The Dental Practice Sale

Hosted by A Practice Orbit Podcast

Business Management Education

Website RSS feed

Episodes

Latest episode

Nov 2025

Language

About the show

Dentistry, as a business, is in a period of flux today. Retiring dentists want to maximize the sale value and aren't sure where to find a strong buyer. Mid-career dentists want to grow beyond the traditional single office practice. Associates seeking financial predictability aren't sure if private practice will provide it. And Institutional dentistry (DSOs, DPOs) are driving up valuations, but often with complex deal terms. Amid this landscape, the Dental Practice Sale podcast is intended to provide it's listeners with (1) education and seller stories and (2) insights into how the www.practiceorbit.com platform can help these various parties operate more effectively together in it's online marketplace.

Listen to episodes

44 recent

November 24, 20251 hr 15 min

43: Finding the Right Dental Practice with Chris Marshall

In this episode of the Dental Boardroom Podcast, host Wes Read, CPA and financial advisor at Practice CFO, and Chris Marshall break down some of the most important warning signs dentists should watch out for when evaluating a dental practice for purchase. Drawing from real client cases and common deal-flow patterns, they discuss the financial, operational, and clinical red flags that often hide beneath the surface of seemingly attractive listings.Listeners will learn how to interpret declining numbers, inconsistent hygiene schedules, sudden production increases, PPO manipulations, risky seller behaviors, and gaps in patient flow. By the end of the episode, you’ll understand how to look past broker language and identify the true health or weakness of a prospective practice.Key Takeaways1. Declining Production or Collections Are a Major Red FlagIf collections or production drop year-over-year even slightly it signals deeper issues. This could mean a declining patient base, ineffective ownership, poor systems, lack of demand, or mismanagement.2. Hygiene Department Instability Signals Deeper ProblemsLarge swings in hygiene revenueInconsistent recall schedulesDeclining hygiene visitsThese typically indicate poor systems, weak re-care, or a lack of organization affecting long-term revenue.3. Sudden, Unexplained Production Increases Are Often ArtificialA seller spiking numbers in the year before the sale is a common tactic. Examples include:Over-treatmentRunning unnecessary proceduresPre-billing treatment A buyer should be cautious: inflated numbers ≠ sustainable revenue.4. PPO / Insurance Manipulation Is a Growing ConcernPractices sometimes:Drop PPOs before sellingSwitch PPO participationAdjust fee schedules to appear more profitable Understanding the insurance environment is essential to projecting true cash flow.5. Seller Behavior Tells You Almost EverythingPay attention if the seller:Wants to leave immediatelyAvoids answering questionsHas incomplete recordsShows disorganized systems These behaviors often align with financial or operational decline.

May 6, 20251 hr 0 min

EBITDA: Everything You Need to Know About It

In this episode, Wes Read, CPA and founder of PracticeCFO dives into one of the most important financial terms in dentistry: EBITDA. Whether you're planning to sell your practice or simply want to manage it better, understanding EBITDA is essential. Wes explains what it is, how to interpret it from your P&L, and why every dental professional—owner or associate—should know the business side of dentistry.This episode is designed to help you start thinking like a CEO of your dental practice. Because yes, it’s a practice—but it’s also a business, with payroll, debt, taxes, benefits, and financial planning responsibilities.Key PointsEBITDA is a key financial metric every dental practice owner should understand.Even associates benefit from learning the business side of dentistry.Your dental practice operates like any other business—complete with payroll, taxes, and budgets.Understanding financials helps you become an effective CEO of your practice.Unlike large corporations, dentists provide services (not products), but the financial principles still apply.#DentalBusiness #DentalPracticeManagement #EBITDA #DentalFinance #DentistryPodcast #DentalCEO #DentalAssociates #PracticeOwnership #DentalEntrepreneur #FinancialLiteracy #P&LExplained #BusinessOfDentistry

April 17, 202554 min

41: Your Practice in Numbers: Mastering the Profit & Loss Statement

In this episode with Wes Read, CPA and founder of PracticeCFO, we explore a topic that is absolutely foundational to the financial success of your dental practice—your financial statements. Host [Your Name] (or "I") breaks down the importance of understanding your Profit & Loss Statement (P&L) and how it reflects the economic health of your practice.Whether you’re preparing to sell your dental practice or simply want to make smarter financial decisions, this episode will help you interpret your numbers and transform your P&L into a powerful decision-making tool.Key Points:Financial statements are your practice’s financial X-rays. They tell the story of all your effort.P&L (Profit & Loss) shows income and expenses; it's key to understanding your monthly performance.Balance Sheet shows assets and liabilities—important, but covered in a future episode.Your P&L should be reviewed monthly—ideally by the 15th–20th of the following month.Understand Net Operating Income: what's left after operational costs but before debt, taxes, and personal draw.A well-structured P&L is essential whether you're managing or selling your practice.Tools like QuickBooks Online and REACH Reporting can improve report clarity and benchmarking.#DentalPodcast #DentalFinance #DentalPracticeManagement #ProfitAndLoss #PracticeCFO #DentalBusiness #DentalAccounting #DentalSale #PlandL #BalanceSheet #DentalOwners #FinancialFreedomDentist #DentistLife #SellYourPractice #DentalConsulting

April 10, 202531 min

40: Top 10 Mistakes When Selling Your Dental Practice

Selling a dental practice is one of the biggest financial decisions in a dentist’s life—and it’s easy to make costly mistakes. In this episode, Brian Hanks sits down with Wes Read, CPA and founder of PracticeCFO, to break down the top 5 most common mistakes dentists make when selling their practice. From bad timing to poor team assembly, Wes and Brian share the insights every seller needs to avoid leaving money (and sanity) on the table.Key Points:Why selling too late can hurt your practice valueThe hidden danger of “just listing with your CPA”What happens when your staff finds out too soonWhy selling to the first buyer is often a trapHow working without a strong team can sabotage your deal#PracticeSale #SellYourPractice #DentalBroker #DentalCPA #DentalFinance #PracticeCFO

April 3, 202555 min

Credit Score: What Dentists Need to Know

Your credit score may not seem like a daily concern, but as a dentist, managing debt is an unavoidable reality. Whether it's student loans, a practice acquisition, or buying a home, your credit score can be the deciding factor in securing favorable loan terms. In this episode, we break down the essentials of credit scores, how they impact your financial future, and key strategies to improve and maintain a strong score. Learn why debt, when used correctly, can be a powerful tool for financial growth and how to leverage it wisely.Key Points Covered:✅ Why credit scores matter for dentists and practice owners✅ The role of debt in wealth accumulation and financial leverage✅ Common misconceptions about credit and debt management✅ The five key factors that determine your credit score✅ How to strategically use debt to build wealth and avoid financial pitfalls✅ Why leveraging assets like a dental practice can create long-term financial success✅ Practical steps to improve your credit score and increase lending opportunitiesResources & Links:💡 Learn more about financial planning for dentists at PracticeCFO.com💡 Check your credit score and track your financial health with AnnualCreditReport.com#DentalFinance #CreditScore #DebtManagement #DentalPractice #FinancialFreedom #WealthBuilding #DentistLife #PracticeOwnership #SmartInvesting #FinancialPlanning

January 21, 202555 min

Profit Allocation Models for Dental Partnership

Podcast Summary:In this episode, we delve into one of the most critical aspects of running a successful dental partnership: profit allocation. Drawing parallels between marriage dynamics and business partnerships, we explore three core models for distributing profits among dental practice owners. These models — the 50/50 Model, Associate-Owner Model, and Full Allocation Model — are unpacked to help you determine the best approach for your practice. Whether you're a seasoned dentist or exploring partnerships for the first time, this episode provides valuable insights into structuring financial success in your dental business.Key Points:Importance of Profit Allocation in Dental Partnerships:Financial arrangements impact business success and partner relationships.Three Models for Profit Allocation:50/50 Model: Equal distribution of profits, simple but less flexible.Associate-Owner Model: Combines individual production rewards with shared profits.Full Allocation Model: "Eat What You Kill" approach; rewards are based solely on individual contributions.Factors Influencing the Right Model:Production levels, time commitment, and practice type.Balancing fairness with incentivizing productivity.Practice CFO's Expertise:Years of experience guiding dental partnerships.Customized solutions tailored to practice-specific dynamics.Special Considerations:Family practices often favor the 50/50 Model.Adjustments for specialists or varying partner roles.The Importance of Financial Reserves:Maintaining at least one month’s expenses in working capital.Exploring Practice Orbit:Innovative platform for buying and selling dental practices.#DentalPartnerships #ProfitAllocation #DentalCPA #PracticeManagement #BusinessStrategies #EatWhatYouKill #AssociateOwnerModel #DentalBusiness #PracticeOrbit #DentistryInsights

January 7, 202538 min

Dental Partnership Legal Structure

Summary:In this episode, we explore the financial and legal intricacies of dental partnerships. Learn about the pros and cons of various legal structures, including S corporations and partnerships, and why selecting the right setup is crucial for tax efficiency and liability protection. Our host also shares tips on payroll, 401(k) planning, and navigating IRS requirements. Plus, discover how PracticeOrbit.com simplifies dental practice sales and connects you with expert advisors.Key Points:Importance of tailored tax planning for dental practices.Understanding 401(k) plans and payroll management.Legal structures for dental partnerships: S corporations vs. partnerships.Why dentists should avoid C corporations due to double taxation.Role of the K-1 in S corporation tax filings and FICA tax savings.Legal setup advice: consulting dental-specialized attorneys.Selling a dental practice through PracticeOrbit.com.#DentalPartnerships #TaxPlanning #DentalPractice #SCorporation #PracticeOrbit #DentalBusiness #401kPlanning #TaxEfficiency #SmallBusinessTips #FinancialFreedom

December 17, 202416 min

The Affect of Delta Premier on Dental Practice Valuations

**If you are a Delta Premier provider and receive Delta Premier reimbursement rates, congratulations! ** You’re a seasoned dental practitioner who has been around a while! For those who might not know, Delta Premier is a grandfathered level of billing which Delta no longer offers to new dentists or to new owners of dental practices. The current top level of Delta billing, at least for those without Premier status, is Delta PPO.So, what happens if you’re a Delta Premier provider and are considering the sale of your dental practice? Does it affect your value? And, if so, how?The short answer is that it most likely will negatively affect the value. Let’s dig a little deeper.Let’s first note that if you are a buyer considering the purchase of a dental practice where the dentist is a Delta Premier provider, then you should take great care in understanding the financial impact to you after you become the owner. I am aware of a practice that was purchased for nearly $2,000,000 which went bankrupt in just over a year because of this issue. Buyer beware! It sounds ominous, but it’s not that bad if you understand it and plan for it. To really explain the effect of Delta Premier on practice value, we’ll look at it from the seller’s perspective.The heart of the issue is that Delta Premier rates of reimbursement will be reduced to Delta PPO rates of reimbursement when the new dentist gets credentialed. As sellers, you can expect savvy brokers, bankers, and buyers to estimate this reduction and subtract it from your collections. As we know, collections play a major role in the net operating income (NOI) of the dental practice. In other words, the higher the collections, the higher the NOI and the higher the practice value. The same is true when collections move the other way. In the case of Delta Premier rates, practices that have a heavy premier patient base will see higher offsets to their collections. That being said, calculating this reduction can be tedious and challenging. A listing broker should do their best to estimate this reduction; ultimately, however, the responsibility falls upon the buyer and the buyer’s consultants to determine the true effect of Premier billing. A rough estimate to calculate the premier reduction is to assume that 15% of the total collections come from Delta. Of those collections, 30% are rated as premier, so the math looks like this:Total Collections x 15% x 30% = Delta Premier ReductionIn the case of a practice collecting $1,000,000 and using this formula, the reduction would be $45,000. However, it would not be accurate to say that the value of the dental practice was reduced by $45,000. Reducing the collections and the NOI by $45,000 could mean $100,000 swing in value to the banks based on their underwriting standards.Of course, the formula above is just an estimate. A seller can show that the reduction might be negligible. For example, they might be able to prove that only 20 of 2,000 patients are rated as Delta Premier in their practice. In this case, the broker might not make a reduction and would just disclose in their marketing materials that the seller is a Delta Premier provider but that premier accounted for 1% or less of total collections.To sum up, both buyers and sellers should take time and care to understand the effect of Delta Premier billing on the value of a dental practice. Doing so will ensure a fair trade for both parties and protect against very unfortunate surprises.

November 26, 202420 min

What if my lease only has a few years left, can I still sell my dental practice?

Dealing with a short term lease in the sale of of a dental practice requires some extra effort, but it is not an insurmountable issue. The target for banks who are funding a loan for the buyer of the practice is at least 5 years of term on the lease, with many dental leaders requiring 10 years. The requirement from these lenders can be met by the current term (firm term) on the lease or a combination of the current term plus any lease options. The lender just wants to know that the buying dentist can remain int the same location during the term of the loan. They know that a displaced dentist may suffer a financial setback and, consequently, not be able to make his or her loan payments.Customarily, the lease assignment is handled by the attorney of the dentist buying the dental practice. This generally occurs simultaneously with the drafting of the purchase and sale agreement. The selling dentist will notify the landlord of the proposed sale and introduce the buyer and buyer's attorney to the landlord. The buyer's attorney will then work with the landlord to provide qualifying information about the buyer and coordinate the drafting of the assignment and as often is required, the personal guaranty. When the lease has less thank 5 years of current term, the buyers attorney will also negotiate a lease extension as part of the assignment is finalized, the buyer will not only take over the lease but will have enough extended lease term to satisfy the bank. This is why dental lenders will always want to review both the final purchase contract and final lease documents prior to the drafting loan documents and funding the loan.Should a dental broker be involved in this process? The short answer is sometimes. While dental attorneys are good at memorializing agreements, they may not be knowledgeable at negotiating market terms of the lease. What if the buying dentist could get concessions such as free rent or tenant improvements as part of the lease extension, or even a lower rate? A dental broker who negotiates leases and is in touch with the market conditions would know how to negotiate the best terms of the lease. But, introducing a broker to the process means that someone is going to have to pay a brokerage fee, and landlords generally don't like to pay brokerage fees when they already have a tenant. The reality is that the lease assignments are generally just headaches for the landlords because they are basically swapping one tenant for another and are likely not benefiting much financially. Because of this, lease assignment can take longer than expected as landlords often put them on the "back burner". On top of that, if a broker is introduced into the mix, the landlord may become even more reluctant to work through the process.To sum up, yes you can still sell you dental practice even with just a few months left on the lease. If you are going to sell you practice, I would not recommend extending your lease prior to the finding a buyer. Doing so means you could be liable for the lease payments over the entire new term. A better strategy is to find a dental buyer first and then have the attorneys negotiate an extension for the buyer. This will most likely to result in you, the seller being removed as a guarantor of the lease in the shortest amount of time.

November 19, 202428 min

Top 10 Deal Points in a Dental Purchase and Sale Agreement

Every dental office sale requires that dental buyers, dental sellers, and attorneys agree to several, major deal points within the asset purchase agreement. Keep in mind that these negotiated deal points come after both parties have agreed to price and timing, and, while most of them are typical in the business-selling world, some are specific to dentistry. Below are our top 10:1. Price AllocationThe buyer will most likely be purchasing the assets of the dental practice rather than the seller’s corporate stock (assuming seller is established as an S or C Corporation). For tax purposes, the purchase price of the practice will be broken down into categories including supplies, furniture & equipment, non-compete, personal goodwill and corporate goodwill. How the price is allocated to each of these categories impacts the taxes for the seller and the depreciation schedule (future taxes) for the buyer.As a general rule, approximately 75-85% will be allocated to goodwill, unless all of the equipment is brand new. Most buyers and sellers ask their accountants to provide and agree to the allocation.2. Account ReceivableBecause payment for work done by the seller prior to the sale will be received by the buyer, the parties must agree how this is to be treated. The easiest and cleanest way to do this is for the buyer to purchase the accounts receivable at the same time they purchase the practice. This is done at a discount using a sliding scale. For example, the buyer would pay 90% of A/R in the 0-30 day tranche, 80% of A/R in the 31-60 day tranche, etc. There are three reasons for the discount:The seller receives the money now rather than waiting.The buyer now assumes the risk of non paymentThe buyer will be paying staff in order to collect the funds.When purchasing the A/R, the calculation is customarily done one day prior to closing. If the buyer does not buy the A/R, the front desk will need to keep careful records of payments received, and buyer and seller will need to develop a method of depositing the seller’s money in the seller’s account. There is generally a 5% fee the seller pays the buyer for administering AR collections.3. Delta PremierDelta Dental has discontinued its Premier reimbursement rates for all new contracts. This means the buyer will only be able to receive Delta PPO rates, which are generally 25%-40% lower, depending on the sellers UCR schedule. If the seller is a Delta Premier provider, the buyer will most likely experience a reduction in collections for Delta patients (the difference between Premier and PPO fees). This is an important disclosure when buying and selling a practice and could make a significant impact on the value.4. Covenant Not to CompeteThe covenant not to compete ensures that the seller does not open a competing practice near the practice being sold. These covenants are usually for a specific period of time and specify a distance from the practice, 5 years and 15 miles for example. While these numbers are negotiable, the buyer should take great care in analyzing the impact of this covenant. This particular deal point should be addressed upfront on the letter of intent. Keep in mind that there is still some question as to the enforceability of this covenant in California.5. Non-solicitationSimilar to the non-compete covenant, the seller must covenant not to solicit the dentist’s office patients or staff from the practice being sold. Doing so would be detrimental to the buyer and the buyer’s success. When buying a practice, a buyer relies on the staff staying in place and all patients staying with the practice (except for those noted by the seller such as family and friends).6. Dental RetreatmentsRetreatments can be burdensome for a buyer. A clear understanding of how retreatments are to be handled post sale is...