice for the sole purpose of being your own boss, then the DSO route may not be for you.

2. Think about your role

While weighing pros and cons, it’s also essential to determine if a DSO sales engagement aligns with your needs as an owner, and the role you wish to play in your practice going forward.

Many DSOs will require dentists to remain with the practice for a set time period to help ensure a smooth transition in ownership. Does this coincide with your goals for your post-sale career (for instance, do you want to work fewer hours, or do you still want to devote a large amount of your time to practicing dentistry)?

It’s also critical to consider what the DSO sales price and your new salary mean to your long-term retirement and income goals. If you choose to keep working post-sale, make sure to also examine any non-complete clauses that may come with the DSO sale terms — and if there is one in place, whether it prevents you from practicing altogether.

3. Do your due diligence

Does the DSO you’re considering have a positive reputation in the dental community and industry? Does the DSO have a reliable capital stream and a culture that reflects your practice’s culture? If you decide to sell to a DSO, it’s critical to vet prospective buyers thoroughly to ensure you’re entrusting your operations to an organization whose values align with your own.

4. Plan for life after your practice

At some point, you will end your dentistry career to pursue personal passions or perhaps spend more time with family. The DSO that you sell to should have the resources and support you need to ensure your successful retirement when the time comes.

You should partner with a DSO that helps train successors or assists you in finding a replacement to lead the practice once you’re gone. You have spent years cultivating strong and lasting patient relationships built on trust — and the DSO you sell to should provide capable hands to carry the torch in your absence.

The bottom line 

Before you embark on the sales process, it’s important to enlist the help of a qualified professional who can help you weigh your options (especially when it comes to prospective buyers) and ensure that you achieve the sale outcomes that fit best with your personal goals and vision for your practice.

If you’re thinking about selling your business, schedule a free consultation with Aprio today.

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