practice transition
CHOOSING A BUYER Should I sell my practice to a corporate group or an individual ?
by Frank Brown
You ’ ve made the decision to sell your dental practice . Now , you ’ re considering the type of buyer who would be best suited to purchase your practice . In today ’ s market , you have two primary choices : sell to another dentist or sell to a corporate group ( Dental Service Organization or DSO ). Depending on your own personal situation and expectations , either choice could be appropriate . However , there are pros and cons associated with both types of buyers , which is why it is important to understand the differences . When considering the ideal buyer and transition strategy for your practice , start by considering the following questions :
Following the sale , do I want to retire immediately from practicing dentistry ?
If your preference is to continue practicing for a few years , selling to a DSO may be a good option . This option is best for practice owners who are more hands-off and allow the staff to run the office or for those who are burned out from managing the practice but still enjoy practicing dentistry . If there is sufficient production in the practice to allow for both the buyer and seller to work , and if the schedule and facility permit both parties to work simultaneously , selling to another dentist with the stipulation of working for the buyer after the closing , can also be feasible .
Typically , DSOs require the seller to work back for a minimum of two years after closing . When selling to another dentist , the work back arrangement can be as short as a few weeks or could last for years .
Will I enjoy working for someone else during an extended transition period ?
As you consider working for the buyer after closing , you should understand that you are no longer the boss . If your management style has been very hands-on and you are very particular about running the office , you should understand that there could be drastic changes . Additionally , the buyer ’ s treatment philosophy may conflict with your own . Any differences between you and the buyer can cause tension and make working in the practice unenjoyable .
Your compensation will also change as you work back . A DSO will generally pay associate dentists in the range of 25 % to 30 % of collections , while individual doctors who purchase a practice typically pay the seller 30 % to 35 % of collections .
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