Selling A Dental Practice Efficiently: Detailed Steps
Selling a dental practice can be an overwhelming and complex process. At Triumphant Partners, we guide and support dental practitioners in partnership with all organized dental groups. We know the decision to sell your business is a difficult one, but here at TTP, we view it as a 100-year decision. Triumphant represents your best interests only, while buyers solely represent theirs. Contact Triumphant Partners for assistance during the practice selling process.
It is crucial to involve a dental attorney to navigate the complex legal documents and agreements, ensuring that all legal terms align with your goals. Additionally, professional dental brokers play a vital role in facilitating the sale of dental practices. They bring expertise in marketing and connecting sellers with qualified dental practice buyers, leveraging their established networks and insights into potential buyers actively searching for practices.
With experience in the DPO and DSO space, we know the necessary metrics to maximize our clients’ return, negotiate the ideal sale terms you want, and keep you in control. When considering a dental service organization, it’s important to recognize the advantages they offer, such as enhanced resources and professional support. However, potential sellers should also consider the implications for their practice’s identity and conduct thorough evaluations when selecting DSO partners. Why Triumphant Transition Partners?
Overview of Dental Practice Ownership
A dental practice is a business that provides essential dental care services to patients, and it represents a significant investment for many dentists. The dental industry is a growing market, with an increasing demand for dental services, making it an attractive option for dentists looking to start or acquire a practice. Dental practices can be structured in various ways, including sole proprietorships, partnerships, or corporations, each offering its own set of benefits and drawbacks.
Understanding the different types of dental practices is crucial for dentists who want to start or transition their practice. General dentistry practices offer a wide range of services, while specialty practices focus on specific areas such as orthodontics or oral surgery. Additionally, dental service organizations (DSOs) provide non-clinical management services, allowing dentists to focus more on patient care.
A well-planned dental practice can provide a good work-life balance, financial stability, and a sense of fulfillment for dentists. By carefully considering the type of practice and its structure, dentists can create a business that meets their professional and personal goals.
You Want to Sell Your Dental Practice- Now What?
When engaging in dental practice selling, selecting the right dental practice brokerage is an indispensable step. This decision holds paramount importance because Dental Support Organizations (DSOs) and Dental Practice Organizations (DPOs) vary significantly, and understanding the differences between a dental service organization and a DPO is crucial. Selecting the right one can significantly impact the sale and transition of your practice. Dental brokers possess specialized knowledge and experience that can help set the right listing price and streamline the transition process. It’s not just about finding a buyer; it’s about ensuring a smooth transition while maximizing the value of your dental equipment, financial assets, and practice goodwill. Dental brokers can also help vet potential buyers to ensure they are qualified and align with the seller’s values, ensuring a smoother transition and partnership.
By partnering with a specialized dental practice brokerage like Triumphant Partners, you’re ensuring that your practice’s true value is recognized and that the process is as smooth as possible. From understanding the market to negotiating the best deal, the right brokerage can make all the difference in maximizing your return and safeguarding the legacy of your dental practice.
Carlo and Nate are exceptionally knowledgeable at what they do. They went above and beyond our expectations, helping us find the ideal partnership that was both economically and culturally aligned. I highly recommend them to anyone considering their transition options. Love these guys !
The team here is wonderful. They care, are helpful beyond my expectations, and most importantly, matched me with the right partner for my situation. They worked tirelessly through the entire process. You will not regret working with them.”
Awesome experience with great team!! Decisions like these can be life changing and I feel very lucky to have crossed paths with Triumphant! Nate, Carlo, and the rest of the team were awesome! I’d do it again and feel blessed for what’s ahead!”
I’m not sure I have enough positive adjectives to use for Nate Thompson. Professional. Reliable. Thorough. And most of all, caring and authentic. It has been an exhausting, emotional roller coaster and I can’t even imagine what it could have been like without Nate AND his team in my corner. Carlo you were amazing! Thank you gentlemen for all you have done.”
Nate and Carlo at Triumphant were fantastic to work with. They made the transitioning process very smooth and I could not be more pleased with the partner and situation that we landed with. I highly recommend Nate and the team at Triumphant.”
Collection of Documents
When preparing to sell your dental practice, it’s essential to gather all necessary documents to ensure a smooth dental transition. This collection of documents will help you understand the value of your practice and provide potential buyers with the information they need to make an informed decision.
Some of the key documents to collect include:
Financial Statements
Complete financial statements for the past three to five years are essential. These should include income statements, balance sheets, and cash flow statements. These documents provide a clear picture of your practice’s financial health and are crucial for potential buyers to assess the dental practice value.
Tax Returns
Collect tax returns for the past three to five years to offer a comprehensive view of your practice’s financial performance. This transparency helps build trust with potential buyers.
Patient Records
Ensure that all patient records are up-to-date and organized, including medical histories, treatment plans, and billing information. Organized patient records demonstrate the practice’s commitment to patient care and operational efficiency.
Equipment Inventory
Create a detailed inventory of all equipment, including dental chairs, X-ray machines, and other essential tools. An accurate inventory helps in the valuation process and reassures buyers about the practice’s operational readiness.
Lease Agreements
If you rent your practice space, collect copies of your lease agreements, including any renewal options or termination clauses. Understanding the terms of the lease is vital for potential buyers to evaluate the long-term viability of the practice location.
Employee Contracts
Gather contracts for all employees, including dentists, hygienists, and administrative staff. Clear employee agreements help ensure a smooth transition and continuity of care. Additionally, consider the possibility of continuing to work in a flexible role as an associate after the sale, allowing for partial practice ownership or maintaining clinical autonomy.
Other Relevant Documents
Having these documents organized and readily available will help you navigate the sales process with confidence and ensure that potential buyers have the information they need to make an informed decision.
Having these documents organized and readily available will help you navigate the sales process with confidence and ensure that potential buyers have the information they need to make an informed decision.
Define Your Goals and Expectations
Defining your goals and expectations is a crucial step in the process of selling your dental business. Once you have decided to sell your practice, it’s essential to have a tailored strategy that considers what you want to achieve from the sale, whether it’s retirement, seeking more balance, or scaling your practice. Having a clear understanding of your goals will help you make informed decisions throughout the process and ensure that you find the right partner to help you achieve your objectives.
When defining your goals, consider the following:
- Financial Goals: Determine the financial outcomes you wish to achieve from the sale. This includes the desired sale price and any financial arrangements post-sale.
- Non-Financial Goals: Reflect on non-financial aspirations such as maintaining the legacy of your practice, ensuring the well-being of your staff, and preserving patient care standards.
- Sales Process Expectations: Outline your expectations for the sales process, including the timeline, level of involvement, and any specific conditions you want to be met.
- Transition Period: Consider your expectations for the transition period, including the level of support and training you will provide to the new owner.
Recent Transactions
At Triumphant Partners, our team has assisted countless dentists and medical professionals in facilitating the sale of their businesses. Here are a few of our most recent transactions and satisfied clients.
Houston,TX
We are excited to announce another triumphant closing. After an extensive process in which we introduced over 10 partners to our client, we found the best partner for our client.
Dr. Cumberbatch has secured her legacy, her team’s future, and her financial future with clinical autonomy with Star Dental Partners, a portfolio company of Tyree & D’Angelo Partners, a very active private equity group in the desirable healthcare sector based in Chicago, IL.
Denver GP
We are thrilled to announce another successful transition for our client and to find the right fit that aligns with her culture, patients, and community. Congratulations to Dr. Kim Miyamoto on transitioning her Denver area General Practice to Dr. Conan Zhu.
Thank you to Kevin Rouse at U.S. Bank for your support.
Memphis, TX
We are pleased to announce another triumphant closing between Dr. Blake Billups and GPS Dental in Memphis, TX.
This was an extensive process with highly competitive and qualified offers. We were able to secure over 270% of collections for our client.
We are thrilled for Dr. Billups and the GPS family.
Memphis, TN
We are pleased to announce another successful transition between Shipmon & Bell and GPS Dental in Memphis, TN.
This was a seamless fit for both parties, and it is exciting when you can align a great client with the right fit. We had over eight offers and over a 7.9x, and we knew as a team the best match for this specific transition.
Congratulations to Dr. Todd Bell and his team.
Central Florida
The Marion Dental Group in central Florida closes on Friday.
Dallas/Ft. Worth
We are thrilled to announce another triumphant transition: Dr. Sonya Reddy of Smileup Dentistry is transitioning her practice to Dr. Diana Lopez. What excites us about this deal is that besides the continued patient care; from the day Dr. Reddy enlisted our firm until funding, it only took 60 days total. That includes discovering, gathering pertinent information/documents, underwriting, procuring a buyer, LOI, lease reassignment, agreed-upon agreements, and funding.
Thank you for entrusting your practice to us, Dr. Reddy, and congratulations to Dr. Lopez.
Houston, TX
We’re excited to announce the successful partnership between our client, Dr. Barry Heaton, in Houston, TX, and Dentive, a doctor-centric DSO group.
After careful consideration and receiving multiple bids, Dentive emerged as the ideal match. During due diligence, Dr. Heaton’s Perio practice experienced record production months, and we secured additional cash in the hundreds of thousands in true-up.
Greater Kansas City, MO
We are thrilled to announce the partnership with our client Dr. R and Apex Dental Partners as they enter the greater Kansas City, MO market and continue expanding their footprint.
We cannot thank Apex Dental Partners enough. They were aligned and dedicated to the entire process from start to finish, which shows the value they bring to all their partners. It was an absolute pleasure, and congratulations to our client for ensuring his patients, team, and family have the best clinical support and perfect exit strategy when that time comes down the road. Both our client and Apex shared the same philosophies in total patient care and excellence.
Nashville, TN
We are excited to announce the affiliation between an iconic multi-doc general practice in Nashville, TN, and United Dental Corporation. Our clients fielded 10 LOIs, and we were able to choose the perfect match and the right terms. Our clients received over 200% of collections.
Good luck to Dr. Robert Ammarell and Dr. Matt Gorham on your Triumphant DSO affiliation.
Dallas, TX
We are thrilled to announce the affiliation between the standard of General Practices in the Dallas Metroplex and are excited for the Bayside of Rowlett’s partnership with Squire Dental DSO.
Dr. Brad Boeke fielded multiple offers and received over a 7.5x for his multi-doc and multi-million dollar practice. Best of luck to you, Dr. Boeke. It was a pleasure advising you throughout this competitive process and a Triumphant day for all parties involved.
Miami, FL
Another successful DSO affiliation with our client, Dr. David DelCastillo, in Miami, FL, and Star Dental Partners.
We received multiple bids, and Star Dental Partners was the best fit for our client with their doctor-centric approach. This was a triumphant partnership, and our client received a 40% higher offer when he hired us to advise them than he had when represented by another brokerage. We are excited about this Triumphant DSO partnership. Good luck, Dr. Del Castillo.
Breakwater, ME; Tory Hills, ME; Mountain View, ME
We are thrilled to announce another Triumphant DSO transition with our client, Dr. Shilo Annis, and his 3 locations, Breakwater, Tory Hills, and Mountain View Dental in Maine with Straine Dental Management.
After considering multiple options, SDM was the best choice because of its experience and long success periods over the last 30+ years.
It was an absolute pleasure and privilege to work with you, Dr. Annis, SDM, and the exceptional team at Healthstream Ventures. Your invaluable contributions and unwavering support were instrumental in making this transition a success. Thanks to our collective efforts and collaboration, we were able to close this transition at a great pace, resulting in a favorable outcome for all parties involved.
We were able to negotiate upside in additional offices and received over 200% of collections. This was another Triumphant success.
Increasing Your Practice’s Value
Increasing your practice’s value is essential to achieving a successful sale. There are several strategies you can implement to increase your practice’s value, including:
- Improving Financial Health: Focus on increasing revenue, reducing costs, and improving cash flow. This can be achieved by optimizing billing processes, reducing overheads, and enhancing service offerings.
- Enhancing Operational Efficiency: Implement systems and processes to improve patient flow, reduce wait times, and increase productivity. Efficient operations can lead to higher patient satisfaction and better financial performance.
- Investing in Technology: Invest in modern technology, such as digital radiography and practice management software, to improve efficiency and reduce costs. Cutting-edge technology can make your practice more attractive to potential buyers.
- Building a Strong Team: Invest in your staff by providing training and development opportunities. A well-trained and motivated team can improve patient care and reduce turnover, adding value to your practice. Developing the right personnel and processes is crucial for creating a sustainable business model and fostering a culture of accountability and excellence.
- Expanding Services: Consider expanding your services to attract new patients and increase revenue. Offering a broader range of services can make your practice more appealing to potential buyers.
By implementing these strategies, you’ll be able to increase your practice’s value and attract potential buyers. Additionally, selling your practice can lead to improved work-life balance, allowing you to focus on personal well-being alongside professional success.
What to Consider when Selling a Dental Practice to a DSO or DPO.
Selling your practice involves numerous considerations and benefits, such as better work-life balance and profitability, especially when deciding between options like selling to a trusted employee or a dental service organization (DSO). Dental support organization (DSO) & DPO due diligence is critical. There are countless DSO/DPOs & Dental Office Brokers to choose from, and each is unique – selecting the perfect one for your practice is very important. DSOs provide essential non-clinical management services, enabling dentists to focus on patient care while easing operational responsibilities. Partnering with the best dental practice brokerage is essential.
Selling to another dentist is significant as regulations often restrict the sale to licensed practitioners, ensuring a smoother transition and operational continuity for the selling dentist.
Pros and Cons of Selling Your Dental Practice
Deciding to sell your dental practice can be a demanding choice. At Triumphant Partners, we take the time to sit down and discuss your needs and understand your goals.
Owning your own practice can be financially rewarding, but it also involves strategic considerations when planning the sale, whether due to retirement or pursuing new opportunities.
This allows us to determine the best route forward and custom-tailor your transition strategy. We have experience selling to doc-to-doc, Private Equity, and with all the organized dental groups. Our team is fully equipped to guide you through every step.
How Much Control Do I Have?
When looking to sell your dental practice, this is often an overlooked and extremely vital aspect of any successful transition. You will be expected to share some or all the control within your practice. Letting us negotiate the precise deal terms to protect you is essential, and we remove all the hidden terms that can be in a contract agreement
What If I Own My Real Estate?
This is often overlooked and very important in recommending the best DSO/DPO for your transition. Here at TTP, we have a team of licensed and experienced Commercial Real Estate agents that will discuss the best fit when deciding to transition your building or negotiating the lease terms with your new partner. This aspect is critical in maximizing the return on your commercial space now or selling to an investor in the future.
How Is My Practice Valued?
Here at Triumphant, we have certified healthcare public accountants on our team to maximize the value of your practice. Practice valuation is crucial in determining the sale price, and during our intake and discovery, we will partner with your team and review all your financial documents to secure that you receive the highest valuation possible.
This is done through a process where we build up your EBITDA. Your EBITDA and our carefully crafted metrics formula ensure we get you the highest VALUE.
Consider Your Post-Sale Role
Our team specializes in negotiation strategies to secure the best deal for your practice. We ensure that terms favor your goals, whether it’s financial returns or ensuring patient continuity. TTP also assists in finding financing solutions if necessary, providing you with multiple options for a successful transition.
Options for Post-Sale Involvement:
- Short-Term Transition Period: Some dental practitioners choose to stay on for a few months to help transition the practice to the new owner. This period allows you to introduce the new management to your patients, staff, and the operational procedures of your practice. This involvement can significantly reduce disruption and help maintain patient loyalty.
- Long-Term Engagement: For those who prefer to remain active in their operation negotiating a long-term role post-sale can be beneficial. This could involve continuing as a dentist within the practice, taking on a managerial role, or acting as a consultant to ensure the continued success of the practice under new ownership.
- Complete Exit: Alternatively, some dental practitioners may prefer a complete exit from their business post-sale. This option is ideal for those looking to retire, relocate, or pursue other opportunities. Our team will work to secure the best terms that support a seamless and satisfying departure.
Achieving Your Desired Outcome
No matter your post-sale aspirations, Triumphant Partners is committed to providing a tailored approach that meets your specific needs. Our expertise in selling dental practices ensures that you achieve a favorable outcome, whether you seek continued involvement or a complete transition away from the practice. With our support, you can confidently navigate this important phase, knowing that your future and the future of your business are in capable hands.
Finding the Right Buyer
Identify the Ideal Successor
Finding the right buyer for your dental practice is crucial to ensuring a smooth transition and protecting the practice’s legacy. It’s essential to identify the ideal successor who shares your values, vision, and commitment to providing exceptional patient care.
Assessing your business and personal goals before making decisions about transition options is vital. This informed planning helps in choosing the right transition strategy for your dental practice.
When evaluating potential buyers, consider the following factors:
- Their experience and qualifications in the dental industry.
- Their financial resources and ability to secure financing.
- Their management style and approach to patient care.
- Their long-term goals and vision for the practice.
By identifying the ideal successor, you can ensure that your dental practice is in good hands and that the transition is successful for both you and the buyer.
Marketing and Confidentiality
Discreet and Professional Marketing
Marketing your dental practice for sale requires a delicate balance between attracting potential buyers and maintaining confidentiality. It’s essential to work with a reputable dental broker who understands the importance of discretion and can market your practice in a professional and confidential manner.
A discreet and professional marketing approach includes:
- Utilizing online platforms and industry-specific websites to reach a targeted audience.
- Networking with other dental professionals and industry experts to generate interest and referrals.
- Creating a confidential practice profile that highlights the practice’s strengths and opportunities.
- Screening potential buyers to ensure they are qualified and serious about purchasing a dental practice.
- By maintaining confidentiality and marketing your practice in a professional manner, you can attract serious buyers and achieve a successful sale.
Negotiating the Sale of Your Dental Practice
Negotiating the sale of your dental practice can be a challenging and emotional process. It’s essential to approach negotiations with a clear understanding of your goals, the market value of your practice, and the needs of the buyer. A successful negotiation requires effective communication, strategic planning, and a deep understanding of the dental industry.
It is also crucial to consider the significant tax implications involved in the sale. Consulting tax professionals can help structure the sale effectively and minimize potential capital gains taxes.
Strategies for Successful Negotiations
- Define Your Goals: Clearly define your goals for the sale of your dental practice, including your desired sale price, transition period, and post-sale role. Knowing what you want to achieve will help you stay focused and make informed decisions during negotiations.
- Understand the Market: Research the market value of your dental practice, including the value of your dental equipment, real estate, and goodwill. This knowledge will empower you to negotiate confidently and ensure you receive a fair price.
- Know Your Buyer: Understand the needs and goals of the buyer, including their financial situation, practice management style, and growth plans. This insight will help you tailor your negotiation strategy to meet both parties’ needs.
- Be Flexible: Be open to creative solutions and alternative deal structures that meet the needs of both parties. Flexibility can lead to win-win outcomes and facilitate a smoother negotiation process.
- Seek Professional Advice: Work with professional advisors, including a dental broker, attorney, and accountant, to ensure a successful negotiation. Their expertise can help you navigate complex legal and financial aspects, protecting your interests throughout the process.
Creating a Sales Contract
Creating a sales contract is a critical step in the process of selling your dental practice. A sales contract outlines the terms and conditions of the sale, including the purchase price, payment terms, and transition period.
When creating a sales contract, consider the following:
- Purchase Price: The purchase price should be based on your practice’s valuation, which should be determined by a dental broker or appraiser. This ensures that the price reflects the true value of your practice.
- Payment Terms: The payment terms should be clearly outlined, including the amount, frequency, and duration of payments. Clear payment terms help avoid misunderstandings and ensure a smooth transaction.
- Transition Period: The transition period should be clearly outlined, including the level of support and training provided to the new owner. A well-defined transition period can help maintain continuity and patient care standards.
- Asset Transfer: The asset transfer should be clearly outlined, including the transfer of ownership and possession of assets. This includes dental equipment, patient records, and any other tangible or intangible assets.
- Employee Agreements: The employee agreements should be clearly outlined, including the terms and conditions of employment. This ensures that staff members are aware of their roles and responsibilities post-sale.
By creating a comprehensive sales contract, you’ll be able to ensure a smooth transition and protect your interests.
Closing the Sale and Ensuring a Smooth Transition
Closing the sale of your dental practice requires careful planning and execution to ensure a smooth transition for both you and the buyer. A successful transition requires attention to detail, effective communication, and a deep understanding of the dental industry. A well-structured treatment plan can guide you through the transition process, helping you make informed decisions that align with your goals.
Marketing and Confidentiality
Discreet and Professional Marketing
Marketing your dental practice for sale requires a delicate balance between attracting potential buyers and maintaining confidentiality. It’s essential to work with a reputable dental broker who understands the importance of discretion and can market your practice in a professional and confidential manner.
A discreet and professional marketing approach includes:
- Utilizing online platforms and industry-specific websites to reach a targeted audience.
- Networking with other dental professionals and industry experts to generate interest and referrals.
- Creating a confidential practice profile that highlights the practice’s strengths and opportunities.
- Screening potential buyers to ensure they are qualified and serious about purchasing a dental practice. Engaging with a potential buyer is crucial to assess mutual fit and ensure a smooth transition.
- By maintaining confidentiality and marketing your practice in a professional manner, you can attract serious buyers and achieve a successful sale.
the final step: Asset Purchase Agreement
Trends and Insights in the Dental Industry
The dental industry is constantly evolving, with new technologies, treatments, and business models emerging all the time. As a dental practice owner, it’s essential to stay informed about the latest trends and insights to ensure that your practice remains competitive and attractive to potential buyers.
Some of the current trends in the dental industry include:
- The Rise of Dental Service Organizations (DSOs): DSOs are becoming increasingly popular, offering dentists the opportunity to focus on clinical work while outsourcing administrative tasks. This trend can make your practice more appealing to potential buyers who value clinical autonomy and operational support.
- Increased Focus on Patient Experience: Patients are becoming more discerning, and practices that prioritize patient experience are seeing increased loyalty and retention. Enhancing patient experience can significantly boost your practice’s value and attractiveness to potential buyers.
- Growing Demand for Specialized Services: Patients are seeking specialized services such as orthodontics, oral surgery, and cosmetic dentistry, creating opportunities for practices to diversify their offerings. Expanding your services can make your practice more competitive and appealing in the market.
- Advances in Technology: New technologies such as digital impressions, 3D printing, and artificial intelligence are transforming the way dentists work and improving patient outcomes. Investing in cutting-edge technology can enhance your practice’s efficiency and appeal to tech-savvy buyers.
By staying informed about these trends and insights, you can position your practice for success and attract potential buyers who are looking for a forward-thinking and competitive practice.
Are You Ready to Begin the Transition Process with Triumphant Partners?
Selling a veterinary practice is a significant decision that requires careful planning and execution. Understanding the process is crucial for a smooth transition. Get in touch with us today and see how a partnership with Triumphant Partners can help you in your journey.