Should You Sell Your Dental Practice to a DSO? Why There's a Third Option

Should You Sell Your Dental Practice to a DSO? Why There's a Third Option

Most of the clinical owners I work with started off as a great associate, or decided right out of school to buy a practice. Things are going fabulous until they aren't.

Then they hit a ceiling of complexity. They're trying to get to the next level, and they realize they have two options: keep grinding it out on their own, or sell to a DSO.

Should You Sell Your Dental Practice to a DSO?

Selling your dental practice to a DSO can be the right move, but not when burnout is making the decision for you. If a couple of unlocks would take your practice to the next level, selling now means fire-selling at the worst time. A third option is to get the leadership and talent help a good DSO offers without giving up equity or control, grow the value of your practice, and then decide whether to sell from a place of strength.

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Option 1: Keep Grinding It Out on Your Own

Option number one is you just keep operating the practice the best you can. I call that wandering in the wilderness.

Because you're smart, you'll usually figure things out eventually. But a lot of owners get completely burned out along the way. Your team has come up with the best ideas it can, and you find yourself stuck in the circle.

Option 2: Sell Your Dental Practice to a DSO

A lot of people think selling to a DSO is driven by private equity and the money. In my experience, it's really driven by burnout. It's practice owners who need talent help and can't figure out how to solve the problems anymore.

Maybe your office manager turned over. Maybe some of your locations aren't performing like the others, and you're not sure how to build regional leadership. Or your marketing strategy or cash flow just isn't playing out right.

So you start thinking, "Maybe if I join a DSO, they'll give me the resources and the team and the talent."

But there's a downside: you feel like you're giving up equity and control. So there's a lot of negotiation around how the money is going to work and whether it's worth it. Sometimes the money ends up acting as a soothing balm for the feeling that you're giving up that equity and control.

What Does a Good DSO Actually Offer?

I'm not anti-DSO. There are lots of different versions out there, and finding one with the right culture fit and clinical standards of care that match yours is super important.

The best DSOs have a strong team and strong processes. They've worked through technology stacks that actually help the practice. They know how to negotiate with insurance companies, and they can take the financial burden off you by working with the banks on your cash flow needs. That's what most owners are hoping for when they look for a DSO partner.

When a DSO Is the Wrong Fit

You've probably also heard what happens with the wrong fit:

• A lot of your equity got rolled, and now there's no clear future exit in a changing marketplace
• The DSO is overleveraged with debt
• The systems and processes are less mature than you thought, and they're still building what they want to become
• Every practice is on different systems, so nothing really comes together at the group level
• You were promised you wouldn't lose much control, but that also means there aren't many standards or much help from the team

When that happens, the thing you were looking for ("I need to be told exactly what to do in some of these areas") doesn't exist on their platform either. You're not getting the direction or the support you were hoping for. You're still on an island, with less control and maybe not as much money in your pocket as you'd hoped.

If you're already weighing offers, our breakdown of DSO deal structures walks through the pros and cons of each one.

Why Selling While You're Burned Out Is a Fire-Sale

This is where timing matters. If you're sitting at a place where you think, "Man, if I just had a couple unlocks, I could get the value of my practice or my group to the next level," then selling now is fire-selling at the worst time.

I think we can all agree that someone who feels burnt out, overwhelmed, and a little bit helpless isn't going to be negotiating from the strongest point. I see it too often.

So what if you got those unlocks first? Get the burnout under control, get your cash flow right-sized, and grow the value and equity of your practice.

Then, when you're in a place of confidence and growth, you can say, "Okay, it's time for me to take some capital off the table," and look at a DSO option from a place of strength.

Option 3: A Virtual DSO

DEO is the coaching and training community I lead for dental practice owners. When I saw that the main issue was talent, we asked a question: what if you had all the resources and capabilities you needed to get to the next level? I mean an entire platform of executives, similar to what a billion-dollar DSO would have, instead of one consultant. And you wouldn't give up equity or control.

That's what I call a virtual DSO. You keep control, and you decide every month which resources you need.

Maybe it's finance help first. Once that's solved, you turn it off and now you need marketing help, then operational help. Maybe it's time to expand and you need help finding that next location. That's really how it happens inside a dental practice.

We also help you design the business around what you want. If you want ongoing cash flow and to systemize what you have now, we help you build that. If you want to expand and get more profit to the bottom line by adding more doctors or more locations, we help you scale that.

How the DEO Platform Works

There are a few ways in:

• The DEO App: access to our Cost Savings Club, where we've negotiated vendor pricing using the $3.5 billion in revenue we coach every week, plus our playbooks, weekly trainings, and 700+ active member owners to talk to
• Core premium membership: a weekly meeting with a strategic coach, expert calls with any of our 60 coaches, and live events where you network with owners who've scaled to where you want to go
• Fractional services: for owners who want hands-on help right away, including bookkeeping, on-site operational scaling, recruiting, collections, and HR help

Over the years, we've coached more than 1,000 dental practice owners, and more than 700 are active members today.

What to Do This Week

Ask yourself one honest question: if you sold today, would it be because the timing is right, or because you're burned out and out of answers?

Then write down the one or two unlocks that would change your practice the most right now. Office manager turnover, an underperforming location, cash flow that isn't working. That list tells you whether you're ready to sell or ready to grow first.

Frequently Asked Questions

Why do most dental practice owners sell to a DSO?

In my experience, it's mostly burnout, not private equity money. Owners need talent help and can't figure out how to solve the problems anymore, whether that's office manager turnover, underperforming locations, regional leadership, marketing, or cash flow.

Is selling to a DSO a bad idea?

No. I'm not anti-DSO, and the best ones bring a strong team, strong processes, good technology, insurance negotiation, and help with banks and cash flow. The risk is timing and fit. Selling while you're burned out is a fire-sale, and a wrong-fit DSO can leave you with less control and less money than you hoped.

When is the best time to sell a dental practice to a DSO?

When you're in a place of confidence and growth. If a couple of unlocks would take the value of your practice to the next level, get those first, then sell from a place of strength.

What is a virtual DSO?

It's how I describe DEO. You get access to the kind of executive team and resources a large DSO would have, including coaching, vendor pricing, and fractional services, while keeping your equity and control. You choose which resources you need each month.

Ready to Explore the Third Option?

If you feel stuck between grinding it out on your own and selling to a DSO, you don't have to pick either one today. Schedule a Growth Accelerator Call with our team and see if DEO is the right fit, so you can grow the value of your practice and keep control while you do it.

Adapted from Emmet's YouTube video, Dental Practice Owners: If Scaling is Hard, You Have 3 Options.

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