Episode 35 of The Dental Domination Podcast welcomes financial advisor Derek Strong for an insightful conversation on transition planning, legacy, and how dental practice owners can maximize value and protect their financial future.
DISCLAIMER: Derek Strong is an Investment Advisor Representative offering Securities and Advisory Services through United Planners Financial Services, Member FINRA/SIPC. United Planners is not affiliated with Hemingway Wealth Management or any other entities referenced. This is meant for educational purposes only. Listeners should consult a financial professional before making investment decisions. The S&P 500 is an unmanaged index and cannot be invested into directly.
Why Legacy Planning Matters Now More Than Ever
The dental profession is in the midst of rapid transformation. From the rise of private equity to the consolidation of group practices and DSOs, the landscape is shifting—and with it, the way practice owners need to think about their future. Many dentists are now facing critical questions:
- When should I start planning my exit?
- How can I get the best value for my practice?
- What happens to my legacy, my team, and my family?
These are exactly the kinds of questions Derek Strong helps his clients answer. In this episode, Derek shares his insights into how dentists can proactively plan their transition, reduce financial risk, and ensure they’re not caught off guard when the time comes to move on.
Meet Derek Strong
Derek Strong is a financial advisor with Hemingway Wealth Management who specializes in serving healthcare professionals, particularly dentists and dental practice owners. Based in Minnesota, Derek brings a national perspective and a deep appreciation for small business strategy. His passion lies in working with practice owners to develop sound financial plans that align with their goals—both professional and personal.
“When you run a small business, you’re responsible for everything,” Derek explains. “At some point, you’ve got to decide what you’re going to keep handling yourself and what you can hand off.”
It’s not just about investment management. Derek emphasizes the importance of strategic planning, understanding your “why,” and making sure your business can eventually thrive without you at the center of it.
Start With the End in Mind
Clarify Your Goals
When a dentist comes to Derek and says, “I’m thinking of retiring in five years,” the first step isn’t about valuations or buyers. It’s about mindset.
- Why do you want to exit?
- What does your ideal retirement look like?
- Do you want to slow down or step away entirely?
- Are you hoping to pass the practice to an associate, sell to private equity, or partner with another owner?
Build Around Your Vision
Once you have clarity on your goals, you can begin to align your business strategy accordingly. That might mean:
- Hiring and mentoring an associate
- Improving systems and operations
- Buying the building your practice occupies
- Creating partnerships with other local providers
Understand the Time It Takes
Even if you’re five years out from exiting, now is the time to start preparing. Derek notes that many transitions—especially those involving internal sales to associates—can take that long to complete.
Maximize Value and Reduce Risk
Invest in Operational Efficiency
To make your practice attractive to buyers, Derek recommends working with dental-specific consultants and coaches to optimize workflows, increase profitability, and reduce reliance on you, the owner.
“If you build your practice to be efficient and valuable even if you don’t sell, then you’re just running a better business overall,” Derek says.
Diversify Your Assets
One of the biggest risks Derek sees is overconcentration. Many dentists have 90% or more of their net worth tied up in their practice. That creates vulnerabilities in times of crisis—like economic downturns or personal emergencies.
Instead, he recommends exploring:
- Rental property investments
- Broader retirement accounts
- Passive income streams outside the practice
Don’t Wait Too Long
Burnout can creep in quickly. If you wait until you’re emotionally done, you may find yourself unprepared for the multi-year runway required for a smooth transition. Planning ahead gives you more control and better outcomes.
Protect Your Legacy With Estate Planning
Estate planning isn’t just for the ultra-wealthy. Everyone has an estate—even if it’s just a car, a house, or the contents of your practice. Derek urges practice owners to get the basics in place:
- Set up a will or trust to ensure your assets pass to the right people efficiently
- Designate who would take over the business temporarily in the event of death or disability
- Secure life insurance to protect your family and team financially
Think About Contingency Plans
“If something happened to you tomorrow,” Derek asks, “would your spouse, staff, or partners know what to do next?”
A written succession plan—whether it involves selling shares, naming an interim operator, or activating a buy-sell agreement—is critical to ensuring your practice, and everyone who depends on it, isn’t left in chaos.
Practice Valuation: What’s Your Business Really Worth?
Putting a price tag on your practice can feel daunting, but it’s a vital step in any transition plan. Derek recommends bringing in a dental-specific valuation expert to assess your:
- EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)
- Real estate and equipment assets
- Staff and operational structure
- Market demand in your region
Valuation isn’t just about selling—it’s also about identifying areas for improvement that can boost your long-term return.
Where to Begin Today
If you’re a dental practice owner and haven’t yet thought through your exit strategy, Derek offers this advice:
- Get clear on your personal goals. What kind of life do you want after practice ownership?
- Use tools to explore your options. Derek suggests even using tools like ChatGPT or Perplexity to ask questions and sketch out your thoughts.
- Build a trusted team. That might include a financial planner, a dental CPA, a business coach, and a valuation expert.
“It doesn’t have to be overwhelming,” Derek reassures. “It just starts with one conversation.”
TL;DR – Episode 35 Recap
Key Takeaways:
- Start legacy and exit planning early—ideally 5–10 years out.
- Understand your personal goals before building a transition strategy.
- Avoid overconcentration of wealth in your practice; diversify income sources.
- Invest in practice efficiency and leadership to maximize sale value.
- Have an estate and contingency plan in place to protect your family and staff.
- Hire experts to perform a practice valuation and guide you through the process.
Want to future-proof your practice and legacy?
Schedule a free strategy call with the DentalScapes team today. We’ll help you scale your new patient growth, improve your marketing ROI, and position your practice for a strong and successful transition—on your terms.