Top 5 Mistakes Doctors Make When Selling Their Dental Practice

Selling a dental practice is one of the biggest financial decisions a dentist will make in their career. Like any business transaction, there are several things that can go wrong when selling a dental practice. To avoid these costly mistakes, it is best to have a plan and be prepared long before you decide to sell. Proper planning will ensure you make educated decisions on what is right for you and your practice. At Watson Brown, we have seen practically every side of buying and selling dental practices. Our unique experience allows us to notice the patterns of common issues that arise during this process. Here are the biggest mistakes doctors make when selling their dental practice.

1. Inaccurate Valuation of Your Practice

You might be surprised to learn an inaccurate valuation can go in either direction. Having an incorrect understanding of your dental practice’s value on the market could lead you to list for too low, and end up leaving money on the table. On the other side, being unrealistic regarding your practice could have you list for too high, and make it more difficult or impossible to sell. In some cases, a buyer may even offer their own valuation, which is likely to be biased in a way advantageous to themselves. It is key to have an accurate valuation that can be trusted by both the buyer and the bank, something that goes deeper than just a multiple of EBITDA or a ratio of annual collections. An experienced transition group can help you evaluate your unique practice, and ensure you get the most out of your sale. Read more about Dental Practice Valuations.

2. Sharing Information Too Soon

Selling a dental practice is as large of a business decision as buying a dental practice. From every angle, it takes time to properly sell and transition to the buyer. Sharing your intent to sell too early can make your employees, patients, and referral sources nervous. The uncertainty for your staff of working for a different employer, and for your patients of receiving dental care from a different provider, can cause them to flock to other practices. This loss of staff and patients can cause the value of your practice to decline rapidly. It is important to announce the sale after you can confidently ensure the buyer can close on the sale. Keep everyone’s mind at ease by not sharing this information before it strategically makes sense to.

3. Making Large Changes During Transition

Over time, it is important to make upgrades to your practice. While there may “never be a right time” for some changes, making large purchases immediately before listing your dental practice for sale can be unwise. Incurring additional practice debt could adversely affect your dental practice’s value. Change during transition should be a part of a larger strategy that serves the value of your practice. Focus on changes that potential buyers might find appealing, like tuning up the dental office equipment. Keeping equipment updated, both functionally and aesthetically, can increase your offer price. When considering the acquisition of a practice absent of modern equipment, buyers may adjust their offer to account for the upgrades they will need to do. However, substantial replacement of equipment is rarely worth the investment. If you’re curious about where to draw the line, it is smart to work with a dental broker to determine what strategy makes sense for your practice.

4. Not Being Actually Prepared to Sell

There are doctors who have a dental practice for sale, have done a dental practice valuation, and are even in the process of vetting buyers when they decide selling is not for them. To avoid going down this road, there are two main areas of readiness you want to consider. First, are you financially ready? A dental practice is the main source of income for most dentists. Work with your financial planner to determine if now is the right time for you to sell, and if it makes sense for your financial situation.

Second, besides practicing dentistry, is there something else you would rather pursue? As working and running your practice likely fills a large portion of your time, identify where your interests and passions lie. If retirement is in the cards, know what you’d like to spend your time doing. If you’re not ready, know what your next career steps are. Either way, you do not want the sense of loss that comes with unfilled time. Selling your dental practice should be part of your plan to transition to retirement or your next career. Having a plan and ensuring your own preparedness will help prevent you from getting cold feet.

5. Trying to Do it All Alone

Many skills play into the successful sale of a dental practice. The knowledge of an attorney, financial advisor, market analyst, and negotiator are all relevant. While you may be knowledgeable in one or even multiple of those areas, it cannot replace having an experienced team on your side. Doing it alone can be tempting, as there is a misconception that it saves money. However, leaving money on the table, long sale times, and unexpected legal trouble adds up. Using a dental broker can save you time, stress, legal issues, and money in the long run.

Additionally, using a dental broker assists with keeping the sale confidential. Negotiating directly with a buyer can bring emotion into the conversation. On one side, there is the seller who has invested years of labor into a practice that defines their reputation. On the other side, there is a buyer who is taking on a large responsibility and incurring a substantial amount of debt. This can lead to an emotionally charged atmosphere that makes decision making difficult, or even kills the deal. A dental broker will ensure you get the best deal you can, and handle all the issues that go along with such a complicated business transaction. The team at Watson Brown provides an exceptional combination of accounting, marketing, legal, and tax expertise. We are the only transition firm in the United States with both a tax attorney and dentist. Our expert attorneys, accountant, and tax specialist will ensure a smooth transition while also minimizing common pitfalls that could jeopardize your success.


Frank Brown, JD, LLM, is a tax attorney and accountant who limits his practice to practice transitions. Mr. Brown has helped dentists with sales and appraisals since 1990. Reach him at 469-222-3200 or 888-419-5590, ext. 469, or frank@ADStexas.com.


Are you considering selling a dental practice or selling an orthodontic practice? We can help you sell your dental practice for the greatest possible profit. See our sellers steps for more information.

Terry D. Watson, DDS, and Frank Brown, JD, LLM, are with ADS Watson, Brown & Associates, a dental practice transition consulting and brokerage firm in Dallas, TX. They are members of American Dental Sales and can be reached on the Contact Page.