How Long Does It Take to Sell a Dental Practice?

Being able to sell your dental practice is an achievement. It means you’ve built a successful business, usually through decades of hard work and dedication to your patients. Just as it took a long time to build up your practice, it also takes some time to sell it. Whether you’re retiring, relocating, switching to a new career, or simply scaling back your day-to-day responsibilities, we’ll explain how long it takes to sell a dental practice, the best time to sell, and the steps you can expect in the process.

How Long Does It Take to Sell a Dental Practice?

It’s natural to wonder how long it will take to transition your dental practice to another owner, but answering this question—even as experts in selling dental practices—is complicated.

The truth is, the timeline for selling a dental practice can vary significantly and there are a number of factors involved. In some cases, selling a dental practice involves a lengthy transition period. This can happen when the seller wants to ensure a smooth handover for patients and staff, or when a buyer wants to have time to learn the ropes before fully taking over. A gradual transition may take several years to complete, allowing the seller to reduce their hours slowly while the buyer slowly ramps up their involvement in the day-to-day management of the business. This approach can be beneficial for maintaining patient continuity and staff morale.

On the other end of the spectrum, some dental practices sell remarkably quickly. With the right preparation and market conditions, the entire process can be completed in a matter of weeks. A shorter timeline is more common when the business is highly desirable, the seller has thoroughly prepared all necessary documentation and financials, and the buyer is either experienced in making purchases or has a team to help with the process.

Here are some of the factors that go into determining how long it takes to sell a dental practice:

1. Your Market

The local market plays a significant role in determining how quickly you can sell your dental practice. In urban and suburban areas with a high demand for dental services, practices are likely to sell much faster than in rural or less densely populated areas. Cities also tend to attract more qualified buyers and provide more opportunities for business growth, assuming the dental care market is not saturated in the area. Understanding the dynamics of your local market can help you gauge the demand for your business.

2. Who You’re Selling To

The type of buyer you are targeting can also impact the timeline. Selling to a Dental Service Organization (DSO) may be faster due to their streamlined acquisition processes and financial resources. Alternatively, selling to an associate within your practice or to an outside dentist may take longer, especially if financing needs to be arranged.

3. Your Preparedness

Being prepared is crucial for a streamlined sale process. It’s important to have your financials, patient records, and all necessary documentation in good order to expedite the process of transitioning your business to a new owner.

Before listing your dental practice for sale, you’ll want to address any outstanding issues and ensure all your physical assets and equipment are in excellent condition to make it more attractive to potential buyers; most buyers won’t want to buy a business and then have to immediately make additional investments in upgrades. If making these improvements isn’t feasible for you, you’ll need to price your practice accordingly, and you can likely expect a longer sale timeline as you search for the right buyer.

4. Your Goals

Your personal goals and motivations for selling can influence the timeline as well. If you’d like to stay on board during the transition period, the process will be longer than if you simply want to make a quick exit to free up your time for your next chapter.

The Best Time to Sell a Dental Practice

Selling a dental practice isn’t like selling a house—there’s no specific time of year that’s better than any other. Ultimately, the answer comes down to when you’re ready to sell your practice.

The first consideration is your mental readiness. There are several common reasons why dentists decide to sell their practices. Retirement is one of the most frequent motivations, as many dentists look forward to enjoying their golden years after decades of hard work, and selling their practice helps finance their rest and relaxation. Relocating to a new area for personal or professional reasons is another common factor.

Additionally, some dentists choose to scale back their responsibilities and enjoy a better work-life balance by selling their practice.

The next consideration is your practice’s readiness for a sale. The best time to sell a dental practice is after you have invested the necessary time and effort into preparing for the sale. Proper preparation will optimize the value of your business and attract more potential buyers. Rushing into a sale without adequate preparation can lead to a lower purchase price and a longer timeline.

Steps Involved in Selling

Here’s a broad overview of what the process of selling a dental practice entails.

1. Decide Between a Broker or FSBO (For Sale By Owner)

One of the first decisions you’ll need to make is whether to use a broker or handle the sale yourself (FSBO). Brokers can provide valuable insights and help market your practice to a wider audience. However, they also charge a commission for their services, which means you may end up with less money in your pocket. If you choose to sell your practice on your own, you’ll need to invest time and effort into marketing and negotiation.

Whether you sell with a broker or do FSBO, you can use Practice Orbit to list your practice, help find a buyer, and keep your team all on the same page throughout the sale process.

2. Get a Valuation

Valuing your dental practice accurately is essential for a successful sale. Most businesses are valued based on their Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). Working with a professional appraiser or accountant can help you determine a fair market value for your practice. As a first step, you can use Practice Orbit to provide an Orbit Estimate to give you an idea of the price range you can expect for your business.

3. Draft a Letter of Intent

Once you have a potential buyer, the next step is to draft a Letter of Intent (LOI). The LOI outlines the terms and conditions of the sale, including the purchase price, payment terms, and any contingencies. This letter serves as a preliminary agreement before the final purchase contract is drafted. One of the benefits of Practice Orbit is our library of legal documents, including Letters of Intent drafted by attorneys with experience in the sale of dental practices, to help expedite the sale process.

4. Negotiate and Sign a Purchase Agreement

Negotiations are a critical part of the selling process. Both parties will need to agree on the terms of the sale, including any adjustments to the purchase price, payment schedule and terms, and transition period. If issues come up during the due diligence, additional negotiations will be necessary to address them to the satisfaction of both parties. Once the terms are finalized, a formal purchase agreement is drafted and signed.

5. Transition Ownership

The final step in the process is the transition of ownership. This involves transferring patient records, notifying patients and staff, and ensuring a smooth handover to the new owner. A well-planned transition can help maintain patient continuity, keep staff engaged, and minimize disruption to the practice.

The Bottom Line

Selling a dental practice is a complex process that requires careful planning and consideration; as such, it’s not the type of transaction that happens in a week or two—or even a month or two. By understanding the factors that influence the timeline and preparing your dental practice for sale, you can streamline the process.

Practice Orbit is here to help you through every stage of selling a dental practice, whether you choose to use a broker or handle the sale yourself. Our expertise, marketplace, and seller resources can make the process smoother and more efficient, allowing you to move on to your new endeavors sooner, whatever they may be.

Ready to take the next step? Contact Practice Orbit today to learn more about how we can help you sell your dental practice according to your timeline.