In this episode of Beyond Bitewings, we're bringing back some of our favorite advice from our episodes that discussed selling a dental practice to a Dental Support Organization (DSO), highlighting the significant differences between selling to a DSO and an independent buyer. The conversation covers how DSOs value practices using EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), and why this can result in higher sale prices compared to traditional methods that use a percentage of collections. We also explain the importance of understanding value from the DSO and private equity perspective and warns practice owners about the risks of responding to unsolicited offers without proper representation.

The episode addresses key concerns for dentists, such as what to expect after the sale, how contracts are structured, and why it’s essential to shop around for multiple offers before committing. They discuss the impact of EBITDA calculations on a practice’s valuation, the role of lease agreements when the seller owns their building, and strategies to maximize the value of the transaction.

Key Topics Discussed:

1. How DSOs value dental practices using EBITDA
2. Differences between DSO and independent sales
3. The structure of post-sale contracts and earn-outs
4. Pitfalls of responding to unsolicited DSO offers
5. The importance of getting multiple offers and proper representation
6. EBITDA calculations and their effect on practice valuation
7. Lease agreements when the seller owns the building
8. Advice for maximizing practice sale value
9. The changing dental industry landscape with the growth of DSOs

Ash sits down with Dr. Ruth Mannschreck, a seasoned dentist turned practice transition coach, to talk about the real-world challenges and overlooked opportunities when selling a dental practice. Dr. Ruth shares the mistakes she made during her own transitions, such as not planning far enough in advance and not preparing the practice to be attractive to buyers from both a financial and operational standpoint. She emphasizes the importance of understanding what you want from a sale, proactively increasing value, and reducing buyer risk in ways that go beyond just the numbers.

The conversation moves into the role of practice culture, team involvement, and the transition process. Dr. Ruth advocates for engaging the dental team early in the transition, highlighting the benefits of transparency and preparing the team to operate independently. They also discuss the pitfalls of overreliance on the practice owner and the risk of selling a practice that functions more like a job than a turnkey business. Dr. Ruth offers listeners access to her resource checklist at prepitnow.com and outlines how planning and open communication can support a smoother transition for everyone involved.

To find out more or connect with Dr. Ruth, visit: https://shorelinestrategies.com/

Key Topics Discussed:

• The importance of early planning and preparation when selling a dental practice
• Common mistakes practice owners make during transitions
• Financial versus operational readiness for sale
• The value of culture, systems, and team capability in the sale process
• Strategies for increasing practice value and reducing perceived risk
• The impact of naming and branding on practice transitions
• Including the dental team in discussions and evaluations with potential buyers
• Creating a turnkey business versus selling a “job”
• Overcoming the challenge of letting go of control as an owner
• How to access Dr. Mannschreck’s Prep It Now checklist for selling a practice

Ash welcomes Paul Sippil, a forensic 401k consultant, to discuss the complexities and hidden issues often found in group retirement plans, particularly 401k and profit sharing plans within dental practices and other small businesses. Paul shares how his unique role focuses on exposing conflicts of interest, unnecessary fees, lack of transparency, and even fraud within these plans. He describes how business owners and plan participants frequently misunderstand how fees are assessed, often assuming they pay nothing out-of-pocket—when in reality, high costs may be embedded, sometimes even continuing long after the original adviser has left or, in some cases, passed away.

Paul explains the mechanics of broker commissions, how these fees are often hidden from both employers and employees, and the importance of transparency in fee structure. He provides practical advice for dental practice owners and other professionals on how to minimize costs by paying fees directly at the employer level, allowing for tax deductibility and better cost control. Paul also covers the value of one-on-one meetings with advisers for plan participants, and offers recommendations on how owners can better manage their retirement plans to avoid unnecessary expenses and potential abuses.

To learn more or connect with Paul, visit: https://www.paulsippil.com/

Key Topics Discussed:

• What a forensic 401 (k) consultant does
• Common misunderstandings and hidden fees in group retirement plans
• Broker commissions and lack of fee transparency
• Real-world examples of fee abuses and potential fraud
• Why dental and other professional practice owners should pay retirement plan fees directly
• Importance of transparent, fixed-fee arrangements with advisers
• The value and scarcity of one-on-one meetings between advisers and participants
• Simple steps to reduce retirement plan costs and improve oversight