Professional Transition Strategies
Professional Transition Strategies
PTS wants to help you every step of the way. Whether you're selling, buying, leasing or expanding your dental clinic, PTS is here to provide the information, answers and expertise you need. Check back weekly for our most recent blog posts!
Professional Transition Strategies

Selling to a DSO: Key Considerations for Dentists

2/13/2025 9:13:56 AM   |   Comments: 0   |   Views: 79
The landscape of dental practice ownership is evolving, with Dental Service Organizations (DSOs) presenting compelling opportunities for dentists considering a sale. While a DSO affiliation can provide financial and operational benefits, it’s essential to thoroughly evaluate the decision. This guide explores the critical factors to keep in mind when selling to a DSO.

Understanding DSOs

A DSO is an organization that provides administrative and operational support to dental practices, allowing dentists to focus on patient care rather than business management. By handling tasks such as billing, marketing, HR, and compliance, DSOs help streamline operations while typically acquiring full or partial ownership of the practice.

Reasons to Sell to a DSO
Many dentists explore DSO partnerships due to financial incentives, reduced administrative burdens, and enhanced operational support. Key advantages include:

Financial Benefits
- DSOs, often backed by private equity, can offer competitive purchase prices and flexible deal structures
- Sellers may receive upfront cash payments along with opportunities for long-term equity growth

Operational Support

- Offloading administrative responsibilities allows dentists to prioritize patient care and improve work-life balance
- DSOs provide access to marketing, staffing, and compliance expertise to enhance practice efficiency
- Leveraging economies of scale, DSOs negotiate better pricing for labs and supplies, improving profitability

Potential Drawbacks
While selling to a DSO has advantages, it’s crucial to be aware of potential challenges:

Loss of Autonomy

- A small number of DSOs may impose policies that limit a dentist’s control over clinical and operational decisions

Impact on Practice Identity

- Some DSOs require branding or procedural changes that could alter the practice’s reputation

Compensation Considerations
- While rare, some dentists experience income fluctuations if performance metrics set by the DSO are not met

Future Uncertainty
- DSOs may introduce operational changes or growth expectations that don’t align with the seller’s long-term vision

Key Questions to Ask Before Selling
Before committing to a DSO sale, dentists should ask:
- What are the financial terms, including upfront payments and earn-out structures?
- How will my role and compensation change post-sale?
- What branding or operational changes will be required?
- Are there non-compete clauses or other restrictions?
- How does the DSO prioritize patient relations and quality of care?

Avoiding Common Mistakes

Lack of Representation

Without an experienced broker, dentists may struggle to generate multiple competitive offers or negotiate favorable terms.

Choosing the Wrong DSO
Not all DSOs are alike — partnering with one that aligns with your goals and values is critical to long-term satisfaction.

Skipping Due Diligence
Thoroughly reviewing the DSO’s financial stability and operational model helps avoid future complications.

Navigating the Sale Process
Selling to a DSO involves several key steps:

1. Practice Valuation: Determine a fair market value using EBITDA, revenue, patient demographics, and location.
2. Finding the Right DSO: Work with a broker to explore multiple offers and identify the best strategic fit.
3. Negotiation: Collaborate with legal and financial advisors to secure favorable deal terms.
4. Transition Planning: Develop a structured plan to ensure a smooth handover for staff, patients, and operations.

Final Thoughts
Selling to a DSO can be a game-changing decision, offering financial rewards and operational relief. However, it’s crucial to weigh the potential trade-offs, ask informed questions, and seek professional guidance. A well-planned approach ensures a successful transition and maximizes the value of your practice sale. For expert insights on navigating the DSO landscape, consult our team of experienced transition brokers.
You must be logged in to view comments.
Total Blog Activity
997
Total Bloggers
13,451
Total Blog Posts
4,671
Total Podcasts
1,788
Total Videos
Sponsors
Townie Perks
Townie® Poll
Who or what do you turn to for most financial advice regarding your practice?
  
Sally Gross, Member Services Specialist
Phone: +1-480-445-9710
Email: sally@farranmedia.com
©2025 Dentaltown, a division of Farran Media • All Rights Reserved
9633 S. 48th Street Suite 200 • Phoenix, AZ 85044 • Phone:+1-480-598-0001 • Fax:+1-480-598-3450