Can You Sell Your Dental Practice and Continue Working?

Quick Answer

Yes. A dentist can sell a practice and continue working clinically if the transaction and post sale professional arrangement are structured correctly. The sale agreement transfers the agreed business value, while a separate employment, independent contractor or professional services agreement defines the dentist’s clinical role after completion.

This approach is often called sell and stay. It can give the owner a financial exit from ownership while preserving the part of dentistry they still enjoy. It can also help the buyer retain patient trust, production, referrals and clinical continuity.

Why would a dentist sell but keep practising?

Ownership and clinical practice are different jobs. Many owners still enjoy diagnosis, treatment and patient relationships but no longer want responsibility for payroll, compliance systems, billing, marketing, recruitment, equipment, debt and daily management.

A sell and stay arrangement may help an owner:

1. Release capital tied up in the practice.
2. Reduce personal financial concentration.
3. Transfer administration and ownership risk.
4. Continue earning clinical income.
5. Support staff and patients through a gradual transition.
6. Reduce working days over time.
7. Prepare for retirement without an abrupt stop.

The model is not suitable for everyone. An owner who wants complete freedom immediately may prefer a short handover and full exit. An owner who still wants final control over every commercial decision may find post sale employment frustrating.

Why would the buyer want the seller to stay?

The seller often carries knowledge and relationships that do not transfer through documents alone. Patients may have chosen the practice because of the owner. Staff may rely on the owner’s leadership. Referral relationships and treatment plans may also be personal.

A continuing seller can:

1. Introduce the buyer and new leadership.
2. Complete ongoing treatment.
3. Maintain revenue during integration.
4. Transfer clinical and operational knowledge.
5. Reassure staff and patients.
6. Help recruit or mentor other practitioners.
7. Reduce the risk of an immediate patient decline.

For these reasons, some buyers make part of the purchase price conditional on the owner remaining or the practice maintaining performance. This can align interests, but it can also shift risk back to the seller.

How long can the seller continue working?

The period can range from a few months to several years. There is no universal correct term.

A short period may be enough where the practice has other established clinicians, a strong manager and low owner dependence. A longer period may be appropriate where the owner contributes a large share of revenue, handles complex cases or wants to continue clinically.

The agreement should define:

1. A fixed term or review dates.
2. Minimum and maximum working commitments.
3. A reduction schedule if hours will taper.
4. Notice and termination rights.
5. What happens if illness or disability prevents work.
6. How departure affects deferred purchase payments.

Avoid open ended expectations. Both sides should know how the clinical relationship can end without reopening the entire sale.

Will the dentist be an employee or independent contractor?

Either may be proposed, but the label alone does not determine the legal or tax position. The real working relationship, control, hours, integration, financial risk and statutory tests matter.

An employment arrangement may provide clearer working hours, leave and organisational support. A contractor arrangement may offer more flexibility but can place more responsibility on the practitioner for tax, insurance, expenses and scheduling.

The structure must also align with HPCSA ethical requirements, billing arrangements and clinical accountability. Obtain employment and tax advice before choosing the model.

How is the dentist paid after the sale?

Clinical remuneration can be a salary, a percentage or commission based arrangement, a fee per session, a production or collection based formula, or a combination. The important issue is the definition.

Clarify:

1. Whether the calculation uses invoiced production or collected revenue.
2. How laboratory, material, bad debt and refund costs are treated.
3. When payments are calculated and made.
4. How medical aid delays and write offs affect the amount.
5. Whether rates differ by treatment or location.
6. Who controls fees, discounts and appointment allocation.
7. Whether a minimum guarantee applies during transition.
8. How leave and non clinical responsibilities are compensated.

A simple sounding percentage can produce disputes if the cost base and collection rules are vague.

What is an earnout and how does it affect continuing work?

An earnout is a portion of the purchase price paid later if agreed performance conditions are met. Measures may include revenue, collections, EBITDA, patient retention or the seller remaining for a defined period.

Earnouts can bridge a valuation gap, but they create risk because the buyer controls many decisions after completion. Staffing, marketing, fees, scheduling, procurement and accounting policies can all affect performance.

Before accepting an earnout, agree:

1. The exact metric and accounting policy.
2. The measurement period.
3. The seller’s access to reports.
4. Which actions the buyer may or may not take.
5. Treatment of new locations, practitioners and central costs.
6. What happens during illness, leave or buyer breach.
7. Dispute resolution and independent verification.
8. Whether the earnout accelerates if the buyer resells the practice.

Do not confuse clinical remuneration with purchase price. They are paid for different reasons and should be documented separately.

Will you still control clinical decisions?

Registered practitioners remain responsible for clinical care and must maintain professional independence. The buyer may set business systems and governance standards, but it should not improperly dictate diagnosis or treatment for commercial reasons.

Discuss practical scenarios before signing:

1. Who approves treatment plans?
2. Who selects laboratories and materials?
3. How are clinical complaints reviewed?
4. How are appointment targets set?
5. What happens if the dentist disagrees with a commercial policy?
6. Who is responsible for record keeping and informed consent?
7. How are peer review and quality assurance managed?

The answers should be consistent with the Health Professions Act, HPCSA Ethical Rules and Business Practice Policy.

What happens to the owner’s management authority?

Sale usually means the buyer gains agreed control over the business. The former owner may remain clinically influential without retaining the final say on budgets, staff appointments, supplier choices, marketing or strategy.

This change can be emotionally difficult. The seller may feel responsible for the practice but no longer have authority to act. A clear role description helps prevent informal interference and conflicting instructions to staff.

If the seller retains a partial interest, governance rights may continue. These must be documented in shareholder, partnership or other appropriate agreements. Do not assume that a retained percentage creates a veto.

What should happen to staff after the sale?

The team should know who leads the practice, who handles clinical issues and who makes employment decisions. A former owner who continues to give management instructions without formal authority can undermine integration.

Where a business transfers as a going concern, section 197 of the Labour Relations Act may apply. The buyer and seller should obtain advice on the transfer of employees, benefits, leave, liabilities and consultation.

Plan communication carefully. Patients and staff need confidence that the seller is staying, but they also need an honest explanation of the change in ownership and leadership.

How should patients be told?

Patient communication should be clear, calm and focused on continuity. It can explain that the practice has joined a new ownership or group structure, that the dentist will continue treating patients and that clinical records and care remain protected.

Avoid marketing claims that cannot be guaranteed. Confirm who patients should contact about ongoing treatment, accounts, complaints and record requests. If branding will change, use a transition period where appropriate.

The communication plan should respect POPIA and professional confidentiality. A business sale does not turn patient records into an unrestricted marketing list.

What happens if the relationship stops working?

The documents should deal with a breakdown before it happens. Consider:

1. Ordinary notice by either party.
2. Immediate termination for professional misconduct or serious breach.
3. Illness, disability or loss of registration.
4. Unpaid remuneration.
5. Disagreement over clinical independence.
6. Buyer sale or change of control.
7. Treatment of outstanding earnout and deferred price.
8. Access to records needed for professional defence.
9. Patient communication after departure.
10. Restraint and non solicitation.

A sale should not leave the former owner trapped in an unworkable job merely to protect deferred payments.

How restrictive should a restraint be?

Buyers often request restraints to protect the goodwill they purchased. The seller should expect reasonable protection against immediately reopening nearby and soliciting the same patients or staff.

The restraint should still be proportionate in area, time and activity. A dentist who intends to continue working must understand whether the restraint prevents future practice if the buyer ends the relationship.

South African restraint law is fact specific. Obtain legal advice and negotiate a practical carve out for agreed clinical work, teaching, locum work or later relocation where relevant.

Can you retain the practice property?

Yes. The seller may retain the building and lease it to the buyer. This can create long term rental income while separating property ownership from practice ownership.

The lease should address term, renewal, rent reviews, maintenance, dental improvements, equipment, signage, compliance, security and what happens if the practice is resold. The rent should be commercially supportable because excessive rent can reduce practice earnings and create conflict with valuation or earnout calculations.

How does Mia’s sell and stay model work?

Mia Healthcare states that sell and stay clinically is its preferred acquisition structure. The intended outcome is for the owner to achieve a financial exit while continuing to practise with a clinician led group.

Mia says the deal can consider:

1. Full or partial acquisition.
2. Upfront and earnout components.
3. The period the owner wants to remain.
4. Clinical remuneration after sale.
5. Property sale, retention or lease arrangements.
6. Team continuity.

Owners can approach Mia directly or use selected Mia Practice Services before a possible acquisition. The final structure depends on due diligence, value, fit and professional advice.

How do you decide whether sell and stay is right for you?

Ask yourself:

1. Do I still enjoy clinical dentistry?
2. Can I work within someone else’s ownership structure?
3. How many days do I want to work in one, three and five years?
4. How much of the purchase price am I willing to place at risk?
5. Do I trust the buyer’s leadership and systems?
6. Is my continuing role necessary for value, or genuinely my choice?
7. What happens if my health or family needs change?
8. Am I comfortable with the proposed restraint?

If the answers are uncertain, negotiate a shorter commitment, more cash at completion and a clear exit mechanism.

What should you do next?

Write a proposed post sale job description before discussing price. Include your ideal schedule, term, duties, remuneration, clinical autonomy and final exit date. This helps you test whether the buyer is offering a real financial exit or only changing the form of your responsibility.

Learn more at www.mia-healthcare.com or WhatsApp Dr Zane Stenning on +27 65 536 1760 for a confidential conversation about sell and stay options.

Important note: This article provides general information, not legal, tax, employment, valuation or financial advice. Sale and post sale clinical agreements should be reviewed together by appropriately qualified advisers.