Selling to a DSO - When Would It Make Sense?

Shared Practices | Your Dental Roadmap through Practice Ownership

Dr. George Hariri | Shared Practices Network

Businessofdentistry, Dental, Dentalpractice, Dentist, Practicemanagement, Business, Management, Entrepreneurship

4.9 • 559 Ratings

🗓️ 10 February 2025

⏱️ 37 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Selling your practice to a DSO can be tempting, but is it the right move? In this episode, Dr. Scott Leune joins us for part two of our deep dive into practice sales, exploring when it actually makes financial sense to sell and how to avoid the biggest pitfalls. We break down net multiples, walkaway options, and the long-term impact of your decision—so you don’t trade one set of problems for another. If you're considering selling, this episode is a must-listen!

Transcript

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0:00.0	Welcome to the Shared Practices podcast. We are talking about something that people really need to consider. Just like buying a practice for the first time, starting a practice for the first time, you need to educate yourself before making one of these life-changing decisions. You need to really know how to evaluate a practice. Some people spend more time
0:22.3	buying their car than they do looking at an acquisition, than researching a startup. The same applies
0:29.2	to potentially selling your practice to a DSO. You need to educate yourself. And in the last
0:34.8	episode, if you haven't listened to that episode, go back and listen to
0:38.0	my co-host, Dr. Scott Luna and I talk about why it really doesn't make sense in so many cases
0:44.6	that you're giving your practice away when you sell to a DSO. The thought today, the question today
0:50.9	is, does it ever make sense? And if it does, how do we not screw it up
0:57.0	afterwards? Because there's a whole other set of problems of having a lump sum of cash on your
1:01.0	hands that is life changing, but you have to not screw it up. So, Scott, welcome back. I'm excited for
1:07.0	part two. Yeah. So the rare kind of conditions that have to be in place where selling a
1:14.3	practice to a DSO might make financial, you know, logical sense, right? That's what we're going to talk
1:21.5	about. I'd rather it's not waste time rehashing what was on the previous episode about how to calculate the value of a
1:29.8	practice based on EBITA and the terms and the employment agreements that are typically
1:34.0	accompanied when you sell to a DSO.
1:37.2	How about you start this off?
1:39.0	When might we sell to a DSO where like Scott or Richard says, okay, that was actually probably worth it.
1:45.9	Yeah. There's the financial side of this. But having been through just some crash and burn
1:52.3	midlife crisis type stress recently in the last couple of years, a realization I've had is that any
1:58.4	time, this comes from talking with, talked with like 80 dentists
2:01.9	in the past few months who are in similar situations of stress, burned out, feeling trapped.
2:07.4	That word trapped comes up so often when you have sold or bought a practice or started a practice.
2:15.4	Maybe you didn't have the help you needed.
	...

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