Dear Reader,
Let’s be honest: the thought of negotiating a deal with a DSO can make even the most seasoned clinician sweat. You’ve built a successful practice, maybe over decades. And now, you’re considering selling part—or all—of what you’ve created. The stakes couldn’t be higher. The good news? With the right strategy, you can secure a deal that doesn’t just fill your bank account but aligns with your personal and professional goals. Let’s walk through how to do it right.
Tip #1: Know Your Numbers Cold
You wouldn’t advise a patient to accept treatment without a thorough diagnosis, right? Negotiating your DSO deal works the same way. Before entering any discussions, you need to know exactly what your practice is worth. DSOs use EBITDA (earnings before interest, taxes, depreciation, and amortization) to value practices, often offering 3-7 times your annual profit. The higher your EBITDA, the better your offer will be. Analyze every revenue stream, expense, and potential growth area. This is your leverage.
Tip #2: Understand What You Want—And What You Don’t
It’s tempting to think that “more money” is the only goal. But let’s dig deeper. What do you really want? Clinical autonomy? The ability to continue practicing on your terms? Profit-sharing options? Maybe you want out entirely, but with a smooth exit strategy that ensures your staff and patients are well taken care of. Be crystal clear on your goals before sitting at the table. The last thing you want is to leave money on the table—or worse, walk into a future you didn’t anticipate.
Tip #3: Don’t Be Afraid to Walk Away
Here’s the hard truth: not every DSO deal is a fit. Some DSOs want complete control from day one. Others offer flexible arrangements that align with your goals. If you feel backed into a corner or pressured to accept terms you don’t like, be willing to walk. Nothing strengthens your negotiating position more than a willingness to say “no.” You hold the valuable asset—your practice. The right partner will work with you, not against you.
Tip #4: Negotiate Employment Terms Upfront
If you plan to continue practicing post-sale, your employment terms matter—immensely. I’ve seen dentists blindsided when their agreed-upon terms weren’t documented, leaving them stuck in roles they didn’t want. Spell out every detail: hours worked, clinical freedom, bonus structures, and even exit clauses. Make sure both parties understand what happens if the relationship doesn’t work out.
Tip #5: Push for Equity Options
Want to maximize long-term wealth? Retaining equity in your practice post-sale can be a game-changer. Many DSOs will offer an opportunity for you to hold a stake, allowing you to share in future profits. This isn’t charity—it’s strategic. You have a vested interest in seeing the practice grow, and the DSO knows it. Insist on an equity stake that aligns with your commitment level.
Tip #6: Protect Your Legacy
Your practice is more than numbers on a spreadsheet; it’s a living, breathing entity shaped by your hard work. Ensure that the transition aligns with your values. If patient care quality or staff treatment is non-negotiable for you, make it part of the deal. Ask how the DSO plans to handle staff integration, patient communication, and operational changes. Negotiate these terms upfront so you’re not left scrambling later.
Tip #7: Leverage Expert Guidance
You wouldn’t let a patient self-diagnose, so don’t go into this negotiation solo. A skilled consultant or attorney with DSO experience is worth their weight in gold. They’ll spot red flags, identify hidden value, and ensure you’re protected. This isn’t just a deal; it’s a life-changing decision. Treat it with the gravity it deserves.
Case in Point: A Real-Life Example
I once worked with Dr. Jones, who was ready to sell but wanted to retain some clinical autonomy and protect his staff. He received a strong initial offer but held firm on these key issues. After several rounds of negotiation—and a few strategic walkouts—we secured a deal that allowed him to practice three days a week with full autonomy, a lucrative bonus structure, and an equity stake in the growing DSO. Both sides walked away thrilled.
Final Thoughts
Negotiating a DSO deal is about more than money—it’s about ensuring your future aligns with your vision. Walk in with clarity, confidence, and a refusal to settle for less than you deserve. This is your legacy we’re talking about.
Ready to make it happen? Let’s talk strategy and lock in terms that leave you—and your practice—better than ever.
Sincerely,
Stan Kinder
and Your Team at Everything DSO
