Ready to Sell? Your Roadmap Starts Here
Selling your OMS practice is a defying milestone in your career. When done thoughtfully, it turns years of hard work into personal freedom, financial security, and the chance to see your legacy carried forward. Rushed or unplanned, though, it can leave money on the table, disrupt your referral base, and create avoidable stress for you and your team.
This guide is designed to walk you through the key decisions, timing, and common pitfalls—so you can move toward a sale with confidence and peace of mind.
1) Start With “Why” (and When)
Common motivations
- Retirement or semi-retirement
- Desire to shed management burden and focus on surgery
- Geographic move or health considerations
- Capitalizing on strong financial performance/market demand
- Succession planning for patients, staff, and referrals
Timing cues
- 3–5 years out: best for grooming a successor, stabilizing metrics, maturing referral lines, and optimizing financials.
- 12–24 months out: enough time to clean up add-backs, renegotiate key contracts, and normalize staffing.
- Under 12 months: still very doable—just be surgical about preparation.
2) Know What Buyers Actually Buy
Buyers purchase future, transferable cash flow supported by systems—not just your personal production. They’ll scrutinize:
- Financials: 3 years of P&Ls and tax returns, current YTD, production/collections by provider, payer mix, case mix, AR aging.
- Quality of earnings: Add-backs (owner comp above market, family wages, one-time expenses, non-recurring CE or equipment).
- Operational stability: Referral concentration, schedule utilization, no-show rates, conversion rates, implant/third molar volumes.
- Team & contracts: Compensation structure, benefits, turnover, restrictive covenants, associate agreements.
- Facilities & tech: CBCT, implant systems, EMR/PM, sedation/OR setup, instrument condition, compliance logs.
- Risk items: Lease terms/assignability, payer contracts, licensure/permits, malpractice/tail, OSHA/HIPAA readiness.
Note: Most OMS practices are valued on a multiple of normalized EBITDA (earnings before interest, taxes, depreciation, amortization) or a percentage of collections adjusted for profitability. Preparation = better multiple.
3) Your Exit Pathways (and Trade-Offs)
| Path | Who It Suits | Pros | Cons |
| Associate buy-in / private OMS | Owners prioritizing legacy and control | Cultural continuity; smoother patient/referral handoff; flexible terms | Often lower headline price; longer payout; more owner involvement |
| Independent buyer (solo doc) | Strong market demand areas | Cleaner exit; often faster close | Financing & credentialing can delay ramp; succession risk if they stumble |
Tip: Don’t decide by price alone. Term sheet structure (cash vs. earn-out vs. equity rollover), post-close role, and covenants often matter more than the top-line number.
4) Clean Financials: The Fastest Path to a Better Multiple
- Normalize owner comp: Set to market and move extras to add-backs.
- Eliminate non-recurring spending: Document one-time costs (e.g., remodel, unusual legal fees).
- Stabilize overhead: Aim for predictable supplies, implants, and staffing ratios.
- Tighten AR: >90-day bucket should be minimal; consider small AR holdback arrangements at closing.
- Inventory & implants: Count and document. Expired inventory is a buyer discount.
5) Fortify the Practice “Without You”
Buyers pay up when the practice performs on any competent surgeon’s hands:
- Protocols: Written sedation, implant, extraction, and emergency protocols; preference cards; ordering SOPs.
- Scheduling: Templates for high-value blocks; referral triage standards; coverage calendar.
- Referral engine: Relationship map, contact cadence, study clubs, referral feedback loops, co-branded patient education.
- Marketing: Clean, accurate web presence; online reviews; simple patient intake; SEO for “wisdom teeth,” “dental implants,” “IV sedation.”
- Leadership: Empowered office manager; cross-trained staff; current job descriptions; KPI dashboard.
6) Legal & Regulatory Essentials (Don’t Wing These)
- Entity & cap table: Clear ownership and any prior liens/encumbrances.
- Lease: Years remaining, options to extend, and assignment clause—critical for a sale.
- Provider agreements: Restrictive covenants; assignability; any promises to partners/associates.
- Payer contracts & credentialing: Understand transferability vs. re-credentialing timelines.
- Licenses & permits: Sedation permits, DEA, radiation, biomedical waste, CLIA (if applicable).
- Malpractice insurance: Tail coverage quotes before you sign a LOI.
- Compliance: HIPAA, OSHA logs, sterilization documentation, anesthesia records. Fix gaps now; they surface in diligence.
Note: This is business guidance, not legal/tax advice—retain qualified counsel and an OMS CPA.
7) Build a Data Room Before You Go to Market
Organized sellers control the process. Create a secure folder with:
- Corporate documents: articles, bylaws/operating agreement, minutes, ownership schedule
- Financials: 3 years P&Ls/tax returns, general ledger, production/collections reports, AR/AP aging reports
- HR: roster, roles, comp/benefits, signed agreements, handbook
- Contracts: lease, equipment, IT, service agreements, vendor pricing
- Clinical/compliance: permits, policies, logs, incident reports
- Equipment list: model/serial numbers, service history, warranties
- Referral analytics & marketing overview
- KPIs: monthly trend lines for new referrals, surgeries, implants, case acceptance
8) Your Sale Timeline (Typical)
Months 0–2: Prep
- Quietly select your advisory team (broker or banker, healthcare attorney, CPA).
- Normalize financials; assemble data room; get a preliminary valuation.
- Refresh website/Google Business Profile; tighten AR.
Months 3–4: Go to Market
- Discreet outreach under NDA; manage inquiries; provide a light CIM (confidential info memo).
- Initial Q&A; site visits after business hours; maintain confidentiality with staff/referrers.
Months 5–6: LOI & Diligence
- Compare LOIs beyond price (deal structure, employment terms, non-compete radius/years, working capital, AR/AR holdbacks).
- Full diligence: financial, legal, compliance, IT/security, HR.
Months 7–8: Definitive Agreements & Close
- Paper the deal (APA vs. stock, schedules, reps & warranties).
- Credentialing/assignments, lender approvals, tail quotes, lease assignment.
- Pre-close communication plan for staff and referrers; day-one checklist.
9) Communications: Protect Morale and Referrals
- Staff: Inform key leaders shortly before close under confidentiality; all staff at or immediately after close with clear benefits and job continuity.
- Referrers: Personalized outreach from you: “same team, same access, improved resources.” Offer an easy referral pathway and quick consult access.
- Patients: Website, voicemail, and front-desk script emphasizing continuity of care.
10) Deal Structure Terms That Move the Needle
- Cash at close vs. earn-out: Earn-outs can bridge valuation gaps but require clear, achievable metrics you control.
- Equity rollover: In a group/DSO deal, a minority rollover can capture second-bite upside; understand liquidity horizon and governance.
- Working capital peg: Define what stays in the business; avoid surprises at closing.
- Non-compete & non-solicit: Keep radius/term reasonable for your market and future plans.
- Post-close role: Full-time, part-time, or transition-only—price and multiple often hinge on this.
11) Taxes & Proceeds Planning
- Asset vs. stock sale: Asset sales are common in healthcare; buyers prefer them; sellers consider tax impact on goodwill vs. hard assets.
- Allocation schedule (IRS Form 8594 in the U.S.): Negotiate intelligently—goodwill allocations often benefit sellers.
- Retirement planning: Coordinate proceeds with your broader plan (qualified plans, 401(k) profit sharing, defined benefit plan timing).
- Estate & asset protection: If relevant, pre-sale trust and entity work before LOI may optimize outcomes.
12) Post-Close: Make Your First 90 Days Boring (In a Good Way)
- Keep clinical protocols, scheduling, and referral access unchanged initially.
- Honor your availability promises (emergencies, call coverage, quick consults).
- Over-communicate with staff; weekly huddles focused on throughput, patient experience, and referral responsiveness.
- Track KPIs and address friction fast.
Seller Readiness Scorecard (Quick Self-Assessment)
Score yourself 1–5 on each (5 = rock-solid):
- Clean, normalized financials and documented add-backs
- Assignable lease with ≥5 years (including options)
- Stable referral base with no single source >15% of cases
- Documented SOPs, sedation protocols, and compliance logs
- AR current (minimal >90-day) and tight front-end collections
- Updated equipment list; no major deferred maintenance
- Organized data room ready to share under NDA
- Clear post-close plan for your role (full-time/part-time/transition)
35+ points: market-ready. 28–34: 3–6 months of prep will pay off. <28: prioritize cleanup before marketing.
Common Pitfalls to Avoid
- Announcing too early to staff/referrers (creates anxiety without answers)
- Letting production dip during diligence (buyers notice)
- Ignoring lease assignment language until the week of closing
- Over-promising in an earn-out you can’t control
- Forgetting tail malpractice or underestimating its cost
- Hand-wavy add-backs (document everything)
A Simple Pre-Market Checklist
- Engage healthcare attorney + CPA (and broker/banker if desired)
- Normalize financials; document add-backs; tighten AR
- Confirm lease assignability and options
- Update compliance logs; verify permits and licenses
- Build data room (see Section 7)
- Draft confidential info memo (CIM)
- Define your ideal post-close role and deal terms
- Identify 3–5 key metrics to keep stable during the process
Final Word
You’ve built a valuable practice that serves patients and a community of referrers. The right sale—on your terms—should protect that legacy, reward your effort, and set up the next chapter (whether that’s a beach, a back-nine, a new venture, or just fewer admin headaches). Thoughtful preparation turns a complex process into a confident handoff.
If you would like more information about who we are and the services we provide, visit our website: www.omspracticesales.com and/or email: scott@omspracticesales.com
