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INSIDE THIS ISSUE
1. Why Dental Growth and Exit … and Why Now? - By Stan Kinder 2. When Is the Right Time to Begin Thinking About and Planning Your Exit? - By Stan Kinder 3. Why Dental Practice Buyers Walk Away - By Parthiv Shah (The Red Flags They Avoid) 4. Transition Market Update: YTD 2025 and Into the Future – By Stan Kinder 5. Are You Gambling With Your Most Valuable Asset? – By Stan Kinder DSO Partnership as a Strategy to Reduce Risk 5. Why Exit Planning Is Really Growth Planning in Disguise - By Parthiv Shah 6. Understanding the Magical Power of the Next Dollar of Practice Revenue – By Stan Kinder 7. What Increases the Value of Your Dental Practice the Fastest – By Parthiv Shah 8. How to Position Your Practice as a High-Value Acquisition – By Parthiv Shah 8. Choosing the Right Transition Partner – By Stan Kinder (Green Flags and Red Flags) 9. Why Exit Planning Should Start 3–5 Years Before You Sell – By Stan Kinder 10. What’s Wrong With a Practice Fueled Only by Referrals? 12. Legal Corner – By William Barrett Navigating Types of Dental Transactions & the Financial Terms to Know 13. Understanding the Pareto Principle and How It Applies to Your Practice – By Stan Kinder 14. The Dental Growth and Exit Blueprint – By Stan Kinder An Essential Planning Tool for Today and Your Long- Term Future 14. How Can the DG&E Team Help You? 15. Give Me a Moment for My Monthly Rant – By Stan Kinder
Why Dental Growth and Exit … and Why Now? (703) 298-1690 · DentalGrowthAndExit.com
Data in the trade press suggests that as many as a third of dentists are considering retirement or some form of exit within the next six years. Do you fall into this group? More importantly, would you be ready if circumstances pushed the issue sooner than you expect? For many practice owners, exit isn’t something they planned to think about yet. It’s something that starts showing up quietly in the background. Usually after another difficult staffing decision. Another increase in expenses. Another year where production stayed strong, but margins didn’t feel like they kept pace. Dentistry has become a heavier business to own. Labor shortages are persistent. Insurance reimbursements haven’t moved in the right direction. Technology requires continual investment. The operational side of the practice demands more attention than it once did. Working harder to hold things steady has become common. Over time, that pace takes a toll. Even doctors who still enjoy clinical dentistry find themselves questioning how long they want to carry the full responsibility of ownership and what their future options really look like.
If you’ve found yourself thinking ahead more often, that makes sense. The environment has changed, and the decisions you make now carry more long-term weight than they did earlier in your career. If you planted a stake in the ground to mark where you and your practice are today, it’s worth asking where that point sits in relation to where you eventually want to exit. Too many doctors get caught up in the daily grind of practice, focusing on next week or next month, without giving much thought to where things are headed. Over time, that leads to a reactive rhythm. Problems get handled as they arise. Decisions are made under pressure. Growth becomes inconsistent. Planning gives way to coping. What’s important to remember is that your practice is an asset, just like any other investment you own. If you hold stocks, bonds, or real estate, you expect those assets to grow between today and the time you plan to use them. You don’t leave that growth to chance. You pay attention to how those assets perform over time.
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Stan Kinder has over four decades of experience serving the dental profession in a variety of roles. He has helped dentists with every type of practice transition, traditional brokered transactions, consulting on associate-to-partner buy-in/buy-out agreements, and, for more than 15 years, as a senior mergers and acquisition executive with several different DSOs. Along the way, he consulted on practice management and growth. He is a one-of-a-kind resource for the practice owner seeking the optimal exit. Parthiv Shah is a growth strategist, entrepreneur, and bestselling author who helps professional practices scale with clarity, systems, and purpose. He is the holder of two U.S. patents, reflecting his long-standing commitment to innovation and practical problem-solving. Parthiv is the author of two bestselling business books and the recently released “ Dental Growth Machine,” published by EDRA, which outlines a proven framework for building sustainable, scalable dental practices. Through his writing, consulting, and advisory work, Parthiv is known for blending strategic insight with real-world execution to help leaders grow smarter, without burning out.
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Stan Kinder - (703) 298-1690 · 1
When Is th Right Tim to Begi
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Your practice deserves the same level of thought.
No matter when you plan to exit, time keeps moving. Whether you’re thinking in months or years, the endpoint eventually arrives. The question is what shape your practice will be in when you do.
Thinking About and Planning Your Exit
That’s why it’s worth asking what you want your exit to look like, and what steps it will take to reach it.
Yogi Berra once said, “If you don’t know where you are going, you might not get there.” A successful exit begins with defining what “success” means to you, determining your desired destination, and then developing a plan that supports it. One part of that picture will almost certainly be financial. For most practice owners, their dental practice represents a significant portion of their long-term financial future. At exit, value is driven by cash flow. That’s true regardless of who the buyer is. A dentist buyer needs enough cash flow to support the debt used to purchase the practice and still earn a living. A DSO buyer needs sufficient cash flow to justify their return on invested capital. Different buyers may use different structures, but the underlying driver is the same.
More cash flow supports more value.
When you look at your personal exit timeline through that lens, the connection becomes clear. Your ability to grow revenue and improve profitability determines how your practice asset changes between today and the day you eventually step away. Practices that grow deliberately tend to expand their options. Practices that drift tend to narrow them. This is why growth and exit are so closely linked. The quality of your exit depends on the growth decisions you make long before a transaction is ever discussed. Every improvement in profitability strengthens your position later.
Most dentists assume buyers walk away for obvious reasons. Declining revenue. A bad location. Outdated equipment. An owner who’s clearly burned out. That does happen. But far more often, buyers walk away from practices that look perfectly fine on the surface. Busy schedules. Solid teams. Decent collections. A good reputation in the community. From the outside, these practices don’t look broken at all. Which is exactly why it surprises doctors when a buyer quietly loses interest, starts asking tougher questions, or begins changing terms late in the process. When a buyer looks at your practice, they aren’t judging your dentistry. They’re trying to understand whether the business can stand on its own, grow in a predictable way, and perform consistently without you holding everything together through effort and experience alone. If you want a simple mental exercise, try this: If you weren’t the owner, and you were seeing your practice for the first time, what would you need explained before you felt comfortable moving forward? WHY DENTAL PRACTICE
This newsletter exists to give you a clearer path forward.
Dental Growth and Exit is designed to help you make better decisions about growth, profitability, and ownership over time. It provides a practical framework so you can strengthen cash flow, build equity inside your practice, and be prepared when the day comes to transition on terms that make sense for you.
The articles that follow are meant to be read at your own pace and revisited over time. You don’t need to have an exit date in mind to benefit from
them. What matters is understanding how today’s decisions shape tomorrow’s options, while you still have the freedom to choose what comes next.
That question alone reveals where many red flags live.
2 · DentalGrowthAndExit.com
e e n g d g ?
When I ask a dentist, “When is the best time to start thinking about your exit?” the answer is often the same … “It depends on your age.”
How consistent your systems are when things get busy. How much of the day still depends on you personally. None of those decisions are one-and- done. They repeat across the entire life of your practice. Over time, they compound, sometimes in ways you don’t notice until much later. That’s why the old advice to “begin with the end in mind” actually matters here. If you don’t have a rough idea of where you’d like to end up, it’s hard to know whether the decisions you’re making today are helping or hurting.
life to look like when you’re no longer in the chair every day? Those answers don’t lock you into anything. They give you direction. One of the most painful patterns I see is dentists waiting too long to think about these questions. Most practices follow a fairly predictable arc: early growth, a long plateau, and then a gradual decline as energy, time, and attention start shifting elsewhere. Too many doctors end up selling during that last phase. When that happens, value is lower, and options are fewer than they ever needed to be.
This makes sense on the surface. But in practice, it’s dead wrong.
The more honest answer is this: The right time to start thinking about your exit is the day you become a practice owner. And if your reaction is, “Well, I wish someone had told me that back then,” you’re in good company.
That’s why today is the right time to start.
Here’s why. No matter how far away you think your exit is, the decisions you make as an owner today are already shaping what that exit will look like. Every year, you’re either adding value to your practice or quietly giving some of it back. Earlier, I mentioned that practice value comes down to cash flow. That’s true whether your buyer is another dentist or a DSO. Different buyers, different structures, same math. The more sustainable cash flow your practice generates, the more valuable it becomes. Once you accept that, a lot of everyday decisions start to look a little different. Think about the choices you make over and over again. What technology you invest in. Whom you hire. How well they’re trained. How you retain patients. How you bring in new ones.
So, where do you start?
It’s a tough outcome to watch, especially because it’s usually avoidable.
You start by getting clear about what a successful exit means for you. Not in a spreadsheet sense, but in real-life terms.
Some dentists worry that focusing on exit planning means focusing too much on money. In my experience, that’s not how it plays out. The practices that perform best financially are often the ones delivering the best care and creating the strongest patient relationships. Good dentistry and strong economics tend to travel together. Planning your exit is about running a better practice while you’re still in it and making sure that when the time comes, you’re choosing from options instead of reacting to circumstances.
Ask yourself these questions:
Why would you sell? Retirement is one reason, but it’s not the only one. Some doctors want a partner. Some want to reduce the administrative burden. Some want to keep practicing without carrying the full weight of ownership. How does a sale fit into the rest of your financial picture? Do you want to keep working after a transaction, or would you rather step away? Would you stay longer if ownership became easier? What number actually matters to you? And just as important, what do you want
E BUYERS WALK AWAY (The Red Flags They Avoid) One of the most common reasons buyers hesitate is when too much of the practice depends on the doctor personally. Systems that live in your head instead of on paper. Decisions that still route through you because “it’s just easier that way.” A team where true ownership of outcomes hasn’t been clearly assigned. overhead, and profitability don’t move together in a way that makes sense, buyers hesitate. Buyers look for numbers that tell the same story month after month. When the story changes without a clear reason, they pause.
If hygiene production is flat while doctor production climbs, they want to understand why. If overhead has crept up without a clear return, they notice. If revenue looks steady but EBITDA tells a different story, that raises questions. Buyers don’t like surprises. And practices that haven’t been reviewed through a buyer’s lens tend to have more of them than the owner realizes. Another issue buyers quietly avoid is what I think of as “soft systems.” These are systems that technically exist, but only work when the right person is in the room. Scheduling that runs smoothly as long as one specific team member is at the front desk. Case acceptance that depends on how much time you have that day. Hygiene reappointment that happens when someone remembers to follow up. Here’s a useful test. Imagine you’re gone for four weeks. Not checking in. Not answering questions. Just gone. Would the practice run the same way on week
From your chair, that often feels like leadership. From a buyer’s chair, it feels fragile. Another quiet deal killer is an unclear financial story. Not bad numbers, just numbers that don’t fully explain themselves. When production, collections,
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... continued from Page 3 four as it does on week one? Buyers ask themselves some version of that question, even if they never say it out loud. Team structure can raise concerns as well, especially when roles aren’t clearly defined or compensation has grown without accountability. Long- tenured teams can be a strength, but only when expectations are clear and performance is measured. Buyers get cautious when loyalty has replaced structure, because fixing that after a transaction is harder and riskier.
Finally, buyers often hesitate when the owner hasn’t thought through transition expectations. Uncertainty creates friction. If it’s unclear how long you want to stay, what role you want after the sale, or what success looks like post-transaction, deals tend to slow down and valuations soften. None of these issues show up neatly on a P&L. But every one of them affects value. Most dentists don’t discover these red flags until they’re already deep into a conversation where leverage matters. By then, options often feel narrower than expected, and fixes become reactive instead of strategic. The strongest practices don’t wait for a buyer to point these things out. They look at their practice through the same lens buyers use, long before a deal is on the table. When you understand why buyers walk away, you’re in a much better position to make sure they don’t. You do that by reducing uncertainty, one system, one number, one decision at a time.
Then there’s growth.
Interestingly, buyers don’t walk away because a practice isn’t growing fast enough. They walk away when growth looks accidental. When there’s no clear reason revenue has held steady. No intentional plan behind patient
flow, case mix, or marketing. Stability without strategy makes buyers uneasy.
One quiet question buyers ask themselves is, “If nothing changes here, what does this practice look like three years from now?” If the answer isn’t clear, growth starts to feel fragile.
Transition Market Update YTD 2025 and Into the Future
Over the past year, DSO acquisition slowed modestly, a trend that carried through early 2025. The primary driver was interest rates. Private equity–backed DSOs rely on leverage, and when the cost of capital rose sharply, the math changed. Deals still happened, but buyers became more careful, and the pace cooled from the buying frenzy many dentists had grown used to seeing. That perspective matters. Even with a more cautious environment, there were more than 200 private equity–funded dental transactions in 2025. That remains roughly four times the transaction volume seen in any other health care services sector. Dentistry continues to stand out as one of the most attractive spaces for institutional capital. Industry forecasts still project the DSO market growing from approximately $27 billion in 2023 to more than $450 billion by the end of the decade. If those projections hold, transaction activity will remain strong, particularly as interest rates begin to stabilize and eventually move lower. Buyer interest has remained concentrated in specific areas. Specialty practices, especially oral surgery, continue to command strong attention, as do general practices with consistent growth and healthy net income. Buyers are still active, but expectations are clearer, and underwriting standards are tighter than they were a few years ago. What has changed most noticeably is deal structure. As capital became more expensive, buyers adjusted to manage risk. Earn-outs, installment payments,
and contingent components have become more common. At the same time, buyers are placing greater emphasis on operational efficiency. Growth through acquisition alone is no longer enough. Practices that can demonstrate year-over-year same-store growth and disciplined operations are the ones attracting the strongest interest. Selectivity has increased as well. Practices with a documented history of growth and a credible plan to sustain that growth after a transaction tend to attract multiple bidders. Practices that are flat or drifting may still sell, but they often face fewer options and less favorable terms. You may have also seen headlines about a small number of DSOs entering receivership. These stories are sometimes framed as evidence that the DSO model is broken. That conclusion doesn’t hold up. There are roughly 1,000 DSOs operating in the U.S. today. A few dozen failures represent a very small percentage of the total. Every industry has underperformers. Dentistry is no exception. What those situations do underscore is the importance of due diligence. If part of your consideration includes equity in a holding company or deferred compensation, the financial health and leadership of the buyer matters. This is where experienced advisors and strong legal counsel become critical to protecting your outcome. Valuation levels through 2025 have generally held steady. General practices have typically traded in
the 5.5x to 7.5x EBITDA range, with higher multiples reserved for exceptional opportunities. Specialty practices often command multiples roughly two turns higher. Traditional dentist-to-dentist transactions continue to range from 60% to 85% of gross revenue, largely due to lending limits imposed by banks. Those lending constraints haven’t changed, but the buyer pool has. Younger dentists are waiting longer to buy, often because of educational debt. At the same time, the profession continues to shift demographically, with women representing a growing share of graduates and, statistically, showing less interest in ownership than prior generations. None of this means selling to another dentist is no longer a viable path. It remains one option. It does mean the process may take longer, the pool of buyers may be smaller, and preparation matters more than ever. Practices that are positioned deliberately stand out quickly. Those that aren’t often wait longer and accept less favorable outcomes. The takeaway is straightforward: The market is active, but it’s more disciplined than it used to be. And in a disciplined market, preparation is what creates leverage.
4 · DentalGrowthAndExit.com
Are You Gambling With Your Most Valuable Asset? DSO PARTNERSHIP AS A STRATEGY TO REDUCE RISK
Let me share a bit of my own story. I’m not a dentist, but there’s a lesson here for every practice owner. A little over a decade ago, I was diagnosed with multiple sclerosis. At the time, I was a senior executive at a large DSO and traveling constantly. I had been healthy and active my entire life, so the diagnosis came out of nowhere. Almost overnight, my ability to continue in that role disappeared. It was abrupt, unexpected, and deeply unsettling.
in an associate or partner and put agreements in place to handle a buyout if something happens. And some choose to partner with a DSO, effectively taking some chips off the table while they’re still healthy and active. None of these approaches is inherently right or wrong. Each has advantages and trade-offs. What matters is that you’ve thought through how your practice, your family, and your future would be affected if circumstances changed suddenly. Life is unpredictable. That’s reality. And when your practice represents a large portion of your net worth, ignoring that uncertainty is an unnecessary gamble. If you ever consider a DSO partnership as part of your strategy, the quality of the partner matters enormously. There are good DSOs and those to avoid. Knowing the difference takes experience and careful evaluation. Most dentists have poured years of effort into building their practices. Protecting that work is about respecting what you’ve built enough to prepare.
Now, imagine that same situation from your side of the chair.
Imagine waking up one day unable to practice because something outside your control forced the issue. Most dentists know a colleague this has happened to. An illness. An injury. A health event that instantly changes everything. When that happens, the value of the practice often changes just as quickly. Without a continuity plan, a lifetime of work can be worth far less than it should be because the owner had no margin for surprises.
Tomorrow isn’t guaranteed. Planning while you still have options is always better than reacting when you don’t.
That’s a risk many dentists don’t like to think about, but it’s a real one. There are a few ways practice owners typically manage this uncertainty. Some rely on disability insurance. Others bring
WHY EXIT PLANNING IS REALLY GROWTH PLANNING IN DISGUISE
Most dentists think of exit planning as something you do at the end of your career. A future problem. Something that only matters once you’re ready to slow down, sell, or step away. That assumption is one of the most expensive mistakes I see. When exit planning is done right, it sharpens your focus and forces you to grow in smarter, more durable ways. The confusion comes from how people define “exit planning.” Many dentists picture spreadsheets, valuations, contracts, and deal structures. That’s part of it, but it misses the point. At its core, exit planning is about building a practice that performs well without relying on heroic effort from the owner. And that happens to be the same definition of a well-run, profitable, growing practice. When you look at your practice through an exit lens, the questions change. You stop asking how
busy you are and start asking how predictable the business really is. You stop asking whether you can make things work and start asking whether someone else could step in and succeed. Exit planning pushes you to strengthen systems, clarify roles, and delegate more deliberately. The immediate result is often less daily pressure. The longer-term result is a practice that can grow without burning you out. Financial clarity follows the same pattern. Practices that grow without an exit mindset often chase top-line revenue while losing sight of how that revenue behaves underneath. Exit planning forces you to pay closer attention to margins, overhead, and profitability trends. That discipline leads to better decisions. Smarter staffing. Better use of hygiene. A more intentional case mix. Exit planning also brings focus. Most dentists are pulled in too many directions at once. New technology. New services. New marketing ideas.
Looking at decisions through an exit lens helps filter out growth that adds complexity without adding value. There’s also a mindset shift that happens when you stop treating exit planning as a finish line. Dentists who delay planning often tell themselves they’ll get serious once things settle down. Exit-minded practices don’t wait for perfect conditions. They improve conditions by design. Ironically, the dentists who benefit most from exit planning are often the ones who have no immediate plans to exit. They’re focused on building something durable, profitable, and enjoyable to own. Exit planning simply gives them a framework to do that well.
Stan Kinder - (703) 298-1690 · 5
Understanding the Magical Power of the Next Dollar of Practice Revenue
At first glance, this seems pretty simple.
And sometimes more.
As a practice owner, if your revenue goes up, you earn more. That doesn’t feel like a concept that needs much explanation. And yet, most dentists don’t really understand why the next dollar of revenue matters so much more than the earlier ones. Once you see it clearly, it changes how you think about growth, profitability, and even exit value. Fair warning. There’s a little money math ahead. It’s not glamorous, and it’s not why you went to dental school. But if you own a practice, it’s information you can’t afford to ignore.
If you personally produce that incremental revenue, or your hygienist
does, the economics become even more attractive. There’s no additional provider compensation to pay. In those cases, you might keep 85 cents or more of every incremental dollar after variable expenses.
That’s what Dan Kennedy refers to as your “present bank.” It’s money you enjoy today. Cash flow that improves your lifestyle, reduces stress, and gives you flexibility as an owner.
The place to start is with a basic distinction: fixed costs versus variable costs.
But this is where things get really interesting.
You live with fixed costs every day, whether you think about them or not. Your rent or mortgage payment doesn’t change based on how busy the practice is. Insurance premiums show up on schedule. Equipment payments, depreciation, property taxes, and salaries for non-production staff all have one thing in common: They must be paid in fixed amounts at fixed intervals.
That same incremental dollar doesn’t just reward you in the present. It also creates value in your future. When your practice is evaluated by a buyer, particularly a DSO, the value is driven by adjusted EBITDA multiplied by a market multiple. Over the past year, general practices have typically traded in the 5.5x to 7x range, occasionally higher for especially attractive opportunities.
They don’t care whether it was a great month or a slow one.
Variable costs behave differently. These expenses rise and fall with production. Supplies. Lab fees. Provider compensation tied to collections or production. When you do more dentistry, these costs increase. When you don’t, they ease back.
What does that mean in practical terms?
It means that every additional dollar of profit you create today adds 5–7 dollars of value to your practice when you eventually transition.
That distinction matters more than most dentists realize.
One dollar. Two benefits.
Here’s why.
Income now. Equity later.
Once your fixed costs are covered for the month, every additional dollar of revenue behaves very differently from the early dollars that came in the door. I had a good friend with a successful solo practice doing about $1.7 million a year. He used to joke, only half joking, that he worked the first three to three and a half days each week just to pay overhead and taxes. Thursday and Friday were the days he actually made money.
That’s the “future bank.”
This is why understanding the power of incremental revenue matters so much. Growth is about deliberately adding revenue that falls through to profit and compounds into long-term value. When you look at growth this way, priorities start to shift. You become more interested in efficiency, margin, and systems that allow revenue to scale without exhausting you. The math is simple, but the implications are powerful. Earn more today. Build more value for tomorrow. That’s the real magic behind the next dollar of practice revenue.
Unfortunate? Maybe. Accurate? Absolutely.
Those early production dollars are busy paying fixed expenses. Rent. Payroll. Insurance. Equipment. By the time you get past that point, those bills are already covered. Which means the next dollar of revenue only needs to absorb variable costs. In most general practices, lab and supply costs tend to run in the low-teens as a percentage of revenue. Provider compensation, when applicable, might take another 30% to 35% of collections. You should always use your own numbers, not industry averages, but the principle holds.
And with that, as Perry Mason used to say for those old enough to remember, I rest my case.
Roughly half of each additional dollar you generate can drop straight to profit.
6 · DentalGrowthAndExit.com
What Increases the Value of Your Dental Practice the Fastest
When you ask most dentists how to increase the value of their practice, the answers tend to go big very quickly. A new location. A major equipment purchase. Adding a new service line. A complete marketing overhaul.
Case acceptance is another lever that affects value faster than most dentists realize.
This isn’t about pressure or sales tactics. It’s about systems. When treatment is presented clearly, consistently, and followed up in a defined way, conversion becomes more predictable. Predictability tells buyers that growth isn’t accidental or personality-driven. It tells them the practice knows how to convert opportunity into results.
Those moves can matter. But they’re rarely the fastest way to increase value.
In my experience, the quickest gains usually come from tightening a small number of fundamentals. These are the things that don’t always scream for attention when you’re busy seeing patients, yet they quietly drive what someone will pay for your practice. Here’s the shift that makes all the difference: Buyers don’t pay premiums for effort. They pay for clarity, predictability, and momentum. One of the fastest ways to increase value is improving how your revenue behaves, not just how much comes in. You can be busy every day and still have a revenue story that makes buyers uneasy. When production jumps around, when case acceptance swings month to month, or when collections don’t line up cleanly with production, buyers start asking questions.
That’s valuable.
Reducing dependence on you personally is another fast-moving value driver. If decisions always route through you because “it’s just faster,” that feels normal from the inside. From the outside, it looks fragile. Clear roles, documented processes, and a team that owns outcomes make a practice easier to step into. Buyers pay more for businesses that don’t require constant intervention.
Marketing clarity matters, too, though often not in the way dentists expect.
Buyers aren’t dazzled by flashy campaigns. They care about repeatable patient flow. When it’s clear where new patients come from, what it costs to acquire them, and how they move through the practice, value increases. When that picture is fuzzy, questions multiply.
When your numbers make sense and repeat, confidence rises. And confidence is what drives valuation.
One of the most overlooked drivers of value is momentum.
Hygiene is another place where value can move fast.
If your practice is flat, even if it’s profitable, buyers get cautious. Flat feels finished. Modest, controlled improvement feels like opportunity. Buyers will pay more for a practice that still has room to grow, especially when that growth looks achievable without dramatic change. Many of these issues can be identified and addressed within a few months. That’s why practices that start looking at themselves through a buyer’s lens early often see meaningful increases in value long before a transaction is even discussed.
If you’re looking at your practice honestly, ask yourself whether hygiene is fully utilized, whether reappointment happens consistently, and whether hygiene predictably supports restorative and higher-value treatment. Small improvements here do more than add revenue. They stabilize it. That stability shows up immediately when someone evaluates your practice.
Overhead control works the same way.
This isn’t about cutting corners or running a bare-bones operation. Buyers aren’t impressed by austerity. What they want to see is intention. Do staffing levels make sense for production? Do expenses have a clear purpose? Or has overhead slowly drifted upward without anyone really noticing?
The mistake is thinking value only matters on the day you sell.
In reality, value affects leverage every step of the way. It influences financing, partnerships, associate buy-ins, and your long-term flexibility as an owner. Increasing value isn’t about rushing toward an exit. It’s about strengthening the business you already own. The strongest practices focus less on how growth looks and more on how it behaves. They tighten systems. They improve predictability. They address small inefficiencies before they compound. Those changes make your practice easier to run, less stressful to own, and better positioned for whatever comes next. And that’s why the fastest way to increase value usually feels less dramatic than expected. It feels like clarity.
Even modest improvements here can move profitability quickly. And because value is driven by cash flow, those changes often have an outsized impact.
Stan Kinder - (703) 298-1690 · 7
How to Position Your Practice as a High-Value Acquisition
(Green Flags and Red Flags) For many dentists, the hardest part isn’t deciding to sell. It’s deciding whom to trust on the other side of the table. Price matters, but so do control, independence, and what happens to the practice you’ve worked so hard to build. Most bad transitions fail because the relationship wasn’t thought through carefully enough at the beginning. Expectations weren’t aligned. Assumptions went unspoken. The partnership was defined too loosely, or too late. Choosing the Right Transition Partner
Most dentists assume that becoming a high-value acquisition is about size. More chairs. More revenue. More technology. But from a buyer’s perspective, a high-value acquisition is the practice that feels easiest to understand, operate, and grow. The more confidence a buyer has in what happens after the handoff, the more they’re willing to pay. Positioning your practice that way requires seeing your business the way a buyer does. Practices that position well have clear, repeatable systems. Scheduling runs consistently. Case presentation follows a defined process. Hygiene supports restorative care in predictable ways. The team knows what’s expected and how success is measured. Financial clarity is another critical piece of positioning. Buyers want a story the numbers tell without explanation. Production, collections, overhead, and profitability should move together logically. High-value practices also demonstrate control over patient flow. Buyers want to see that new patients arrive through understood channels and move through the practice in consistent ways. When patient acquisition feels repeatable, value increases. Team structure matters more than many dentists expect. Buyers look closely at whether roles are defined, compensation aligns with performance, and leadership exists beyond the owner. Practices that rely on personality rather than process feel risky from the outside. Another important positioning factor is momentum. A practice that appears “maxed out” raises concerns. A practice that shows controlled improvement signals opportunity. Buyers are drawn to practices where there is visible upside that doesn’t require breaking what already works. Positioning also involves clarity around the owner’s future role. Buyers aren’t automatically looking to remove the doctor. In many cases, they prefer continuity. But uncertainty creates hesitation. Practices that position well have thought through post-transaction expectations, even if they’re flexible. One of the most overlooked elements of positioning is documentation. Practices that can show how things get done, rather than relying on tribal knowledge, feel safer to acquire. Documentation reduces transition risk, and lower risk supports higher value. Positioning is not about pretending your practice is something it isn’t. It’s about helping someone understand, quickly and confidently, what they’re buying and why it works. High-value acquisitions are built through consistent decisions that reduce risk and increase confidence. When your practice is positioned clearly,
Choosing the right transition partner is largely about reducing regret.
One of the strongest green flags is clarity. A good partner can explain how they operate, how decisions are made, and what life looks like after the transaction. They welcome questions about autonomy, leadership, or accountability.
Another green flag is flexibility grounded in structure. Strong partners can explain where there’s room to adapt and where there isn’t. When everything sounds negotiable, that’s often a warning sign. When nothing is negotiable, that’s one, too. Balance matters.
Pay close attention to how a potential partner talks about your role after the transition. The best relationships treat the dentist as an asset. They value continuity, patient relationships, and clinical judgment. If the conversation quickly shifts toward replacement or rapid change without context, it’s worth slowing things down. Transparency around economics is another major indicator. A strong partner explains how value is created after the transaction and how success is measured. When compensation structures are difficult to explain or feel unnecessarily complex, it often signals misalignment down the road. Culture fit matters as well. How are teams treated? How are leadership transitions handled? What happens when things don’t go according to plan? You learn more by asking how challenges are handled than by listening to polished success stories. Pressure is one of the clearest red flags. Good partners don’t rush decisions. Manufactured urgency often benefits one side more than the other. Resistance to independent advice is another warning sign. The right partner expects scrutiny and understands it leads to stronger relationships. No transition is perfect. Every deal involves trade-offs. The goal isn’t to eliminate compromise, but to avoid surprises.
buyers don’t have to guess. And practices that don’t require guessing are the ones buyers compete for.
Dentists who choose their transition partner intentionally tend to walk away with more than a fair deal. They keep a sense of agency, maintain pride in what they built, and feel confident about what comes next.
8 · DentalGrowthAndExit.com
WHY EXIT PLANNING SHOULD START 3–5 YEARS BEFORE YOU SELL
Most dentists delay exit planning because selling feels far away, abstract, or uncomfortable. As long as the practice is running, patients are coming in, and income feels steady, it’s easy to assume there will be plenty of time later.
The best exit outcomes rarely happen when someone is exhausted or forced by circumstance. They tend to happen when the doctor still has energy, credibility, and optionality. Planning 3–5 years ahead helps keep you in that position longer. It allows you to choose when you engage buyers or partners, instead of responding when someone else dictates the pace. That difference alone can materially affect both deal structure and outcome.
That assumption is where problems begin.
Exit planning doesn’t take 3–5 years because the paperwork is complicated. It takes that long because the things that actually drive value can’t be rushed without giving up leverage.
There’s also a personal benefit that doesn’t show up on a balance sheet.
Practices become valuable by behaving consistently over time.
Dentists who begin exit planning early tend to carry less background anxiety because nothing feels urgent. They know where they stand. They understand what’s working, what isn’t, and what levers actually matter. That clarity reduces the mental weight many practice owners carry for years.
When dentists wait until they feel “ready” to sell, they often discover that the timeline no longer belongs to them. A health issue. Burnout. A staffing collapse. A market shift. Suddenly the conversation moves faster than expected, and options narrow. By contrast, dentists who start planning years in advance tend to stay in control, even if they ultimately change their minds about selling. One reason early planning matters is that buyers don’t value intentions. They value patterns. A single strong year is helpful. Two years of improvement gets attention. But 3–5 years of steady, explainable performance tells a much stronger story. It shows that growth wasn’t accidental, and that systems weren’t temporarily propped up to make the numbers look good. Buyers and lenders know the difference, even if they don’t say it out loud. Another reason timing matters is that many of the biggest value drivers move slowly by design. Improving hygiene productivity isn’t a switch you flip. Case acceptance doesn’t stabilize overnight. Reducing reliance on the owner takes time, trust, and repetition. Overhead doesn’t tighten cleanly in one quarter without unintended consequences. These changes need time to settle, normalize, and prove that they hold up under pressure.
Another advantage of early planning is flexibility.
When you start early, you can explore different paths without pressure. Bringing in an associate. Structuring a partial sale. Partnering while retaining control. Continuing to own longer than expected. When planning starts late, those conversations happen under stress, which limits creativity and choice.
It’s also important to understand what early planning does not do.
It doesn’t lock you into selling. In fact, it often has the opposite effect. Many dentists who begin planning 3–5 years out end up delaying a sale because the practice becomes more profitable, more stable, and more enjoyable to own. Others move forward sooner because the opportunity is right. Both outcomes are wins.
The real mistake is thinking exit planning only matters when exit is imminent.
In reality, exit planning is long-term stewardship of the business you’ve already built. It’s making sure your future self has options instead of obligations. It’s protecting your leverage before you need it. Dentistry is demanding. Practice ownership adds another layer entirely. You’ve already done the hard part by building something meaningful. Exit planning, done early, is how you protect that work and make sure it serves you when it matters most.
That proof is what creates leverage.
Early planning also changes how dentists make decisions long before a transaction is on the table. Instead of asking, “Will this get me through the next six months?” the question becomes, “Does this strengthen the practice I may hand off someday?” That shift alone tends to clean up a lot of noise. Fewer reactive decisions. Less chasing of shiny ideas. More focus on systems that compound value quietly in the background.
Stan Kinder - (703) 298-1690 · 9
What’s Wrong With a Practice Fueled Only by Referrals?
Nothing and everything.
Therefore, second, nobody sane will pay top dollar for a practice entirely living on referrals. It lives by a fragility, not a stability. It is undoubtedly highly dependent on the doctor himself and probably one or two key members of the team’s personal influence, personalities, and relationships with the patients. If a buyer removes those one, two, or three drivers of the referrals also the one driver of growth, what might happen? There is very little real equity in the referral driven practice. There can be much, much more in a patient acquisition system-driven practice. The value argument is much stronger because there is a documented, steady, predictable inflow of new patients from multiple media and the methods that the potential buyer can trust, feel reassured by, and can step into and continue operating. They are getting a machine, not an intangible. This is not to suggest you shouldn’t use your own authority, believability, pleasing personality, personal story, case presentation skills. You should, of course. But over-dependence on just you is nonreplicating. At best, I have to sharply discount projections for new patient flow as well as for case sizes and conversion rates when buying the doctor dependent practice. The big question in the mind of a smart buyer should
It is obviously something to celebrate. The positives include higher net margin thanks to nominal, or no advertising spend and that it is testament to the success at caring for and nurturing good relationships with patients. The referral numbers are, in fact, the truest measurement of patient enthusiasm — a much higher standard than patient satisfaction, the bare minimum. Walt enunciated the Disney success secret as “doing what we do so well and so uniquely that our guests can’t resist telling others about us.” The practice as a whole — location, environment, staff, doctors, quality and efficacy of care, on-going communication, and relationships — should hit Walt’s target. The big number to track is number of referrals versus total number of active patients by month and quarter. If that is 1-to-1, you’ll be growing much more than natural attrition, and nearly net doubling year over year over year. It’s
easily arguable that it should be 2, 3, or 4 to 1. But if you investigate your ratios, you’ll probably find you get a fraction of one referral per active patient
per year. Frankly, such a stat should alarm you and inspire constructive action. Why WOULDN’T you get at least -to-1? I can tell you, and may do so in a future month of these articles , but here, for this conversation’s purpose, let’s assume you are doing very well with referrals: at least 1 for 1. What’s wrong with simply relying on that?
be: What reassures me that I will be able to step in here, take the wheel, and seamlessly, smoothly continue experiencing the same (or better) patient attraction, acquisition, case acceptance, and, yes, referral ratios?
Everybody thinks about the operating systems. Fewer think, as they should, about the advertising, marketing,
promotion and patient attraction SYSTEM. You can choose to present for sale just another practice OR a practice with a unique, proprietary, reliable
A lot.
First, it violates the most important caution about business: the worst number, found anywhere in the business, is one. One is a fragile number. Many is an anti-fragile number. Diversity of new patient sources is stability.
growth machine for it.
I have been working with doctors, including dentists, on both proper referral system and results AND a proper
10 · DentalGrowthAndExit.com
patient attraction system for automatic and predictable growth and anti-fragility since 1997. In the pre-internet/social media world and in the post-internet/social media world. Much has changed at the parts- of-the-machine level but very little has changed at the strategic level, and nothing, I repeat, nothing has changed with the success principles. One of my current private clients is a 60-office, multistate, fast-growing implant dentistry company. The exact same success principles and strategies fueling its fantastic growth are the same ones I provided to practices in the late 1990s and 2000s. Most dentists are only tactical in their thing, but the winning approach is to know the short list of principles that make your practice a successful, valuable, saleable business, then what strategies are needed, linked to those principles, and only then, finally, what tactics are employed. One of my books, “ALMOST ALCHEMY: More From Fewer and Less,” might contain strategies linked to your particular goals or it might not. Ultimately, you need brilliant clarity about all your objectives and an overriding master objective to then pick, assemble, and, if need be, create the strategies matched to those objectives. Being more or less strategic may translate into tens or even hundreds of thousands of differences in you obtainable exit price. The core of all this, a key determinate of true, presentable value of any business including yours is the comprehensiveness and efficiency of SYSTEMS for every aspect of the business versus random, erratic acts. When Ray Kroc first saw the McDonald brothers’ hamburger joint, he saw a fantastic product but a terrible business, because it was disorganized, run by the seat of the brothers’ pants, virtually everything wrong — even the work flow of putting an order together. But he also saw what it could be if the same popular products were coupled with a system so good that pimply-faced teenagers could run it. Henry Ford is credited with the Model T, but his more valuable invention was the franchised system, using its capital to fund inventory of cars and an overlaying system of national brand and local direct sales advertising. A lot of the successful businesses we all know have, at their core, systems — including marketing systems. Keep in mind that, perhaps unreasonably, people want certainty. Investors and company CEOs loudly bemoaned the uncertainty caused by President Trump’s tariffs. Even though there’s always some type of uncertainty in the markets. One of the things patients are always anxious about is: What will MY outcome be — for certain? It’s why digital imaging of the smile to come is more important than 100 before/after photos of other people. Certainty has enormous persuasive value. If YOU CAN SAY: “Here is how our new patient acquisition system works — very formulaically. Each month we invest X$ into these five different advertising channels, on average bringing Y# of new leads into our marketing funnel. X% of those schedule and keep appointments, thus an average per kept appointment cost of $Z. 50% of those accept treatment, so average cost per new patient of $A. Step 2: From the leads who do not immediately schedule, without 16 step online/offline follow-up, we get half of those to schedule with 90 days. The cost for that extra follow-up is $B per lead. Cost per sale: $C. Step 3: Our multistep referral simulation system gets .5 new patients per patient within their first 6 months..... and so on. You have system diagrams, stats, ROI numbers, and samples of all your copyright and trademark
protected system contents. “With slight seasonal variances, these are the results from our systems each month for the past 36 months” you get to say. “You just run these 6 variable campaigns in rotation and this evergreen, constant campaign all year, and these ARE the results.” Is this reassuring to a potential buyer? Is this more reassuring than just “we get most of our new patents by referrals”? Does owning systems like I just described make you smarter and more sophisticated than the average dentist? Yes. Does it make your practice more valuable? Of course. And this is not just theatrics for exit; this is the situation you should be in now, for steady growth, for peace of mind from anti- fragility and from predictability. You can start the month one of three ways: One, with hopes of new patients. Two, with specific goals for new patients. Or three, knowing, within slight range of variance, how many
new patients you’ll have by month’s end. Which of those three sound better to you? Will sound better to a buyer of your practice? —Dan S. Kennedy
Dan S. Kennedy is a much sough after direct marketing strategy consultant and copywriter, helping build brands and businesses like Perfect Smile® and Proactiv®, America’s #1 acne treatment, MiracleEar®, and Medicare Express. He is the author of the bestselling series of “NO B.S.” books, including the most recent No B.S. Guide to Succeeding In Business by Breaking ALL The Rules. As a speaker, his long career includes 9 years on the largest public seminar tour in America, alongside four former U.S. Presidents, countless Hollywood and sports celebrities, great marketing founder-CEOs like Debbi Fields (Mrs. Fields Cookies) and Jim McCann (1-800-Flowers), and legendary speakers including Zig Ziglar, Brian Tracy, Jim Rohn and Tom Hopkins. His own seminar events have featured celebrity-entrepreneurs like Gene Simmons (KISS), Joan Rivers, George Foreman and Kathy Ireland The entrepreneurs’ organization he founded can be looked in on at MagneticMarketing.com. Over 30,000 dentists, chiropractors and other health care professionals have been in his audiences.
Stan Kinder - (703) 298-1690 · 11
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