The Dental CEO Podcast Dental CEO Podcast #11 - Dentistry's Dirty Little Secret
May 12, 2025
Dr. Scott Leune uncovers shocking truths about selling dental practices and the hidden costs of partnering with dental service organizations. Many dentists unknowingly give away their true value by not understanding flawed financial models. The discussion highlights the importance of financial literacy, helping dental professionals avoid costly mistakes. It's a wake-up call for anyone considering selling their practice, emphasizing the need to be informed about the real worth of their business.
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DSO Sale Often Undervalues Practice
- Selling a practice to a DSO often means giving it away essentially for free due to stay-on requirements.
- Private sales without stay commitments generally yield better net financial outcomes for dentists.
Stay-On Requirement Erodes Sale Value
- A sale price equaling EBITDA multiple cancels out if seller must stay that many years.
- Staying post-sale means losing owner profits while only earning associate salary, making ownership retention financially superior.
Higher DSO Multiples May Not Benefit Sellers
- Higher EBITDA multiples offered by DSOs are neutralized by mandatory work years.
- Dentists often earn more by owning longer and selling later for lower multiples than selling high and staying post-sale.