Doctors have multiple options to monetize all or part of their life’s work. Depending upon the practice and the doctor’s goals, they may choose a doctor-to-doctor or doctor-to-associate transaction, a 100% sale to a DSO, or an Invisible Dental Support Organization (IDSO) partnership to monetize only part of the value of their practice. 

The length of time it takes to sell a dental practice, or alternatively find an IDSO partner for a partial sale, will be dictated by numerous factors. Some transactions can happen in as little as 90 days and others may take a year or more. 

Factors Affecting The Timeline of a Dental Practice Sale

The type of practice, size, geography, specialty, payer mix, number of doctors, age of doctors, growth rate and many other elements will impact value and the time frame. The advisor you choose will also have a significant impact on both the value realized and the timing. Quality advisors will help you complete a transaction at a higher value, faster, than attempting a transaction by yourself. 

Doctors are urged to understand all of their options including a 100% sale and the highest value option of a partial monetization through a partnership with an IDSO. 

One of the Most Important Drivers of Time to Sale: Your Choice of Advisor

Many doctors attempt to sell all or part of their practice alone, without an advisor. Yes, you will pay an advisor a fee, but selling all or part of your life’s work is not something you should attempt as a “Do It Yourself” project! You are an expert at creating beautiful, healthy smiles. You are probably not an expert at high value, life-changing investment banking transactions. I would not try to straighten my kid’s teeth; I would use a specialist. You should too. 

A qualified advisor who is getting paid only by you (not by both you and the buyer) will earn their fee by marketing your practice broadly and should introduce you to multiple, qualified bidders. They will already know the 100% practice buyers or qualified IDSO partners for your great practice. A qualified, unconflicted advisor, dental broker or transition firm will reduce the time it takes to complete a transaction and achieve a higher value than you could by yourself. 

Doctor to Associate Sale

A doctor to an existing associate sale is probably the fastest transaction. Associates already understand your practice and its current and potential value. Associates will typically hire a mutually agreeable appraisal or valuation firm to determine the approximate practice value. This can be used as a guide for negotiations to reach an agreement on value and structure quickly. 

These transactions could take 60 days or less if the doctors choose the right legal advisors and are qualified to finance the transaction. 

Doctor-to-Doctor Sale or Doctor to a DSO Sale

Smart doctors will hire a qualified advisor to generate multiple bidders for the sale of their practice. Great practices will have many choices. Depending on a number of factors, the 100% sale of your practice to another doctor or a DSO should take six months or less.

IDSO Partnership; Sale of Part, But Not All of Your Practice

Thousands of doctors will sell 51% to 90% of their practice for cash now in an IDSO partnership in 2023. IDSOs become a doctor’s silent partner and provide support to reduce a doctor’s administrative headaches and the practice services to grow bigger, faster and more profitably. 

Doctors remain as owners for years or decades, leading their practice with their team, brand and strategy with full autonomy. The IDSO acts as a silent partner and does not attempt to micromanage or homogenize the practice to some corporate standard.

IDSOs offer the highest values, with some at over 400% of collections. However, not all practices will qualify for IDSO partnerships… as generally they will need to have $1.8 million in collections if a GP or $1.5 million or more if a Specialist. 

The doctor must also be committed to continue as an owner, leading their practice for at least three and preferably five or more years. The longer your practicing horizon, the more valuable your practice. Many doctors in their 30s are now quietly partnering with IDSOs which is impacting values of doctors 55+. Doctors of all ages are urged to understand the IDSO option as in most cases, transactions can take six months or less. 

Explore Your Dental Practice Options Today! Schedule a Call with LPS

Learn and compare your options for an exit, retirement, transition or IDSO partnership. Contact LPS to schedule a call with us to discuss your practice and learn what options will be available to you. We give doctors an estimate of how long a transaction will take for their specific practice.

Chip Fichtner