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When Should You Start Planning Your Practice Sale? A Transitions Pro Says: Earlier Than You Think

The average dentist calls a transitions professional about a year before they want out. And here’s the uncomfortable sentence from our conversation with Cameron Elrod of DDSmatch Michigan: by then, most of the ways to improve the outcome are already gone. The truly uncomfortable one came a minute later. Five Michigan dentists died this year. “Every one of them was not prepared,” Elrod told us. “Every one of them had somebody in their family dealing with the practice who had no knowledge of what to do or who to call.” Elrod has spent his whole life in dentistry — son of a dentist, brother of a dentist, working in his dad’s office at twelve, then 25 years at Patterson Dental before taking over the Michigan territory of DDSmatch, a national transitions firm that represents sellers only. What follows is his case for treating your exit like estate planning: something you build years early and hope not to need soon.

What calling early actually buys you
If you call a year out, you get brokered. Competently — but brokered. The practice is what it is, the financials are what they are, and the valuation reflects both. Call three to five years out and the levers are still attached. “If you’ve got gaps in your productivity or your practice management, we can identify those and increase your valuation,” Elrod said. “If we have time to review your financials, we can give you guidance on how to clean those up.” And there’s a softer lever: most sellers don’t actually know what they want, because they’ve never sold before. They just know they’re tired. The early questions — do you want to drop the handpiece and walk, or work two days a week for years? — take time to answer well, and the answer changes who the right buyer is. His version of “you can’t start too early”: your mid-40s is a reasonable time to sketch an exit strategy. Not because you’ll use it soon, but because of the five dentists who never got to use one at all.

The break-glass binder
DDSmatch productizes this as a seven-step workup they call the Practice Optimizer: an independent third-party valuation of the practice, a valuation of the real estate, an estate attorney’s review so nothing lands in probate, a data dive to find the gaps in the practice, and a full P&L analysis — bound into one document. Elrod describes its two jobs plainly. One: you now have a plan, and a financial planner can work backward from it — practice value plus real estate value plus nest egg tells you exactly when you can afford to sell, and if the date’s too far out, what to change now. Two: “It’s break-glass-in-case-of-emergency. Your spouse knows — something happens to me, open this book, and we’re ready to go.” Whether or not you buy anyone’s product, build the binder. Your family should not have to learn what your practice is worth from a stranger during the worst month of their lives.

The lifestyle practice is a plan, not a sin
Here’s where Elrod broke from the standard broker script, and we appreciated it. The conventional advice says never throttle down before a sale — going from five days to four to three erodes the value of the practice. His take: erosion is a choice you’re allowed to make. “Turning your practice into a lifestyle business — there’s nothing wrong with that plan,” he said. “You’ve got to know you’re eroding the endgame, and your exit options will change. It’s only wrong if it’s unexpected.” The same logic applies to the 20-year assistant you pay in the 110th percentile because she’s family: it will cost you at the valuation, and if you know that and choose it anyway, that’s a legitimate strategy. The sin isn’t the choice. It’s discovering the price of the choice at the closing table.

What actually moves the number
For sellers who do want maximum value, Elrod’s advice starts with a mindset: you are an employee of your own business, not the business itself. Owners who treat the practice as a personal checking account blur every metric a buyer will scrutinize. From there, think macro, not micro. The classic mistake is assigning staff hours to shop every supply item — real human capital spent chasing savings on a category that barely moves the valuation — while the numbers that dominate a cash-flow analysis go unmanaged: total staff cost, team productivity, dollars per chair and per hour. Two practices across the street from each other can each have five employees, with one producing three times the dentistry — that’s training and management, not headcount. And for the typical private-buyer sale, understand that the price rests on a cash-flow analysis: how much cash the practice pushes to the bottom line. Overhead erodes it directly.

The five-year equipment rule
The advice we quote most from this episode is about timing your last big investments, and Elrod’s math is all about depreciation. “Buy it five years before you sell, not one,” he said. Five to seven years out, a capital improvement fully depreciates, you get years of use, efficiency, and staff morale out of it — and at the sale, a five-year-old chair still reads as new. One year out? “It’s like putting a pool in your backyard and expecting to recapture the total value of the pool when you sell the house. It never happens.” The flip side is what waiting costs. Buyers coming out of school have never used impression material; a practice without a scanner, with 25-year-old operatories and dated fixtures, doesn’t get negotiated down — it gets dismissed, because other listings exist. Even a $5,000–$10,000 cosmetic refresh changes how the whole practice shows. As for over-improving: the seller near Traverse City who built a stunning, expensive building told Elrod he knew he’d never recapture all of it — and had happily spent 20 years working somewhere he loved. Buyers mostly want good bones and natural light anyway; 99 times out of 100 the new owner remodels the interior to make it theirs.

What a well-run sale looks like
The DDSmatch process differs from a pocket deal in ways worth knowing even if you never hire them. The valuation is done by an independent third party with no stake in the outcome — it sets a credible bar. Then the listing is broadcast to the entire buyer market under confidentiality, never quietly shopped to a favorite. In metro Detroit, Elrod says that typically produces five to fifteen letters of intent, narrowed on paper to four or five, then settled by back-to-back interviews where seller and buyer size each other up on treatment philosophy, staff, and temperament. “Almost every time, our seller comes out saying — that’s my person.” Competition also produces outcomes process can’t predict. His favorite: a seller facing illness who needed a fast exit on a $2.5 million-collections practice. Broadcasting the deal caught a DSO mid-recapitalization that urgently needed the production — and the practice sold for more than double the independent valuation, quickly, with every box on the seller’s list checked. Two mechanical points that protect everyone. Sign the asset purchase agreement several weeks before closing, so the buyer can resign and credential while the staff gets a slow, calm introduction instead of a same-day shock — done that way, Elrod rarely sees staff turnover. And keep an intermediary between the parties, because deals mostly die from tone, not terms: a buyer’s clumsy question about the practice reads as an insult to someone’s 25-year legacy, emotions spike, and $7,000 to $15,000 of attorney work evaporates over a misunderstanding.

Everyone at the table needs their own person
Elrod represents sellers only, and he’s blunt about the alternative: “Dual representation is not healthy for the deal. Each party needs somebody that has their back.” He’s happier when the buyer walks in represented too — he’s watched clean deals nearly collapse in the eleventh hour over a lease negotiation the buyer tried to handle alone. That’s the seat we occupy, so take our agreement with the appropriate grain of salt. But the principle costs nothing and is worth everything: whichever side of a transition you’re on, know who is paid to protect you, and make sure someone is. Asked what his wife would say he does, Elrod didn’t say “sells dental practices.” He said she’d say he changes lives — because she’s heard the calls at the end, when someone exits on their terms with their legacy intact. That’s the version of this worth planning for, and the planning starts years before the listing. The full conversation with Cameron Elrod is on the Dentelligentsia podcast. And when the plan involves the building — valuing it, selling it, or making sure your lease doesn’t complicate your exit — talk to us.