Short answer: selling to a DSO gives you a large check now, but holding your profitable practice keeps years of owner earnings and still leaves a sale for later — and for many dentists with runway left, the math of holding can beat selling out. It’s not always true, but it’s true often enough that you should run the numbers before assuming the big check wins.
What are you really comparing?
The DSO offer is easy to see — a big number today. What’s harder to see is what you give up: the years of owner profit you’d keep by holding, minus the reduced employment income you’ll earn after selling. The honest comparison isn’t “big check vs. nothing” — it’s “big check now vs. a stream of owner earnings plus a sale later.”
A simple framework for the decision
- Value of selling now: after-tax cash at close + risk-adjusted value of any rollover equity/earnout + your post-sale employment income.
- Value of holding: the owner profit you’d keep each year you continue + the after-tax value of a sale down the road.
- The key gap: as an owner you earn full profit; as a DSO employee you earn a salary. That difference, multiplied by the years you’d keep working, is the real cost of selling early.
- Adjust for risk, taxes, your energy for ownership, and how much you value certainty vs. upside.
When does selling to a DSO make sense?
- You’re near the end of your career and want to de-risk and step back.
- Burnout, health, or life changes make continued ownership unappealing.
- The offer (especially guaranteed cash) is strong relative to your practice’s standalone value.
- You value certainty and simplicity over squeezing out maximum lifetime dollars.
- You genuinely want the operational support and scale a DSO provides.
How should you actually decide?
Run the numbers both ways — after tax, over your realistic remaining career — and weigh them against the non-financial factors only you can judge: your energy for ownership, your appetite for risk, and what you want your next chapter to look like. This is exactly the kind of deal-specific modeling we do alongside your CPA when you’re weighing an offer. The goal is a decision you make on purpose, not one driven by the size of the check.
Frequently asked questions
It depends on your runway, health, and goals — but for many dentists with years left, holding can produce more total wealth, because you keep full owner profit each year and can still sell later, whereas selling now converts future profit into a lump sum and pays you a smaller salary to keep working. Model both after-tax before deciding.
Because as an owner you keep the full profit, while after a DSO sale you typically earn employee-level compensation for the same work. Over several remaining career years, that difference — plus the ability to still sell later — often outweighs the upfront check. It’s not universal, so it should be modeled for your situation.
Sources
Founder & Financial Planner · Investment Adviser Representative · Series 63 & 65
Ian McGinnis is the founder of Dental Wealth Partners and a fee-only financial planner dedicated to dentists. As an investment adviser representative (Series 63 and 65), he built the firm to give dentists coordinated, fiduciary advice across their practice, taxes, investments, retirement plans, and long-term goals — the whole picture in one strategy. A graduate of Belhaven University, Ian previously worked at Davis Private Wealth, MML Investors Services, and Northwestern Mutual, and is based in the Jackson, Mississippi area. He is the author of The Wealthy Dentist and hosts the Smiles & Cents podcast.
Keep reading
- DSO deal structures: how buyout and transition models workDSO deals rarely mean all cash. Equity rollover, joint ventures, earnouts, and recapitalizations — how the common DSO buyout models actually work.
- Types of DSOs, explainedNot all DSOs are alike — from large corporate groups to “invisible” affiliation models and dentist-led groups. How the types differ on autonomy and structure.
- How to evaluate a DSO or private-equity offerA framework for dentists weighing a DSO or private-equity offer — understanding deal structure, after-tax proceeds, and life after a sale.