When a DSO evaluates your practice, they don’t just glance at your collections and throw out a number. Behind every offer is a structured, methodical checklist. It’s rarely shared with sellers, but it determines everything about the offer you receive.

Most dentists never see this checklist. They assume that high revenue or a strong reputation is enough. But inside the DSO deal room, there is a clear set of criteria that shapes valuation, structure, and how aggressively buyers compete for your practice. If you understand this checklist before you sell, you can position your practice to check more boxes and command a premium.

The first item on the unspoken checklist is profitability.

Not gross revenue, but EBITDA—earnings before interest, taxes, depreciation, and amortization. DSOs pay multiples of EBITDA, not collections.

They look closely at the quality of those earnings. Are they sustainable after the selling doctor steps back? Are they built on repeatable systems or one individual’s personal hustle? If profitability depends entirely on the owner’s presence, DSOs apply discounts. If profitability is embedded in strong systems, reliable hygiene production, and team performance, DSOs apply higher multiples.

Two practices can both collect three million dollars. One produces one million in EBITDA with clean systems. The other produces half that with bloated overhead and inconsistent operations. The difference in valuation can be millions.

The second item is operational structure.

DSOs want businesses that run like businesses. They assess how the practice functions day to day. Are there documented systems for scheduling, billing, patient flow, and financial controls? Is leadership distributed or concentrated entirely in the doctor’s hands?

A practice with clear protocols, stable management, and scalable systems is far less risky to acquire. DSOs pay more for reduced risk. A well-run operation signals to buyers that performance will continue post-sale. A practice that runs on improvisation or owner micromanagement raises red flags.

The third item is hygiene and patient retention.

Hygiene is the backbone of recurring revenue. DSOs study hygiene production as a percentage of total revenue. They look at recall effectiveness, reactivation systems, and patient retention rates.

A robust hygiene department signals predictable, sustainable revenue. It feeds restorative work and keeps patients loyal. Weak hygiene numbers suggest missed opportunities and revenue volatility. Practices with strong hygiene programs consistently receive higher valuations because they represent stable cash flow.

The fourth item is staffing.

DSOs examine turnover, tenure, and team structure. A stable, experienced team is invaluable. It ensures continuity after the sale, protects patient relationships, and reduces operational risk.

High turnover or reliance on temporary staff raises concerns. Buyers know that losing key team members after closing can erode revenue quickly. Practices with strong, loyal teams are more attractive and command better offers.

The fifth item on the checklist is growth potential.

DSOs pay a premium for practices with room to expand. They look for unused operatories, extended hours opportunities, underutilized hygiene capacity, or services that could be added.

If your practice is profitable and has clear, tangible growth levers, DSOs see upside. That upside often translates into higher multiples because buyers know they can increase returns post-acquisition without starting from scratch.

The final item is cultural and strategic fit.

Not every practice fits every DSO. Buyers assess whether your philosophy, brand, and operational style align with theirs. A good fit reduces friction during integration and supports long-term performance.

Sometimes two DSOs will look at the same practice. One will see a perfect strategic match and offer aggressively. The other will see a cultural mismatch and pass. Understanding which buyers are the best fit allows you to attract the right offers, not just any offer.

This unspoken checklist is the real decision framework.

It determines how buyers value your practice, how many compete for it, and how strong their offers are. Most dentists don’t know it exists. They assume revenue alone drives value. That assumption is costing practice owners millions every year.

If your practice checks most of these boxes, DSOs will compete. Competition drives multiples up. If your practice leaves gaps, buyers discount. The checklist is not subjective. It’s how sophisticated buyers reduce risk and identify where they’re willing to pay a premium.

The good news is that this checklist is not static.

Most of these factors can be improved with strategic preparation 12 to 24 months before selling. Hygiene systems can be strengthened. Operations can be documented. Teams can be stabilized. Growth opportunities can be developed.

I have seen practices increase their valuation by millions by deliberately aligning their operations with what DSOs value most. They didn’t just grow collections. They positioned themselves as the kind of practice that sits at the top of a buyer’s checklist.

I’ve been directly involved in over two hundred million dollars in dental practice transactions and indirectly involved in over two hundred million more. I’ve seen this checklist used again and again. Practices that understand it and prepare strategically consistently receive the strongest offers. Practices that don’t often leave money on the table without even realizing it.

If your practice is generating more than one million dollars in revenue, now is the time to see how you measure up. My team and I offer a comprehensive appraisal and positioning report, valued at $2,743, at no cost to qualified practice owners. This analysis reveals how your practice stacks up against the DSO checklist and where strategic improvements can make the biggest impact.

DSOs already have their checklist. The question is whether your practice is ready to meet it.

To your unstoppable success,
Your Team at Everything DSO