Selling a Dentistry Business

Most solo-owner general practices are priced off cash flow using an SDE multiple, since owner pay, benefits, and personal add-backs vary a lot. Larger practices with associates, strong hygiene, and manager depth may be viewed through EBITDA, especially for DSO buyers. Value usually swings with collections quality, hygiene recall strength, payer concentration, and how dependent the practice is on the selling doctor. For a starting point, use Rejigg’s free valuation calculator, then pressure-test it against your real collections and staffing coverage.

SBA 7(a) loans are common for dental practice purchases because they can finance goodwill, not just equipment. Lenders still want clean financial statements, consistent collections, and a transition plan that makes sense, especially if the seller produces most of the dentistry. Most buyers bring a down payment and finance the rest, sometimes with a seller note as part of the stack. Rejigg’s SBA loan calculator helps you model payments at current rates so you can sanity-check what buyers can actually afford.

Timing depends on preparation, the buyer type, and the lease. Many practices take a few months to get to a signed LOI; then it’s roughly 60–120 days for financing, diligence, lease assignment, and transition planning. The usual slow points are missing production-to-collections support, landlord consent delays, and lender underwriting. You can speed things up by building a buyer-ready data room and answering operational questions early. Rejigg’s data room and deal tracking keep diligence moving without documents getting lost in email.

You can sell without a broker, but you still need a real process: buyer sourcing, confidentiality, diligence, and offer comparison. Brokers often charge 5–10% for packaging and buyer access, which can be worth it in some situations and hard to justify in others. Rejigg gives owners the core infrastructure: pre-vetted buyers, digital NDAs, a secure data room, direct messaging, scheduling, and an offer dashboard. Start with the prepare-to-sell guide to see what buyers will ask for.

Buyers and lenders usually ask for three years of tax returns and financial statements, plus dentistry-specific reports: production and collections, AR aging, payer mix, procedure mix, provider production, and hygiene recall metrics. They’ll also want payroll summaries, equipment lists (owned vs leased), the lease and amendments, and operational items like HIPAA and OSHA routines. Most diligence questions come back to the schedule engine and the revenue cycle. Rejigg’s due diligence checklist pairs with the data room so you can share everything securely.

Common add-backs include personal expenses run through the practice (like vehicle, phone, and some travel), one-time legal or consulting bills, and non-recurring repairs. The biggest swing item is often owner compensation versus the cost to replace you with an associate, which can cut either direction depending on how you pay yourself. Add-backs need proof. If you can’t tie it to a receipt, a policy, or a clear one-time event, lenders may ignore it. Rejigg helps you organize support in the data room so buyers can validate add-backs quickly.

Either approach can work, and it often depends on your retirement plan and local real estate economics. Selling the building can attract buyers who want long-term site control. Keeping it can create steady income, but the lease has to be financeable, with enough term, reasonable options, and market rent. If rent is above market, buyers may reduce what they’ll pay for the practice because overhead will be inflated. Rejigg helps you present both paths clearly and keep lease and property documents organized in the data room.

Most small dental practice deals are asset sales. The buyer purchases equipment, charts, and goodwill, and leaves most historical liabilities behind. Entity or stock sales can be possible, but they raise extra diligence around unknown liabilities, payer contracts, and employment matters. The right structure depends on your entity type, state rules, and tax impact, so your CPA and attorney should model it. If you want the deal basics first, Rejigg’s negotiation guide explains how structure can change terms and price.

An earnout pays part of the price later based on post-close performance, often measured on collections over a set period. In a dental office, collections depend on staffing, schedules, fees, and payer participation, so earnouts can get tense if those inputs change after close. If you accept one, spell out the metric, define the reporting, and clarify how buyer-driven changes are handled. Rejigg’s deal tools let you compare cash-at-close, earnouts, and seller notes side-by-side so you can focus on risk, not the headline number.

Working capital is the cash buffer that keeps the practice running while money moves from procedures to deposits. In dentistry, the timing around payroll, supplies, lab bills, and insurance payments matters more than many owners expect. Some deals set a working-capital target, while others treat cash as retained by the seller and handle AR separately. The cleanest deals spell out who keeps cash, deposits in transit, AR, and unapplied credits, plus how the cutover works. Rejigg’s due diligence guide covers the common closing-day tripwires.

Many dental practice sales treat AR as kept by the seller, meaning you collect outstanding insurance and patient balances after closing while the buyer starts fresh. Some deals include AR, but buyers usually discount it based on age and collectability, so you need clean aging reports and a clear follow-up process. Also, clarify unapplied credits and prepayments so patients don’t get confused or double-billed. Rejigg’s data room helps you share AR aging and your AR policies under NDA while keeping patient financial info tightly controlled.

It depends on the payer, the buyer, and how the transaction is structured. Some PPO agreements are tied to the selling entity or the selling dentist’s credentialing, and others require new enrollment for the buyer and any associates. Delays can mean out-of-network periods or claim denials right after close, which can create cash flow stress. Build a payer-by-payer plan early and line it up with the closing timeline. Rejigg helps keep payer documents, deadlines, and the transition checklist organized in one place.

DSOs usually price off EBITDA and focus on whether collections can be maintained with associates, stable hygiene, and tight billing and scheduling systems. Individual dentists often think in SDE and lifestyle terms, including location, clinical mix, and how quickly they can step into the schedule. The difference can show up in structure, too, like employment agreements, retention bonuses, and longer transition expectations. Rejigg helps you reach both buyer types and compare offers apples-to-apples in the offer dashboard.

Transitions range from a few weeks to several months, and it depends on how much production is tied to the seller. If you do implants, molar endo, sedation, or carry most of the patient relationships, buyers often ask for a longer step-down to protect case completion and trust. If associates and hygiene carry the bulk of collections, the transition can be shorter and focused on introductions and staff stability. The smoothest transitions have a defined schedule, duties, and a case-in-progress plan. See Rejigg’s transitioning guide.

Most buyers require a non-compete tied to the practice’s goodwill, plus non-solicitation of patients and employees. What’s enforceable varies by state, and some healthcare-specific rules can narrow what’s allowed, so you’ll want your attorney to tailor it. From a practical standpoint, these terms shape what you can do next, including part-time work, consulting, or joining a nearby office. Make sure the radius and duration match your real post-sale plans. Rejigg keeps these negotiated terms visible alongside the rest of the deal points so they don’t drift late.

Cash flow drives most pricing, but equipment and leases matter when major replacements are near or when key assets are leased. Buyers want to see what’s owned versus financed, remaining lease terms, buyout amounts, and whether the equipment is mission-critical, like a compressor, suction, imaging, and sterilization. Older equipment doesn’t kill a deal by itself, but it can lead to credits or a lower price. Keep an equipment schedule with serial numbers, age, and service history. Rejigg’s data room makes it easy to share schedules and invoices securely.

Dentistry is less seasonal than many businesses, but timing still affects deal friction. Most of the time, you want clean trailing-12 collections, stable hygiene coverage, and no major disruptions like a remodel or a key staff departure mid-process. Buyers may also plan around school calendars, and lenders can slow down around holidays. The right time is when your numbers are easy to explain and your team is steady. Rejigg’s preparation guide helps you get there.

Confidentiality comes down to controlling access and staging disclosure. Share only high-level metrics at first, then release sensitive items like financials, the lease, and staffing details after a buyer is qualified and signed to an NDA. Plan tours and meetings so they look like normal vendor visits or routine office activity, which matters in a dental office where patients notice everything. Rejigg supports this with buyer vetting, digital NDAs, and a permissioned data room so you decide exactly what each buyer can view. Start at Rejigg.