How to Sell a Dental Practice: 9 Steps From Planning to Closing

Selling your practice is one of those things most dentists only do once, which is exactly why it feels so foreign. You spent a career learning how to run a practice. Nobody taught you how to sell one.

The good news is that it isn't mysterious. The steps to selling a dental practice happen in roughly the same order every time, and most of the pain comes from skipping one or starting it too late. Below I'll walk you through how to sell a dental practice from the first "should I?" to the day you hand over the keys. I'll spend extra time on the back half (the offer, the letter of intent, due diligence and closing), because that's where deals actually get made or lost.

Step 1. Decide What You Want, and When

Before you call anyone, get clear on two things: when you want to be done, and what "done" means to you.

Some sellers want a clean exit. Sign, hand over the keys, go fishing. Others want to keep practicing a couple of days a week for a while, which changes who the right buyer is and how the deal gets written. Some are open to a DSO. Others would rather sell to a younger dentist who'll keep the practice's name and culture intact.

Then give yourself runway. Most advisors suggest starting 12 to 24 months before your target date, which is enough time to fix whatever a valuation turns up without feeling rushed. If you're still weighing the timing, our guide to the best time to sell a dental practice covers both the market and your own readiness.

Step 2. Put Your Team Together

You don't need an army, but you do need the right few people:

• A broker, unless you decide to sell it yourself (more on that in Step 5).
• An attorney who does dental deals. The purchase agreement, the lease assignment and the non-compete are all specialized. Legal fees typically run $4,000 to $10,000, depending on complexity. Our breakdown of what it costs to sell a dental practice covers every other fee too.
• A CPA. How the price gets split between equipment, goodwill and the non-compete decides your tax bill.
• A financial planner, so you know what the money needs to do after the sale.

And one call almost everybody forgets: your malpractice carrier. If your policy is claims-made, you'll likely need tail coverage once you stop practicing, and many carriers include it free for long-time policyholders who retire. Find out now, not after closing.

Step 3. Find Out What It's Worth

You can't sell what you haven't priced. Most general practices sold to another dentist land around 65 to 80 percent of a year's collections, and profit decides where in that range you fall. Price it too high and it sits, then sells for less than it would have. Price it too low and you leave money on the table. Our guide on how to value a dental practice walks through the actual math with a sample practice.

There's another reason to get this right: if your buyer uses an SBA loan, their lender is going to order its own appraisal anyway (more on that in Step 8). Your number has to hold up.

Step 4. Get the Practice Ready

This is where you close the gap between what your practice is worth today and what it could be worth. The things that matter most:

• Clean books. Three years of tax returns and P&L statements that tell the same story, with personal expenses taken out.
• A lease with five to ten years left, ideally with renewal options. Buyers and their lenders both look hard at it.
• Equipment that presents well. Fix the obvious stuff before a buyer puts it on a list.
• A stable team and a full hygiene schedule. Both tell a buyer the practice will keep running after you leave.
• Keep producing. Collections that dip while you're selling show up in the offers you get.

Our guide to preparing to sell a dental practice has the full checklist.

Step 5. Choose How You'll Sell

You've got three basic routes, and each one changes the rest of the process.

• With a broker. A broker markets the practice confidentially, screens buyers, manages the negotiation and keeps the deal on track. Most charge a commission at closing of 8 to 12 percent of the price. Ours is typically 4 to 7 percent, depending on the size of the practice. Here's how we help dentists sell a dental practice.
• By owner. You keep the commission and take on the work yourself. Our by-owner marketplace puts your listing in front of thousands of dentists, and every account starts with a 14-day free trial. Our guide on selling your practice by owner is honest about the tradeoffs.
• To a DSO. A different kind of buyer with different math, where the structure of the deal matters as much as the price. We break it down in selling your dental practice to a DSO.

Step 6. Market It Quietly

Confidentiality is everything at this stage. If your staff or patients hear you're selling before you're ready to tell them, you can lose people at the exact moment you need them most. Here's how it's usually handled:

• The listing describes the practice without naming it: the area, collections, operatories and patient count.
• Anyone who wants the details signs a non-disclosure agreement first.
• Buyers get screened before they see real numbers. Are they pre-qualified for financing? Do they actually want this kind of practice?
• Tours happen after hours or on a day you're closed.

Depending on your location, your price and how much demand there is for practices like yours, finding the right buyer can take anywhere from a few weeks to six months.

Step 7. Compare Offers and Sign a Letter of Intent

The highest number isn't always the best offer. When offers come in, look at the whole package: how much you get at closing, any seller financing or earnouts, how long the buyer wants you to stay, the non-compete, whether they're keeping your team, and whether their financing is real. Here's what that looks like in practice.

On paper, Offer A wins by $50,000. In real life, Offer B puts $100,000 more in your pocket at closing, lets you leave ten months sooner and comes from a buyer who can actually close. If a seller note is on the table, read up on seller financing first.

Once you pick a buyer, the terms go into a letter of intent (LOI). Most of it isn't binding, but a few parts usually are, like confidentiality and an exclusivity window where you agree not to shop the practice to anyone else. A good dental practice letter of intent covers:

Step 8. Get Through Due Diligence and the Purchase Agreement

Once the LOI is signed, the buyer, their lender and their advisors check everything you've told them. Due diligence usually takes 30 to 60 days, and it's where deals most often fall apart, usually because the numbers don't match what was presented, the lease turns out to be a problem, or something surprising turns up. Expect them to go through:

• Tax returns, P&L statements, and production and collections reports
• Active patient counts, payer mix and fee schedules
• Your lease, and whether the landlord will approve the transfer
• Your equipment list, with ages and service history
• Your staff roster, roles and pay
• Licenses, compliance records and any open claims

Two things should be moving at the same time. The buyer should start insurance credentialing right away, because credentials don't transfer with the practice and the process can take a few months. And your attorney should be negotiating the purchase agreement.

The purchase agreement is the binding contract. It replaces the LOI and spells out every detail: the representations you're making about the practice, what happens if one of them turns out to be wrong, the final non-compete, and how the price gets allocated among equipment, goodwill and the non-compete. That allocation matters more than most sellers realize, so read up on the tax consequences of selling a dental practice before you agree to one. Most dental practice sales are asset sales, by the way, meaning the buyer purchases the equipment, records and goodwill rather than your company itself.

On the non-compete, expect a few years and a radius that fits your market, often somewhere in the 5 to 15 mile range, tighter in a city and wider out in the country. Even states that restrict non-competes for employees generally allow them when a practice is sold, as long as the terms are reasonable.

That last rule catches a lot of sellers who planned to keep working a couple of days a week. It can still happen, it just has to be set up as a consulting arrangement, and your attorney and the buyer's lender should agree on how it's written before you sign anything.

Step 9. Close, Then Hand It Over

Closing day itself is mostly signatures and wire transfers: the purchase agreement, the bill of sale, the lease assignment and the non-compete get signed, and the buyer's loan funds. The real handoff starts the next morning.

Telling Your Team

Most sellers wait until the letter of intent is signed and due diligence is well underway, then tell the team shortly before closing, ideally with the buyer in the room. Jobs, schedules and pay are the first things they'll ask about, so have answers ready. In most sales your employees are technically let go by your company at closing and hired by the buyer's, so settle final paychecks and any accrued vacation the way your state requires.

Telling Your Patients

A letter from you introducing the new dentist, sent around closing, does more for patient retention than anything else you can do. Patients stay when the person they trust tells them it's okay. Their records stay with the practice, and your agreement should guarantee you access to them later if you ever need it.

Everyone Else on the List

Let your suppliers, the dental plans you participate in, your referring dentists, your malpractice carrier, the utilities and your landlord know about the change. And remember that your DEA registration doesn't transfer to the buyer. If controlled substances are changing hands, the DEA wants written notice at least 14 days ahead and an inventory on the day of the transfer.

The Transition

Plan on staying 30 to 90 days to introduce the buyer to patients and the team, and some deals go longer. Be available, be generous with introductions and honor your non-compete. The smoother the handoff, the more of your patients stay, and if any part of your price rides on a seller note or an earnout, those patients are protecting your money too.

Ready to Take the First Step?

Every sale starts with the number. Our free dental practice valuation gives you an estimate in minutes. If you'd like a broker in your corner for the rest, here's how we help dentists sell. And if you'd rather run the sale yourself, you can list it on our by-owner marketplace.