What Financial Documents Do I Need To Sell My Dental Practice?

The daily life of a dentist can be hectic. Many dentists find their workdays filled with patient care, continuing education, and practice administration. Against this backdrop, dentists can struggle to make time for their personal lives. The difficulty of running a practice and providing excellent clinical care simultaneously often leads to many dentists looking to sell their practice to a dental support organization or dental partner organization. This can be a great move for many dentists. 

However, if you’re already busy as a dentist, you likely don’t know the ins and outs of selling a dental practice. That’s understandable. You’re trying to take care of your patients and run a business. You don’t know the finer points of dental practice sales. The financial statements you need to sell your practice successfully are one such finer point. 

Triumphant Transition Partners has facilitated many dental practice transitions over the years, and trust us when we say that getting your financial statements in order is of the utmost importance.  This will help your broker at the negotiating table. Why? The value of your practice and its projected future earnings are integral bargaining chips when you’re negotiating with a DSO or DPO. Correctly supplying financial statements is the easiest way to increase the value of the final offer you receive from a DSO. Pay attention to the financial statements below as you consider selling your dental practice. 

Good Financial Hygiene Helps The Sale

Before we run through the specific financial statements needed to sell, it is worth pointing out that good record-keeping is crucial to selling your practice. The better you keep up with the financial management of your practice, the easier it is to get your practice in order when you decide to sell. Clean records, good notes, up-to-date balance sheets, well-maintained payroll, detailed profit and loss statements for the past couple of years, and up-to-date dental practice management tools will help you in your quest to sell.  

Relevant Contracts & Paperwork

Every practice’s specific situation is different, so your needs here may differ vastly from those of another dentist. If you want to sell your dental practice, know that the interested partner will want to see relevant contracts. Everything from staff contracts and procurement orders to real estate documents could be applicable. 

While you work to gather this relevant information, pay close attention to all HR information about your employees as you sell to a dental support organization. While you’re passing over employment contracts and hiring information, remember to clarify the details of each employee’s employment.  DSOs will want to know the start date, pay rate, role, benefits, and last raise date of every employee at the practice. This information will expedite and simplify the process for all parties. 


The process of valuing a dental practice can be unwieldy. Different practices exist in various markets, each with unique business situations, patient bases, and company sizes. Measuring practices by collections or cash flow can be useful, but these methods smooth over many important contexts. For instance, a large practice might collect more than a smaller practice but have much higher operating costs. How, then, can dental practices be valued? 

Earnings before interest, taxes, depreciation, and amortization – or EBITDA for short – is the simplest yet most accurate yardstick to judge dental practices. This approach lets you compare different practices across a single metric. Be sure to accurately assess your practice’s EBITDA before you sell. If you don’t know this information, consider a specific EBITDA evaluation to ensure you have the most accurate assessment possible as you sell. 

Partner With Triumphant Transition Partners

Are you a dentist looking to retire or transition out of dentistry? Selling your dental practice to a dental support organization or another doctor may be your best decision, but you don’t need to go it alone. Selling a dental practice can be complicated, technical, and intensive – partner with a dental broker and dental advisor to represent your interests and receive the best possible terms. 

By partnering with Triumphant Transition Partners, you’ll receive:

  • A Dedicated & Trusted Advisor Who Only Represents Your Interests
  • Access to Our National Private and Group Buyer’s Network for Quick Access to Interested Buyers
  • Assistance with Qualifying & Screening Prospective Buyers
  • Access To Our Dental-Specific CPAs For The Best Dental Accounting Expertise
  • A Review Of Your Dental Ledger For The Past 3 Years To Ensure Accurate & Informative Information and the most value. Every dollar we uncover for you is worth $5-$15.00 dollars on the market
  • A Custom and Tailor-Made Practice Evaluation
  • Relevant Financial Information to Equip Your Advisor and Broker with Triumphant Transition Partners at the negotiating table

Contact your trusted Triumphant Advisor for a courtesy consultation today! (Please add info@triumphanttransition.com and our web address)

How to Tell if a Dental Practice Offer Is Fair

If you’re trying to sell your dental practice, you may have been fortunate enough to receive an offer. That’s a good sign! It shows that you’ve built a solid and resilient dental practice. Not only that, but it’s also a sign that a dental support organization thinks the same way and is willing to buy your practice from you. 

However, receiving an offer on a dental practice is just that – an offer. You still need to ascertain if the offer is fair and if the dental support organization aligns with your goals and long-term needs. Think of this as a “marriage” and talking with DSOs and DPOs as the “dating” phase. If you’re a dentist, you might not have sold many small businesses and can thus be forgiven if you feel overwhelmed by the process. Also, note that each DSO spends roughly $250,000 on direct marketing and mailers to dentists and practitioners because, as the old adage goes, buy low and sell high.

How can you tell if a dental practice offer is fair? Try using the methods below to get a feel for the offer. If one or more of the below is true, you can rest assured that your dental practice offer is fair. 

You’ve Received Multiple Assessments

Valuing a practice can be difficult. The best way to ensure that your dental practice offer is fair is to receive multiple assessments. It’s quite easy for two assessors to have slightly different takes on the cost of a dental practice. Multiple assessments reduce the odds of one assessment being taken as gospel truth. 

This is especially worth remembering if you’re receiving an offer directly from a DSO. These DSO offers are typically lower than the market at large and should never be taken at face value. Additional assessments should be used to counter low-ball offers and give the selling dentist leverage at the negotiation table. If you have met one DSO, you have met only one DSO. 

A savvy assessor will also use multiple assessment methods. If various methods show comparable asking prices, you can rest assured that you have a good gauge of the practice’s value.

A qualified assessor will consider your practice’s:

  • Cash-Flow
  • Future Earnings
  • Value of Current Assets
  • Active and New Patient Base
  • Payor Mix
  • Competition 
  • Marketing spend and branding
  • Practice turnover

A custom valuation of the practice is always recommended. A rule-of-thumb valuation might give you a ballpark estimate, but that’s not good enough to sell your practice, which is likely the biggest deal of your life and will directly impact your future and indirectly your team’s future. Trust us; get your practice assessed so you are better positioned to resist unfair offers to buy. 

You Know the Market

A way to tell if an offer is fair is to be aware of trends within the market. If you know what comparable dental practices are going for, you’re well-positioned to push back against unfair offers from DSOs. 

It is worth remembering that this is more complex than knowing what a dental practice in your market sold for. A multi-associate dental practice that owns multiple pieces of real estate will go for a much higher price than a solo practitioner’s dental office. Inversely, a practice with cutting-edge, high-grade medical equipment might be worth more than a practice of the same size with older tech. You must have a trusted advisor to help you through the process and advise on what is and isn’t fair for your practice firmographics. There are many metrics outside of % of collections or EBITDA to determine the true value of your practice. As a sell-side advisory with buy-side experience, we know the trends and metrics that matter for you. 

You’ve Reviewed the Fine Print

It’s easy to get focused on the asking price when reviewing the offer. You should stay focused on this figure, as it’s an important part of any deal. However, the fine print is an often-neglected piece of the puzzle that can make or break your satisfaction with the deal. The deal terms, culture and partner are just as, if not more important for you as a seller. The value will be there if you have the right partners, but anyone can offer a high valuation, but not everyone can get you the high valuation. 

Consider key decisions like hiring, firing, buying power, marketing, the experience of the DSO, who is their sponsor, have they recapitalized healthcare or any platform before. You will be asked to stay on as a dentist with a dental support organization after closing; you might expect to retain control over these decisions and will have full autonomy with the right DSO. If the fine print of your deal specifies that the DSO can hire and fire, you might be in for a rude awakening. 

Few things can sour a business partnership as quickly as differences over business decisions. If your deal contractually obligates you to stay on despite these differences, you may be stuck in an unhappy business partnership. Reviewing the fine print of any terms is necessary to ensure you aren’t stuck in an unfair deal and having a qualified representation that knows the market and timing matters. 

The DSO Aligns to Your Goals

It can be challenging to gauge, but not all DSOs fit all dentists well. Each has its own specific policies, paradigms, and standard operating procedures. A DSO might offer favorable terms and a fair price and still not fit your particular needs well.

You must understand exactly why you’re selling your dental practice and what you want out of the sale. Once you understand this, you’re well-positioned to review offers from DSOs and compare these offers against your unique goals. 

If all of this is overwhelming, know that help from a qualified dental broker is available. Selling and transitioning a dental practice is difficult, tedious, and you don’t know what you don’t know. A trusted partner in the process can help you from listing to closing and everywhere in between. Moreover, they can even help you sell your practice above the asking price and the terms you deserve while impacting your legacy, team, and family in a positive matter. 

An excellent dental broker will:

  • Help you screen buyers and vet them thoroughly 
  • Assess your practice to help you understand its value
  • Have experienced healthcare CPAs and underwriters
  • Experience on both the sell-side and buy-side
  • Know what metrics matter to a DSO and which ones do not 
  • Can handle the lease terms as well as practice terms
  • Experienced and have a strong network and relationships with the buyers
  • Equip your attorneys with relevant documents
  • Serve as a strategic consultant throughout the process
  • Offer unique insight into the market as a whole
  • Have experience in selling and buying dental practices
  • Know the timing of an exit of a DSO and their Sponsorship
  • Know the DSO agreements, deal structures, and C-suite level team members

Are you ready to sell your dental practice? Your trusted Triumphant Transition Partners advisor is available for a free courtesy consultation to discuss your unique needs. Call Now!