36 : How a DJ Disrupted Dental Brokerage and Built the Biggest Deal Flow in the Industry

Selling a dental practice is one of the biggest financial decisions of your career and most doctors go into it blind. In this episode, we expose the hidden conflicts, the inflated valuations, and the backdoor commissions that quietly cost sellers a fortune. If you are thinking about an exit strategy for your practice now or in the next five to seven years, this conversation will change the way you look at the entire process. EPISODE OVERVIEWThis episode pulls back the curtain on the dental practice sales process with Elijah Desmond, founder of Dental Pitch, a national sell-side brokerage firm. Elijah breaks down why most dentists start preparing to sell their practice far too late, why broker valuations are often wrong, and what sophisticated institutional buyers actually look for when evaluating your life's work. You will learn how EBITDA multiples are calculated, what a quality of earnings report is and why your CPA cannot do it, how joint ventures and combination deals work, and the real math behind earn-outs. Elijah also reveals the backdoor referral fees some brokers collect from buyers without disclosing them to sellers, a gray-area practice that creates a direct conflict of interest. If you are a dentist thinking about selling, expanding, or simply protecting the value you have already built, this is one of the most actionable episodes we have ever recorded. ABOUT ELIJAH DESMONDELIJAH DESMOND is the founder and CEO of Dental Pitch, a national sell-side dental practice brokerage firm known for its transparent, conflict-free representation model. A former dental hygienist who graduated from The Ohio State University, Elijah spent years building one of the largest relationship networks in dentistry through events like Smiles at Sea, Dentistry's Got Talent, and the Dental Socials. He has successfully exited seven of his own businesses and now leads a team of mergers and acquisitions specialists who have collectively worked on thousands of dental practice deals. Dental Pitch currently manages over 25 active representation agreements and projects closing 40 or more deals per year. Elijah is also a longtime motivational speaker for high school students and serves as Vice President of Motivational Concerts, a nonprofit organization that brings motivational programming to student assemblies worldwide. DENTAL AND TECH COMPANIES MENTIONEDDental Pitch | https://dentalpitchbrokerage.com/Smiles at Sea | https://smilesatsea.comMotivational Concerts (Nonprofit) https://elijahdesmond.com/motivational-concerts/ CONTACT INFOGuest: Elijah DesmondWebsite: https://dentalpitch.com Host: Adrian LeflerWebsite: https://mysocialpractice.com/dental-marketing-expert/Email: [email protected]: 877-316-7516 👍 Subscribe for more on dental marketing, AI in dentistry, and practice growth. #SellingADentalPractice #DentalPracticeSales #DentalBrokerage #DentalPracticeValuation #EBITDA #DentalDSO #DentalPracticeGrowth TERMS & TRANSLATIONS (FOR SHOW NOTES)Selling a Dental PracticeThe process of transferring ownership of a dental practice to a buyer, which can include private practice dentists, small groups, mid-size groups, or large DSOs and private equity firms. The transaction typically involves a broker, legal counsel, and forensic accounting, and almost always includes an earn-out period where the selling doctor continues to work in the practice.EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)The net profit figure used to value a dental practice. Buyers multiply your EBITDA by a number called a multiple to arrive at the total purchase price. For a practice selling to an institutional buyer or DSO, multiples typically range from five to seven. A 20% EBITDA margin is generally considered healthy for a dental practice.EBITDA MultipleThe number multiplied by your EBITDA to determine what your practice is worth. Private practice dentist buyers often offer multiples of three to four. Institutional buyers like DSOs and private equity groups typically offer five to seven or higher. This is one of the key numbers negotiated during the sale process.Adjusted EBITDA (Add-Backs)Your true net profit after adding back personal expenses that run through the practice. Common add-backs include owner compensation above market rate, personal vehicle expenses, and other owner benefits. These are not hidden from buyers and are completely standard in dental practice transactions. Your adjusted EBITDA is the number the purchase price is based on.Quality of Earnings (QoE)A forensic accounting report that verifies the true financial health of a dental practice. Sophisticated buyers require one before closing. A QoE examines the past three years of financials, identifies real add-backs, and confirms that reported income is sustainable. Your regular CPA cannot perform this report because they lack the mergers and acquisitions expertise and independence required. Third-party firms like CLA, Bright Balance, or Tower Financial handle this.Quality of Earnings Light (LQE)A streamlined version of a full quality of earnings report, typically ordered by the sell-side broker before the practice goes to market. It validates your EBITDA and add-backs without the bank statement matching that a full QoE includes. Having an LQE done upfront strengthens your negotiating position and reduces the chance of a retrade at closing.RetradeWhen a buyer returns to renegotiate the purchase price after an agreement has already been reached. Retrades against the seller happen when collections drop during the sale process. Retrades in favor of the seller happen when collections increase, which is why staying focused on production through the entire transaction is critical.Rolling 12The trailing 12-month revenue and EBITDA figures for your practice. Buyers examine the rolling 12 closest to the closing date to assess whether the practice performance that justified the purchase price has been maintained. This is the most important financial snapshot in a dental practice sale.Earn-OutThe portion of the purchase price that is paid to the seller over time based on performance after the sale. Sellers rarely receive 100% of the agreed price at closing. A common structure is 70% at close with the remaining 30% paid over a two to three year earn-out period, contingent on maintaining collection targets. The selling doctor typically must remain in the practice for three to five years.Joint Venture (JV)A type of dental practice sale where the owner sells a majority stake (often 51% to 70%) to a group or DSO while retaining partial ownership. The selling doctor typically keeps their name on the door, maintains some clinical autonomy, and participates in future growth. Many JV sellers tell their teams they brought on a partner rather than disclosing a sale.Combination DealA variation of the joint venture where a portion of the seller's ownership stake is converted into equity in the buyer's holding company rather than paid in cash. For example, a doctor might sell 60% for cash, roll 10% into the DSO's holding company, and retain 30% of the individual practice.Sell-Side BrokerageA brokerage firm that exclusively represents the seller in a dental practice transaction. Sell-side brokers are legally and ethically obligated to act in the seller's best interest, negotiate the highest possible purchase price, and secure the best terms. This is different from brokers who accept referral fees from buyers, which creates a conflict of interest.Non-Disclosure Agreement (NDA)A legal contract that prevents the buyer from sharing any confidential information about the practice being sold. In dental practice sales, NDAs protect the seller from their team, patients, or competitors learning that the practice is on the market before the deal is closed.Non-Solicitation AgreementA legal agreement that prevents a buyer who has been introduced to a dental practice from poaching the seller's team members during or after the transaction, even if the sale does not ultimately close.Non-Circumvent AgreementA legal agreement that prevents a buyer from going around the broker to make a direct deal with the seller. This protects the broker's fee and ensures the seller cannot be approached outside of the established brokerage relationship.DSO (Dental Support Organization)A company that owns or manages multiple dental practices and provides business infrastructure such as billing, HR, marketing, and purchasing. DSOs and private equity-backed groups are typically the highest-paying buyers for dental practices valued above approximately two...