{"id":174,"date":"2026-07-29T05:17:16","date_gmt":"2026-07-29T05:17:16","guid":{"rendered":"https:\/\/dentaltransitions.com\/articles\/dental-practice-succession-plan-examples\/"},"modified":"2026-07-29T05:17:16","modified_gmt":"2026-07-29T05:17:16","slug":"dental-practice-succession-plan-examples","status":"publish","type":"post","link":"https:\/\/dentaltransitions.com\/articles\/dental-practice-succession-plan-examples\/","title":{"rendered":"Dental Practice Succession Plan Examples: A Practical Guide"},"content":{"rendered":"<h2 id=\"key-takeaways\">Key Takeaways for Dental Succession Planning<\/h2>\n<ul>\n<li>A dental practice succession plan can be one of the most consequential financial decisions in a dentist\u2019s career, with outcomes that may differ by hundreds of thousands or even millions of dollars depending on structure and advisor quality.<\/li>\n<li>This guide outlines four real-world succession paths: associate buy-in, sale to an outside dentist, DSO affiliation, and hybrid partnership\/vest-out, each with realistic timelines, valuation methods, and key considerations for practices generating $1 million or more in annual revenue.<\/li>\n<li>Successful transitions usually start with a clear assessment of practice value, identification of likely buyers, and alignment of the transition with the owner\u2019s goals and preferred timeline.<\/li>\n<li>Creating competition among multiple qualified buyers through a structured process can be one of the most reliable ways to increase sale price and protect deal terms.<\/li>\n<li><a href=\"https:\/\/dentaltransitions.com\/contact-us\/\" target=\"_blank\"><strong>Determine which succession path best fits your practice with a free, confidential discovery call with McLerran &amp; Associates<\/strong><\/a>.<\/li>\n<\/ul>\n<h2>How Premier Dental Owners Can Frame Their Succession Options<\/h2>\n<p>Every succession plan starts with a clear view of what the practice may be worth, who the realistic buyers are, and what the owner wants from the transition. These three elements \u2013 value, buyer, and outcome \u2013 shape the four paths described in this guide.<\/p>\n<p>McLerran &amp; Associates structures each engagement around a four-part journey: <strong>Understand Your Options \u2192 Create Competition \u2192 Find the Right Fit \u2192 Maximize Your Outcome.<\/strong> That sequence matters because owners who move directly to a single buyer, especially one DSO that approached them unsolicited, often negotiate from a significant information disadvantage. <a href=\"https:\/\/privatepracticeresearch.org\/reports\/baseline-2026\" target=\"_blank\" rel=\"noindex nofollow\">TUSK Practice Sales reports that clients who go through a marketed process with multiple buyer solicitation receive final transaction values averaging 50% above initial unsolicited offers.<\/a><\/p>\n<figure style=\"text-align: center;\"><img src=\"https:\/\/cdn.aigrowthmarketer.co\/1782231581955-2aa75d9d4697.jpeg\" alt=\"McLerran &amp; Associates team: McLerran is the nation&#039;s largest dental-specific sell-side M&amp;A advisory and brokerage firms\" style=\"max-height: 500px;\" loading=\"lazy\" decoding=\"async\"><figcaption><em>McLerran &amp; Associates team: McLerran is the nation&#039;s largest dental-specific sell-side M&amp;A advisory and brokerage firms<\/em><\/figcaption><\/figure>\n<p>The right path can depend on practice size, profitability, owner goals, and timing. Smaller premier practices in the $1\u20131.5 million revenue range often fit a doctor-to-doctor sale. Practices at $1.5 million and above can frequently access both private-buyer and DSO markets. The largest practices, particularly those with $3 million or more in revenue and multiple providers, tend to attract the strongest DSO interest and the highest EBITDA multiples. EBITDA, or earnings before interest, taxes, depreciation, and amortization, is the profitability metric institutional buyers often use to set enterprise value.<\/p>\n<p>With that context established, the next sections walk through each succession path in more detail.<\/p>\n<h2>Associate Buy-In Succession Plan Example for Internal Transitions<\/h2>\n<p>An associate buy-in is an internal succession where a dentist already working in the practice purchases equity over time and eventually reaches full ownership. This path can preserve culture, staff continuity, and patient relationships, but it usually requires the most lead time and careful structuring.<\/p>\n<p>Internal associate buy-ins often need substantial planning time. Dental practice owners typically <a href=\"https:\/\/eandassociates.com\/succession-options-for-dentists\" target=\"_blank\" rel=\"noindex nofollow\">begin succession preparation 3\u20135 years before their intended exit<\/a> so they have time for financial cleanup, associate development, and documentation.<\/p>\n<p>A representative 5-year staged structure might look like this:<\/p>\n<ul>\n<li><strong>Year 1:<\/strong> The associate purchases an initial minority interest, commonly 20%, at a price derived from a defensible, independent valuation. Solo dental practices are typically priced at 60\u201380% of annual collections when buyers underwrite on SDE, a method that adds back the owner\u2019s full compensation to estimate true earnings. The seller keeps majority ownership and management responsibility.<\/li>\n<li><strong>Years 2\u20133:<\/strong> The associate purchases an additional equity tranche and reaches a 50\/50 partnership. The seller begins reducing clinical days and gradually transfers management responsibilities and patient relationships.<\/li>\n<li><strong>Years 4\u20135:<\/strong> The associate purchases the remaining equity and reaches 100% ownership. The seller shifts to a consulting or mentoring role and may work reduced hours if desired.<\/li>\n<\/ul>\n<p>Financing for the later tranches often combines SBA bank financing with a seller note. A seller note is seller financing where the selling owner receives payments over time rather than a lump sum at closing. Seller financing is common in associate buy-ins, with the seller receiving monthly payments over several years.<\/p>\n<p>Contingency planning can be critical. A buy-sell agreement often serves as the cornerstone of succession planning, establishing who can purchase the interest, at what price, and under what triggering conditions, including death, disability, or voluntary departure. Without a buy-sell agreement, a breakdown in the associate relationship can leave the owner without a succession path and under time pressure to find an outside buyer.<\/p>\n<p>Staff and patient communication usually works best when handled jointly, with a clear timeline announced before closing. Key staff members often benefit from one-on-one conversations within the first 2 weeks of transition to reduce turnover risk. Industry data shows average patient attrition after a dental practice sale is less than 10% when transitions are properly managed, and internal transitions, where patients already know the incoming dentist, tend to sit at the lower end of that range.<\/p>\n<h2>Sale to an Outside Dentist: 24-Month Preparation Checklist<\/h2>\n<p>A doctor-to-doctor sale to an outside buyer, meaning a dentist who is not currently working in the practice, is the path McLerran &amp; Associates has handled throughout its 35-year history. This approach often suits premier practices in the $1\u20131.5 million revenue range and can take two forms. One form is a walk-away sale, where the seller exits after a short 4\u20138 week work-back period. The other form is a partnership\/vest-out, where the seller transfers roughly 50% now and the buyer purchases the remainder over time.<\/p>\n<p>Preparation usually begins 18\u201324 months before the target listing date. A practical checklist often includes the following steps, which build on each other.<\/p>\n<ul>\n<li>Obtain a CPA-led, diligence-grade valuation that can stand up when a buyer\u2019s lender reviews the numbers.<\/li>\n<li>That valuation depends on clean financials, so compile 3 years of CPA-compiled, normalized profit-and-loss statements with all personal and non-recurring expenses identified and documented.<\/li>\n<li>Beyond the P&amp;L, buyers often verify operational metrics directly, so pull production reports and verify active patient count from practice management software, focusing on patients seen in the past 18 months with scheduled future appointments.<\/li>\n<li>Review the lease to confirm sufficient remaining term, since SBA lenders generally look for adequate remaining term or renewal options on dental practice leases.<\/li>\n<li>Address any equipment deficiencies, deferred maintenance, or compliance issues that a buyer\u2019s due diligence would likely flag.<\/li>\n<li>Reduce owner-production concentration where possible, because high reliance on the owner-dentist can lead to valuation adjustments.<\/li>\n<li>Document key operational systems and staff roles to show that the practice can function beyond the owner\u2019s personal presence.<\/li>\n<\/ul>\n<p>Valuation for a doctor-to-doctor sale often uses an SDE or collections-percentage methodology. <a href=\"https:\/\/privatepracticeresearch.org\/reports\/baseline-2026\" target=\"_blank\" rel=\"noindex nofollow\">General dental practices in private transactions often trade at 65\u201385% of annual collections<\/a>, although the specific figure can depend on profitability, payer mix, lease terms, and market conditions.<\/p>\n<p>Competitive tension can be a major factor in achieving at- or above-ask pricing. A seller who approaches only one buyer usually negotiates from weakness. McLerran\u2019s doctor-to-doctor process reaches thousands of pre-qualified private buyers through direct mail, geofencing, study-club relationships, and dental organization networks. This broader reach can create the competition that pushes price up and helps protect terms.<\/p>\n<p><a href=\"https:\/\/dentaltransitions.com\/contact-us\/\" target=\"_blank\"><strong>Discuss your practice\u2019s readiness for a doctor-to-doctor sale in a free, confidential consultation with McLerran &amp; Associates<\/strong><\/a>.<\/p>\n<h2>DSO Affiliation Succession Timeline for Larger Practices<\/h2>\n<p>A DSO, or Dental Service Organization, affiliation often fits practices where the economics have grown beyond what a single private buyer can typically finance, often at $1.5 million in revenue and above. DSO buyers usually value practices on a multiple of adjusted EBITDA, defined earlier, and normalize the owner\u2019s compensation to a market-rate replacement-doctor salary before calculating profitability. That normalization step can be where the valuation narrative is often won or lost.<\/p>\n<figure style=\"text-align: center;\"><img src=\"https:\/\/cdn.aigrowthmarketer.co\/1782231605342-03c5ed4725a3.jpeg\" alt=\"At McLerran &amp; Associates, every engagement is built on an ironclad, CPA-led EBITDA analysis and practice valuation.\" style=\"max-height: 500px;\" loading=\"lazy\" decoding=\"async\"><figcaption><em>At McLerran &amp; Associates, every engagement is built on an ironclad, CPA-led EBITDA analysis and practice valuation.<\/em><\/figcaption><\/figure>\n<p>A representative DSO affiliation timeline often looks like this:<\/p>\n<ol>\n<li><strong>Months 1\u20132 (Preparation):<\/strong> McLerran builds a CPA-led EBITDA analysis and unpacks every add-back, including personal expenses, above-market owner compensation, and one-time items, to estimate true, defensible profitability. A marketing deck and virtual data room are assembled.<\/li>\n<li><strong>Months 2\u20133 (Auction Process):<\/strong> McLerran runs a structured, 45\u201360 day competitive bid process among a vetted pool of DSO and private equity buyers. Poorly run DSOs are screened out before the process begins. The process often generates around 10 offers.<\/li>\n<li><strong>Months 3\u20134 (Finalist Meetings):<\/strong> The field narrows to the top 1\u20133 buyers. The owner participates in in-person dinners or headquarters visits. McLerran models each finalist\u2019s deal, including cash at close, equity structure, and earnout terms, so the owner can compare estimated after-tax proceeds instead of only headline numbers.<\/li>\n<li><strong>Months 4\u20139 (LOI to Close):<\/strong> <a href=\"https:\/\/ddsmatchsouth.com\/dsos-dental-practice-broker\" target=\"_blank\" rel=\"noindex nofollow\">Many DSO acquisitions take 90\u2013180 days from letter of intent to closing<\/a>. This period covers due diligence, legal preparation, financing, and credentialing. McLerran provides quality-of-earnings defense throughout and pushes back when buyers attempt to re-trade the agreed valuation.<\/li>\n<\/ol>\n<p>DSO deal structures typically include three components. The first is cash at close. Many DSO deals structure 60\u201380% of total consideration as cash paid at closing, which is usually the only guaranteed portion. The second is rollover equity, which is a percentage of proceeds reinvested in the DSO\u2019s parent company. This equity can create a \u201csecond bite of the apple\u201d when the platform recapitalizes or sells, but it often remains illiquid for years. The third is an earnout, which consists of contingent payments tied to post-closing performance targets, typically measured over 12\u201336 months. Rollover equity in DSO affiliations typically remains illiquid for 5\u20137 years until the platform\u2019s next liquidity event.<\/p>\n<p>McLerran negotiates earnout terms to be as non-punitive as possible, often pushing for linear, or pro-rata, payouts rather than cliff structures, locked expense allocations, and acceleration clauses if the DSO sells the practice during the earnout period.<\/p>\n<p>DSO acquisitions typically require the selling dentist to maintain a 3\u20135 year post-closing employment commitment. That commitment can be a meaningful lifestyle consideration that owners may want to weigh against the financial upside before signing a letter of intent.<\/p>\n<h2>Hybrid Partnership\/Vest-Out Structure Example for the \u201cMiddle Market\u201d Practice<\/h2>\n<p>The hybrid partnership\/vest-out structure sits between the doctor-to-doctor and DSO paths. This approach can be most relevant for practices in the $1.5\u20133 million revenue range, sometimes called the \u201cVenn diagram middle,\u201d where the practice is large enough to attract DSO interest but the owner may prefer partial liquidity now with continued upside instead of a full exit.<\/p>\n<p>A representative hybrid structure often follows this pattern:<\/p>\n<ul>\n<li><strong>Year 1:<\/strong> The owner sells approximately 50% of the practice to a private buyer or a smaller DSO or IDSO, meaning an Independent Dental Support Organization, partner. The owner receives partial cash at close and retains 50% equity. The owner continues practicing and participates in distributions from the retained stake.<\/li>\n<li><strong>Years 2\u20133:<\/strong> The practice grows under the partnership. The owner\u2019s retained equity can appreciate if the platform performs well.<\/li>\n<li><strong>Years 3\u20135:<\/strong> The buyer purchases the remaining equity, either at a pre-agreed formula or at a new valuation, and completes the full transition. The owner exits or shifts to a consulting role.<\/li>\n<\/ul>\n<p>This structure can deliver partial liquidity earlier than a full vest-out while preserving upside from practice growth. The trade-off is added complexity. The owner often needs to evaluate the partner\u2019s financial strength, governance rights, and track record as carefully as any investment. Rollover equity in DSO dental deals can convert seller proceeds into shares of the DSO parent, creating a potential \u201csecond bite\u201d opportunity upon DSO exit, although outcomes can range from 2x\u20135x returns in successful exits to write-downs or delayed liquidity.<\/p>\n<p>Because McLerran works both the private-buyer and DSO markets in roughly equal measure, it can produce a side-by-side valuation that quantifies the practice\u2019s worth under each scenario. Owners can then choose the hybrid path with more complete information rather than a guess.<\/p>\n<h2>How McLerran Creates Competition Among Qualified Buyers<\/h2>\n<p>Creating competition among multiple qualified buyers at the same time can be one of the most reliable ways to increase a practice\u2019s sale price. A seller who talks to only one DSO usually receives one offer, with limited competitive tension to push the price up and limited leverage to improve terms.<\/p>\n<p>McLerran runs a structured, auction-like process, typically over 45\u201360 days, among a vetted pool of well-qualified buyers. Poorly run DSOs are screened out before the process begins, so owners interact only with credible, well-backed buyers. The process often generates around 10 offers, which McLerran then models side by side so the owner can compare estimated after-tax proceeds across deal structures and time horizons.<\/p>\n<p>The results can be measurable. McLerran clients often receive around a 30% higher valuation than owners who sell on their own. <a href=\"https:\/\/privatepracticeresearch.org\/reports\/baseline-2026\" target=\"_blank\" rel=\"noindex nofollow\">FOCUS Investment Banking\u2019s 2026 analysis notes that the gap between the best and middle-tier offers on any given practice has never been wider<\/a>, which suggests that the difference between a one-buyer process and a competitive auction can be more consequential than in the past.<\/p>\n<p>This approach also helps explain why McLerran\u2019s transaction rate, roughly 85\u201390% of clients who engage the firm, compares favorably to an industry norm of 35\u201340%. A well-run competitive process can attract serious buyers, support defensible valuations, and give both parties more confidence to close.<\/p>\n<h2>Find the Right Buyer Fit for Your Dental Practice<\/h2>\n<p>Price is only one part of a transition decision. The highest bidder is not always the right buyer, and many practice owners place equal weight on protecting the staff and patients they have served for years.<\/p>\n<p>McLerran vets buyers on both financial and cultural dimensions. On the financial side, it evaluates DSO profitability, revenue growth, management team strength, and private equity backing. This step matters because as much as 40% of a DSO deal can be paid in equity, and that equity\u2019s value depends on the platform behind it. On the cultural side, McLerran assesses buyer strategy, post-close clinical autonomy, staff retention practices, and the experiences of dentists who have already sold to that buyer.<\/p>\n<figure style=\"text-align: center;\"><img src=\"https:\/\/cdn.aigrowthmarketer.co\/1782231776232-426cf610db07.jpeg\" alt=\"A chat at McLerran &amp; Associates: the dental-specific sell-side advisor and advocate for practice owners guides on how, when, and to whom to sell your practice.\" style=\"max-height: 500px;\" loading=\"lazy\" decoding=\"async\"><figcaption><em>A chat at McLerran &amp; Associates: the dental-specific sell-side advisor and advocate for practice owners guides on how, when, and to whom to sell your practice.<\/em><\/figcaption><\/figure>\n<p>For practices in the $1.5\u20133 million revenue range, the doctor-to-doctor versus DSO comparison can be genuinely close. A doctor-to-doctor sale often delivers a higher percentage of guaranteed cash at close and a shorter post-sale work commitment, usually 4\u20138 weeks, but may produce a lower headline valuation. A DSO affiliation can produce a higher enterprise value. <a href=\"https:\/\/privatepracticeresearch.org\/reports\/baseline-2026\" target=\"_blank\" rel=\"noindex nofollow\">A $2 million revenue practice with 20% EBITDA margins could transact at $2.4\u20132.8 million to a DSO buyer at 6\u20137x EBITDA, compared to $1.3\u20131.7 million at 65\u201385% of collections to a private buyer<\/a>. That higher value often comes with more complexity, more contingent value, and a longer post-sale commitment.<\/p>\n<p>Because McLerran works both paths in roughly equal measure, it has limited incentive to steer owners toward one or the other. Its role is to help find the buyer whose structure, strategy, and support model align with what the owner wants for the practice after stepping back.<\/p>\n<p><a href=\"https:\/\/dentaltransitions.com\/contact-us\/\" target=\"_blank\"><strong>Get a side-by-side valuation comparison for your practice in a free, confidential discovery call with McLerran &amp; Associates<\/strong><\/a>.<\/p>\n<h2>Maximize Your Financial Outcome from a Dental Practice Sale<\/h2>\n<p>Maximizing the outcome of a dental practice sale usually requires three elements working together: a valuation that can withstand scrutiny, a competitive process that creates real tension among buyers, and an advisor who defends the agreed value through closing.<\/p>\n<p>McLerran\u2019s CPA-led EBITDA analysis is diligence-grade work done up front. Every add-back is unpacked and every normalization documented so the numbers are less likely to be re-traded when a buyer\u2019s quality-of-earnings team reviews them. Dentists who wait too long to prepare for practice transitions can lose a meaningful portion of proceeds due to avoidable taxes or rushed deals, which a well-structured, advisor-led process is designed to reduce.<\/p>\n<p>McLerran also produces multi-year, multi-structure financial forecasting. These models estimate what each path might net the owner over 3, 5, 7, and 10 years, including conservative recapitalization assumptions and after-tax treatment. Much of a DSO deal is often treated at long-term capital gains rates rather than ordinary income, a distinction that can create a noticeable difference in net proceeds. <a href=\"https:\/\/privatepracticeresearch.org\/reports\/transition-decision-framework\" target=\"_blank\" rel=\"noindex nofollow\">Tax allocation between personal goodwill and covenants not to compete can materially affect after-tax realization; the same offer can produce a significant difference in net proceeds depending on allocation, which usually requires a CPA with dental transaction experience.<\/a><\/p>\n<p>The firm\u2019s track record reflects this approach, with roughly 2,000 successful practice sales, approximately $2 billion in closed transaction volume, and a transaction rate of roughly 85\u201390%, compared with an industry norm closer to 35\u201340%.<\/p>\n<h2>Sample Succession Plan Outline for Dental Practices<\/h2>\n<p>The following outline highlights core components of a well-structured dental practice succession plan. It serves as an educational framework and does not replace professional advisory guidance.<\/p>\n<ol>\n<li><strong>Define the \u201cWhy\u201d and Target Timeline<\/strong>. Identify the owner\u2019s goals, such as liquidity, legacy, reduced clinical hours, or full exit, and set a target transition year.<\/li>\n<li><strong>Obtain a Diligence-Grade Valuation<\/strong>. Arrange a CPA-led EBITDA analysis and, where appropriate, an SDE or collections-percentage valuation, depending on the likely buyer pool, and update annually if the timeline shifts.<\/li>\n<li><strong>Assess Both Transition Paths<\/strong>. Build a side-by-side comparison of doctor-to-doctor and DSO outcomes, including estimated after-tax proceeds over multiple time horizons.<\/li>\n<li><strong>Prepare the Practice Financially<\/strong>. Compile 3 years of normalized, CPA-compiled P&amp;L statements, remove personal expenses, and reduce owner-production concentration where possible.<\/li>\n<li><strong>Address Legal and Structural Foundations<\/strong>. Review or establish a buy-sell agreement, review the lease, inventory equipment, confirm corporate governance documents, and align disability and life insurance.<\/li>\n<li><strong>Develop a Provider Transition Plan<\/strong>. Plan a staged patient handoff for internal buy-ins, define the post-close employment period for DSO deals, and plan a 4\u20138 week work-back for walk-away sales.<\/li>\n<li><strong>Run a Competitive Buyer Process<\/strong>. Conduct a structured auction among vetted buyers, generate multiple offers at the same time, and avoid single-buyer exposure.<\/li>\n<li><strong>Negotiate LOI and Deal Structure<\/strong>. Clarify cash at close, equity type, such as joint-venture level versus holding-company level, earnout mechanics, and employment agreement terms.<\/li>\n<li><strong>Defend Through Diligence to Close<\/strong>. Provide quality-of-earnings defense, negotiate working capital true-up, and execute staff and patient communication plans.<\/li>\n<li><strong>Post-Close Integration<\/strong>. Monitor staff retention, follow through on patient communication, and track earnout performance and dispute resolution if needed.<\/li>\n<\/ol>\n<h2>Common Succession Planning Pitfalls and How Dentists Can Avoid Them<\/h2>\n<p>The most expensive mistakes in dental practice succession planning often cluster around three areas: weak valuations, lack of competitive tension, and buyer selection missteps.<\/p>\n<p><strong>Weak valuations.<\/strong> A \u201cfree\u201d valuation is often a quick estimate that becomes the anchor for the entire negotiation and is usually set by the buyer, not the seller. <a href=\"https:\/\/mrladvisorygroup.com\/post\/the-succession-plan-you-built-may-no-longer-fit-the-associate-you-have\" target=\"_blank\" rel=\"noindex nofollow\">A dental practice where the owner is the dominant producer with no documented succession path can carry a real valuation discount because buyers price transition risk directly into their offers.<\/a> A diligence-grade valuation done up front helps the seller control the narrative and can reduce re-trading.<\/p>\n<p><strong>Lack of competitive tension.<\/strong> <a href=\"https:\/\/ddsmatchsouth.com\/dsos-dental-practice-broker\" target=\"_blank\" rel=\"noindex nofollow\">A dentist negotiating directly with a single DSO is often outmatched on enterprise valuation, exposed to only one buyer, and lacks the competitive tension that can push the price up.<\/a> A structured auction process, even in a doctor-to-doctor sale, can be one of the most reliable mechanisms for achieving at- or above-ask pricing.<\/p>\n<p><strong>Wrong buyer choice.<\/strong> Common pitfalls in buyer selection include:<\/p>\n<ul>\n<li>Partnering with an undercapitalized DSO whose retained equity later loses value.<\/li>\n<li>Signing an earnout with cliff payouts, undefined overhead allocations, or revenue definitions that exclude new services. DSO earnout structures with these features are a leading source of post-sale litigation in dental transactions.<\/li>\n<li>Choosing a buyer who changes staff compensation, benefits, or scheduling systems in ways that drive staff and patient attrition. Replacing a single dental hygienist after acquisition can cost $15,000\u2013$25,000 when accounting for recruiting, onboarding, training, and lost production.<\/li>\n<li>Rushing the process due to burnout, health events, or financial pressure. Many dental practice transitions occur under urgency conditions, which can produce worse outcomes for owners who have not begun transition planning beforehand.<\/li>\n<\/ul>\n<h2>Frequently Asked Questions<\/h2>\n<h3>What timeline should I expect for each succession path?<\/h3>\n<p>Timelines vary meaningfully by path. An associate buy-in is usually the longest, often requiring 3\u20135 years from the start of the structured equity transfer to full ownership, and owners often begin identifying and developing the right associate 5\u20137 years before their target exit. A sale to an outside dentist typically requires 18\u201324 months of preparation before going to market, with the transaction itself closing in roughly 6\u20138 weeks once a qualified buyer is under contract. A DSO affiliation usually runs a 45\u201360 day competitive auction process, followed by 90\u2013180 days from letter of intent to closing for due diligence, legal preparation, and credentialing. A hybrid partnership\/vest-out typically spans 2\u20135 years for the full transition, depending on how the equity transfer is staged. In all cases, beginning the planning process earlier, ideally 5 or more years before the intended exit, can provide the most flexibility on terms, timeline, and buyer selection.<\/p>\n<h3>How do equity versus cash components compare across doctor-to-doctor and DSO deals?<\/h3>\n<p>Doctor-to-doctor sales typically deliver 80\u2013100% of the purchase price as guaranteed cash, often financed through SBA lending with a seller note covering a portion. DSO affiliations are structured differently. Cash at close commonly represents 60\u201380% of total deal value, with the remainder split between rollover equity, which is a stake in the DSO\u2019s parent company that usually remains illiquid for years, and an earnout, which consists of contingent payments tied to post-closing performance targets. The rollover equity component can generate a meaningful \u201csecond bite of the apple\u201d if the DSO performs well, but it carries real realization risk, and outcomes depend heavily on the DSO\u2019s financial health, management team, and exit timeline. McLerran models each deal structure over multiple time horizons so owners can compare estimated after-tax proceeds instead of only headline numbers. Equity held at the joint-venture level, with ongoing distributions, behaves differently from equity held at the holding-company level, which has no distributions but a higher potential ceiling, and understanding that distinction before signing a letter of intent can be essential.<\/p>\n<h3>How do I protect staff continuity and patient relationships during a transition?<\/h3>\n<p>Staff and patient continuity can directly affect practice value. Buyers often discount valuations when key clinical staff are likely to leave after ownership change, and patient attrition can accelerate when the hygiene team turns over. Practical protections include negotiating staff retention bonuses or escrow holdbacks into the purchase agreement, announcing the transition to staff in a joint meeting with the seller before closing, and maintaining operational continuity, including hours, insurance participation, and branding, for at least 3\u20136 months post-close. For patient communication, sending a transition letter with a photo of the new owner within 7\u201310 days of closing, followed by an email reminder, can reduce attrition. In DSO deals, the selling dentist\u2019s continued presence under a post-close employment agreement can itself act as a patient retention mechanism, since patients continue seeing the same doctor for years. Buyer selection also matters here, and McLerran vets buyers on post-close staff and patient practices as well as financial strength.<\/p>\n<h3>How should I compare doctor-to-doctor versus DSO paths for my practice?<\/h3>\n<p>The comparison often depends on practice size, profitability, owner goals, and the level of post-sale work commitment the owner is willing to accept. Practices in the $1\u20131.5 million revenue range often fit a doctor-to-doctor sale, which usually delivers a higher percentage of guaranteed cash at close and a much shorter post-sale work commitment, often 4\u20138 weeks. Practices at $1.5 million and above can frequently access both markets, and the DSO path can produce a higher enterprise value, particularly for practices with multiple providers, strong associate-driven production, and scalable systems. The most suitable path usually depends on the practice\u2019s specific numbers, the owner\u2019s goals, and the desired lifestyle after the transaction. Because McLerran works both markets in roughly equal measure, it can produce a side-by-side valuation that quantifies the practice\u2019s worth under each scenario, so owners choose with more complete information rather than a guess. That side-by-side comparison often serves as the starting point for each engagement.<\/p>\n<h2>Conclusion: Choosing a Succession Path for Your Dental Practice<\/h2>\n<p>A well-structured dental practice succession plan can protect legacy, support practice value, and help align the buyer with the owner\u2019s goals. The four paths described in this guide, associate buy-in, sale to an outside dentist, DSO affiliation, and hybrid partnership\/vest-out, each carry distinct timelines, valuation approaches, and trade-offs. The right path usually depends on the practice\u2019s size, profitability, and the owner\u2019s objectives. Across all four paths, early planning, diligence-grade valuation work, and a competitive, advisor-led process can be some of the main factors that influence the final outcome.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Explore real-world dental practice succession plan examples. McLerran helps premier practice owners maximize value across every transition path.<\/p>\n","protected":false},"author":1,"featured_media":173,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-174","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/posts\/174","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/comments?post=174"}],"version-history":[{"count":0,"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/posts\/174\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/media\/173"}],"wp:attachment":[{"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/media?parent=174"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/categories?post=174"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dentaltransitions.com\/articles\/wp-json\/wp\/v2\/tags?post=174"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}