Selling to a DSO vs Finding Your Own Buyer: How to Think Through the Decision

DSO offers and private buyer transactions are fundamentally different in structure, timeline, and outcome. Here is how to think through the decision before you commit to either path.

When a dental practice owner decides it is time to sell, they typically face a choice that is more complex than it initially appears. Sell to a DSO and receive a potentially premium offer with a structured earn-out, or pursue an individual buyer transaction with a cleaner structure and more clinical autonomy post-sale.

Both paths have genuine merits and real trade-offs. The right answer depends on your practice profile, your financial goals, your timeline, and what you want the next three to five years of your professional life to look like.

The DSO Offer

DSOs are sophisticated buyers with active acquisition programs. They evaluate practices systematically, move quickly when they identify a target that fits their criteria, and have access to capital that allows them to pay at or above market for practices that meet their standards.

The headline number in a DSO offer is often higher than what an individual buyer would pay. But the headline number is not the same as the total consideration. DSO deals frequently include earn-out provisions where a portion of the purchase price is contingent on post-acquisition performance. They often include equity rollovers where the seller takes a portion of the purchase price in DSO equity rather than cash. And they almost always include a clinical commitment period, typically two to five years, during which the selling dentist continues working in the practice as an employed provider.

The question is not whether the total consideration is attractive. It is whether the total consideration, including the earn-out risk, the equity rollover terms, and the clinical commitment requirements, is the right structure for your goals.

The Individual Buyer Transaction

Individual buyers, typically dentists using SBA financing, offer a simpler deal structure. The transaction is generally all cash at closing with no earn-out and no equity rollover. The buyer is acquiring the practice to run it independently, which typically means more flexibility in transition terms and less post-sale clinical commitment required from the seller.

The trade-off is that individual buyers are constrained by SBA financing limits and their own financial capacity. For practices above $2 million in value, the pool of qualified individual buyers narrows considerably. For practices with lower profitability or higher perceived risk, SBA approval can be challenging.

What Determines Which Path Makes Sense

Practice size and profitability are the primary determinants. Practices generating above $300,000 in SDE and demonstrating strong growth trends are attractive to both buyer categories. For practices above $500,000 in SDE, DSO interest is typically strong and the premium for a clean, well-prepared practice can be meaningful.

Your post-sale intentions matter equally. An owner who wants to be clinically active for another five to seven years may find a DSO partnership structure genuinely appealing. An owner who wants a clean exit within 12 to 18 months of listing typically finds the individual buyer path more aligned with their goals.

The Preparation Variable

Both buyer categories pay more for well-prepared practices. Clean financials, documented systems, strong hygiene production, reduced owner dependency, and favorable lease terms improve outcomes regardless of which buyer type ultimately acquires the practice.

The difference is that DSO buyers can evaluate these variables quickly and adjust their offer accordingly. Individual buyers and their SBA lenders may take longer to get comfortable with the same information. Either way, preparation is the highest-leverage investment a practice owner can make before entering any transaction process.

According to research from FOCUS Investment Banking, a structured sale process often results in offers differing by 40% or more, with significant increases from initial to final offers for well-prepared sellers. The preparation that drives that difference is the same whether the buyer is a DSO or an individual dentist.

The Starting Point

Before you can make an informed decision about which exit path makes the most sense for your practice, you need to know what your practice is actually worth to each buyer category and how each category would evaluate your specific strengths and gaps.

That is exactly what the Marcaro Group Practice Valuation Assessment provides. An independent, buyer-informed analysis that tells you where you stand with both buyer types and what preparation steps would have the most impact on your outcome. Schedule a call to get started.