From Solo Practice To Scalable Legacy: What Dentists Must Know About DSOs, EBITDA, and Real-World Profit

Written by Dr. Mike Miyasaki, Chief Dental Officer

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“Dentist2Dentist”: Welcome to Dentist 2 Dentist Podcast for Dentists by Dentist and their clinical team. 🦷🎙️

The quiet crisis in private practice dentistry isn’t clinical—it’s financial readiness and operational discipline. Across thousands of practice analyses, a pattern repeats: too many owners confuse income with wealth, production with profitability, and “being busy” with building value. That gap shows up most starkly at retirement. Only a tiny fraction of dentists are truly prepared to step away, because cash flow that once fueled a lifestyle never got translated into assets that could replace their income. The conversation with Kerry Strain centers on this hard truth and then builds a practical system for changing it: treat your practice like a business, install standards, expand hygiene capacity, and view DSOs not as a magic exit but as a structured partnership that rewards leadership over time.

First, face the math. Profit isn’t free cash. You must deliberately allocate for taxes, debt reduction, retirement, and lifestyle—every month. Spend more than roughly a third of net profit, and taxes plus underfunded savings will catch up fast. Meanwhile, inflation, higher labor costs, and post‑COVID wage expectations have tightened margins. Hiring and retention now hinge on clear roles, competitive pay, and a culture of accountability. Owners have “all the responsibilities and none of the rights,” as Strain puts it, which means leadership is the job: consistent standards, honest budgets, and real reporting. If your AR aging, adjustments, fee schedules, and payroll compliance aren’t reviewed, you’re not running a business—you’re reacting to it.

Next, expand production the intelligent way. There are only two levers to grow revenue: more visits or more revenue per visit. The fastest, most reliable path for a GP office is hygiene capacity. Add one full‑time hygienist and you can often add around $600,000 in annual revenue if you already have latent demand—common in practices with underbooked hygiene despite large active patient counts. This requires reappointing nearly every patient, rigorous periodontal protocols, and better diagnostics with AI and intraoral imaging. Many offices have the patients but not the chairs, the hours, or the systems. When 50% of actives don’t make it to hygiene, you’re leaving both health outcomes and revenue on the table. Fix reappointment and collections, strengthen perio maintenance (realistically 20%+ of your base in many demographics), and use AI to surface disease you’re missing. These are blocking-and-tackling moves that directly raise productivity without adding doctor days.

Then lift revenue per visit. Get objective about fees with third‑party benchmarking, decide on PPO participation strategically, and match capacity to your chosen model. If you’ll cap hygiene at two full‑timers, accept that your active base tops out around 1,200 patients; otherwise expand hours, ops, or team to meet demand. Combine diagnostic clarity (radiographs, intraoral photos, perio charting with bleeding tracking) with simple patient communication that makes problems visible and ownership obvious. When patients see bone loss measurements and fractures, they ask you to solve them. That raises acceptance without pressure, moving comprehensive care and selective specialty services—endo, implants, aesthetics, airway—into normal flow. Bread‑and‑butter dentistry can still fund an excellent life if run with discipline, but advanced procedures add resilience when big cases are cyclical.

For owners weighing DSOs, strip out the hype. The frothy era of 5–6x cash at close is over. Today’s credible structures look like Dental Partnership Organizations: sell a majority of EBITDA (often ~60%), receive a mix of cash and holdco equity, keep working under clearly defined clinical leadership and performance standards, and retain a minority interest in local EBITDA. Your “three buckets” then stack: W‑2 associate-equivalent pay on your own production, K‑1 distributions from your remaining EBITDA share, and appreciation potential from rollover equity if the platform grows. It’s a legacy strategy, not an exit; success depends on continued same-store growth, hygiene density, and leadership stamina. DSOs are increasingly selective: stable $1.5M+ practices with strong hygiene ratios, durable teams, and systems that produce consistent EBITDA. Small, declining, exception-ridden offices are tough to place at attractive terms because debt service, taxes, and buyer risk don’t pencil out.

Whether you ever partner with a DSO or stay independent, your operating system must be the same. Define your standard of care. Set explicit goals for reappointment, collections at time of service, and perio maintenance rates. Audit daily against them with simple reports. Use AI tools to flag caries and bone loss; reconcile the findings with your charting to uncover training gaps. Align staffing with demand so hygienists feed the doctor’s schedule. Price with intention and communicate value with images and data, not jargon. 

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