Best Practices for Preparing to Sell Your Dental Practice
Selling your dental practice is one of the most significant financial and professional decisions you will ever make. To maximize your practice’s value and ensure a smooth transition, careful preparation is essential.
Too often, practice owners wait until their numbers start to decline before considering a sale, but this can dramatically impact the final sale price. The practices that sell for top dollar are the ones that are well-maintained, financially strong, and properly positioned in the market.
Below are the best practices to follow when preparing to sell your dental practice.
1. Don’t Wait Until Your Numbers Decline
One of the most common mistakes dentists make is deciding to sell after production and revenue have already started to drop. Buyers prefer thriving practices with stable income, not ones facing patient loss or declining collections.
What to do instead:
Plan your exit strategy at least 1–3 years in advance.
Continue investing in patient retention and marketing.
Maintain production levels and avoid cutting back hours too soon.
2. Keep Your Financials in Order
Your practice’s financial performance is the single most important factor in determining value. Disorganized or incomplete records can raise red flags for buyers and lenders.
How to prepare:
Organize at least 3–5 years of tax returns, profit and loss statements, and balance sheets.
Ensure clean bookkeeping and separate business from personal expenses.
Avoid running personal costs through the practice so profitability is clear.
Work with a dental CPA to prepare accurate and buyer-ready financials.
3. Increase (or Maintain) Profitability
Buyers closely evaluate net income and profitability when valuing a dental practice. Maximizing efficiency and earnings before selling can significantly boost your practice’s worth.
How to improve practice value:
Optimize your fee schedule to align with industry standards.
Reduce unnecessary expenses and streamline overhead.
Expand high-demand, high-margin services (e.g., implants, clear aligners, specialty care).
Improve collections by reducing outstanding accounts receivable.
4. Evaluate and Secure Your Lease (or Property)
Your facility arrangements are a key part of the transition. Buyers need confidence that they can continue operations without disruption.
Steps to take:
Confirm whether your lease is assignable to a new owner.
If your lease is expiring soon, negotiate a renewal for stability.
If you own the property, decide whether to sell it with the practice or lease it to the buyer.
5. Retain Key Staff and Streamline Operations
Staff retention is one of the top concerns for buyers. A well-trained, long-standing team signals stability and reduces transition risk.
How to strengthen your team:
Retain key staff members by ensuring a positive work environment.
Avoid major staffing changes right before a sale.
Document systems, policies, and workflows so the buyer can step into a well-organized practice.
6. Ensure Your Equipment and Technology Are Market-Ready
While buyers don’t expect brand-new equipment, outdated or non-functional technology can lower your practice’s value.
How to prepare:
Confirm all equipment is in good working order before listing.
Consider upgrading outdated systems (digital X-rays, CBCT, or practice management software).
Provide a detailed inventory list of included equipment and technology.
7. Confidentiality Matters: Work With a Broker
Confidentiality is critical during a dental practice sale. If patients or staff learn about the sale too early, it can damage morale, relationships, and revenue.
How to protect confidentiality:
Work with a professional dental practice broker to market discreetly.
Require non-disclosure agreements (NDAs) from all buyers.
Pre-screen buyers to ensure they are financially qualified before sharing sensitive details.
8. Have a Transition Plan in Place
Most buyers prefer a smooth handoff period with the seller’s support. Planning this in advance ensures patient and staff confidence.
Consider the following:
Will you stay on for 3–6 months as an associate?
Do you prefer an immediate exit after closing?
Discuss transition terms early to align buyer and seller expectations.
9. Consult With Legal and Financial Advisors
Selling a dental practice involves complex contracts and tax implications. Professional guidance helps protect your interests and maximize net proceeds.
Work with:
A dental-specific attorney to review contracts.
A CPA experienced in dental practice sales to reduce tax liability.
A financial planner to secure your long-term financial future.
Final Thoughts
Selling your dental practice is a major milestone, and preparation is the key to success. By following these best practices, you can maximize your practice’s value and ensure a seamless transition for both you and the buyer.
