Selling your dental practice to a current associate or partner may seem like the natural next step, but without the right preparation, it can become a challenging and emotionally charged experience. In this 30-minute webinar, Dave Miller, Managing Partner at Rosen Dental Transitions, walked attendees through the complex landscape of associate and partner buy-ins, offering practical insights and strategies for creating successful outcomes.
Why Planning (and Leverage) Matters
Too often, sellers approach associate deals without a strong grasp of their options, which limits their leverage during negotiations. Dave stressed the importance of understanding your practice’s true market value and preparing transition strategies long before you start talking sale terms. He introduced Rosen Dental Transitions’ full suite of services, including valuations, market feedback, and deal structuring support.
The Associate Dilemma: Loyalty vs. Entitlement
A recurring challenge: associates who feel entitled to a discount because of their role in building up the practice. While their contributions are real, Dave reminded sellers that it’s the owner who took the risk, built the infrastructure, and created the platform that enabled associate success. He shared that modest discounts may be appropriate as goodwill gestures, but emphasized this is a seller’s choice, not an obligation.
Partnership vs. Full Sale
Dave broke down the key differences:
- Partnerships are best for owners who intend to remain in the business for at least five more years.
- Full sales with post-sale employment are often cleaner, especially when the seller is eyeing a shorter-term exit.
He warned against rushed or emotional decisions, such as selling based on ultimatums from associates or granting small equity percentages without a solid long-term plan.
Key Takeaways for Sellers
- Regular Conversations: Begin future-ownership discussions early and often.
- Formal Agreements: Use NDAs before sharing details with associates.
- Get Valued: Secure a formal valuation before entering negotiations.
- Keep Options Open: Explore market interest beyond the associate.
- Know Your Numbers: Understand fair market rent if real estate is involved.
- Partner with Experts: Work with CPAs and legal advisors on asset vs. stock deal implications.
Financing the Buy-In
Bank financing is often a better option than seller-financing when structuring a buy-in. Lenders will finance partnership buy-ins and 100% purchases with no money down. However, Dave pointed out the tax implications of stock vs. asset sales and encouraged both parties to consult with their accountants early in the process.
Additional Resources
All of our webinars, including this one, are available to watch free, alongside articles, podcasts, and tools to support your transition journey. If you’re considering a move, contact us to connect with professionals in our network—from tenant-only real estate advisors to appraisers and dental-specific attorneys.
Private Events for Selling Your Practice
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