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Transitioning with a DSO: How it Works by Jeffrey Blanchard

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Header: Transitioning with a DSO

In today's changing dental landscape, more and more dentists are choosing the dental service organization (DSO) model when selling their practices. But what goes into the process of transitioning with a DSO? As a dentist, you should be well-informed and adequately prepared when taking this major step in your career and your life. Having the right mindset and knowing what to expect can help ensure a seamless and successful transition.

Initial contact
There are numerous DSOs in the dental marketplace, each with its own style and approach to dentistry. It is important to do the necessary research and decide which organization can offer a solution most aligned with your goals. Make the phone calls; check out the websites.

Once you've decided on a DSO, you can expect a basic introductory conversation with the company's representative. This will be a chance for you to get more information, so come prepared with a list of questions.

During this conversation, expect to discuss your practice, goals and objectives. Remember, this transaction is about you, so make sure the representative is focused on the goals you want to achieve and how well your practice fits with the DSO's model. Do you plan to retire? Do you want to stay on but leave the business details to the DSO? How long a transition would you like? Do you want to sell the practice outright and walk away? How will this affect the other dentists or associates on staff?

Share information
Next, the DSO representative will work with you to gather some high-level information about your dental practice, which will be used in the valuation process. Although each DSO does things a little differently, you can expect the organization to request business tax returns, performance reports, accounts receivable information, profit-and-loss statements and insurance-plan participation information.

Complete and verifiable information is critical, so it's important to be as precise and thorough as possible when delivering these details. DSOs can also differ as to when they collect this information. They may collect it all up front, or they may only request tax information and plan on collecting more as the process moves along.

Office visit
Facility condition and the surrounding community are both as important as financial performance when your practice is being evaluated. The DSO representative will assess the facility as well as the condition of the space and equipment to determine what future investment is needed. Additionally, your representative will evaluate the community itself to see how it would fit with the organization.

Thinking about an office visit may feel unnerving, especially if you are not ready to share your intentions with your staff. However, you can ask your DSO representative to keep the visit as discreet and confidential as you prefer. The visit can be scheduled after regular hours, or the DSO representative can keep his or her profession confidential.

The offer
After all the initial information has been gathered, you will be presented with an offering price for your practice. The means of establishing the final offer price will differ, based on the DSO.

Some DSOs will immediately present you with a Letter of Intent (LOI), which is largely based on high-level financial information. The LOI is a document outlining the transition's terms and conditions, as well as an initial price point. After you have signed the LOI, some additional, more specific information will be gathered. This information will be used to create a final price offering for your practice.

Other DSOs gather the majority of the information up front and present a purchase proposal. The proposal is a general overview of the terms and conditions established from the data gathered. Once you have had a chance to review the details, the DSO representative will draft the formal LOI. With this approach, the original asking price for your practice is unlikely to change between the proposal stage and the final sale.

Regardless of which approach is used, you will have the opportunity to review the details of the proposed agreement before signing anything. Signing the LOI represents both parties' commitment to the transition process, so review the terms carefully to ensure they meet your goals before you sign.

Agreements and preparation
Once you have signed the LOI, the DSO rep will share the legal contract with you. Take time to review the terms of the contract with your advisors—legal and personal—to ensure that all of the stipulations are understood. Be very diligent during this review, and note any questions or concerns you may have. This will be the last opportunity to negotiate any revisions to the details. Know before you sign.

Another thing to bear in mind as you prepare is that you will have to inform your staff about the transition. It is important to craft your announcement in a way that articulates both why you made the decision and how it will impact your staff. This will help to create a smooth and positive transition experience for all involved.

Affiliation
By signing the contract, you have committed to an affiliation with the chosen DSO. You will be given details as to how and when your payment will be finalized, after which the sale of your practice will be complete. At this time, you and your staff can expect to go through an orientation, during which you will be trained in the policies and procedures of the DSO to ensure that your practice continues operating effectively under the new partnership.

It is important to remember that some things will inevitably change during this process. The amount of variation depends on the DSO, but certain adjustments will be required to ensure that the DSO is able to successfully provide support for your practice. Keeping an open mind and being patient will make the process much more manageable.

The process in action
So you have seen the process on paper, which is a great start. But how does it play out in real life? What are the true benefits of a DSO transition for dentists, and can it result it a positive and mutually beneficial outcome?

Dr. Greg Killian of Middleton, Wisconsin, recently partnered with Midwest Dental and offers his first-hand experience.

Killian has practiced dentistry for more than 36 years, the last seven of which have been alongside his son Brent. During that time he has built a successful practice that he is very passionate about. So when Killian decided he was ready to transition away from handling the business side of the practice in order to focus on dentistry, not just any solution would do.

"We had several offers to buy our practice," he said. "But I wanted to keep working with my son and managing our practice together."

In 2014, the doctors combined with Midwest Dental. "I only regret that I didn't do this sooner," said Killian. "I think it is because you hear stories about losing autonomy, about giving up the reins to your practice. It doesn't sound very appealing. But, when it comes to day-to-day clinical decisions, we are given the latitude to continue running our practice in the manner we choose."

There are some changes that he does enjoy, however, such as the phrase: "Doctor, we'll take care of that for you."

"I love hearing those words," said Killian. "We used to have to do everything ourselves. Now Midwest Dental manages the non-clinical responsibilities for us, while adding support to the clinical side of the practice. It is a tremendous advantage over the way a practice may be traditionally run."

On top of that, Killian is thrilled with the opportunities afforded his valued staff. "They now have growth opportunities and benefits that just didn't exist in our two-dentist office."

For Killian, the benefits of transitioning with a DSO extend beyond the clinic. Previously, if he wanted to take time off it was always difficult. He now sees a future with more time to travel with his wife (who is retired), visit his children and grandchildren, or just go to the cabin.

"Personal time is extremely precious to all of us," he said.

Killian continues to lead a life centered on helping his patients by relieving pain, restoring and maintaining their oral health, and creating smiles for patients from age 1 to 100.

As dentistry continues to change and evolve, the partnership allows him and his team to continue moving forward with comfort and security.

Conclusion
The DSO model has a lot to offer dentists seeking an exit strategy or looking to shed the demands of running a business. If you have determined the DSO approach is right for you and your practice, you deserve to know what lies ahead.

Informing yourself about the process, managing your expectations and preparing for the road ahead will help ensure a smooth, quick and positive transition experience for you, your team and your practice.

Jeffrey Blanchard Jeffrey Blanchard is a marketing specialist with Midwest Dental Support Center. His primary focus is supporting the business development team in acquiring new business and promoting company growth, while also providing direct, hands-on marketing support for newly acquired dental practices. Blanchard has written and produced two white papers and assisted in the development of multiple case studies related to dental-practice acquisitions.



Dentaltown Magazine
September 2025
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