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Do Dentists Need a Business Prenup: Lessons from a DSO Partnership Dissolution
Why Dentists Need a Business Prenup: Lessons from a DSO Partnership Dissolution with Richard Low on Just a Couple of Dentists.
When we think about prenuptial agreements, we typically think about marriage. But according to Richard Low – @rlow – founder of the Shared Practices podcast, there’s another type of relationship that desperately needs a prenup: dental business partnerships that he shared during an interview with @ericappelsies
A Tale of Three Practices:
In 2019, while still serving in the military, Richard found himself eyeing an interesting opportunity: three dental practices for sale in Indianapolis. There was just one problem – no bank would finance him. As he puts it, “I was a bundle of red flags.” The solution? Partnering with a growing DSO, Guided Practice Solutions (GPS).
The partnership started promisingly. The practices were profitable, the existing doctors were solid, and GPS provided excellent operational support. But about two years in, Richard had an epiphany during a walk around Eagle Creek: this wasn’t the path for him.
Why Good Partnerships Still Fail
Even with great partners, businesses can fail for legitimate reasons. In Richard’s case:
1. The daily challenges of running multiple practices became overwhelming. As he notes, “Any given practice has problems with team members, stuff breaking, fires to put out… when you have three offices, you multiply that risk by three.”
2. Managing doctors proved more challenging than expected. While most doctors were excellent, the difficult ones could make “everyone’s life miserable.”
3. His entrepreneurial vision didn’t align with the DSO model. Richard wanted to build and innovate, but the practices needed steady-state management.
The Amicable Divorce
Here’s where things get interesting – and where having a business prenup would have been invaluable. Richard and GPS had to figure out how to:
– Separate shared practice loans
– Handle non-compete agreements
– Divide equity
– Manage the transitionWithout a predetermined exit framework, they explored seven different dissolution options before finding one that worked. Fortunately, both parties maintained professionalism throughout the process, avoiding legal battles and keeping discussions collaborative.
The Business Prenup Every Dentist Needs
The key lesson? As Richard emphasizes, “No matter what your intentions are when you first partner up, stuff happens. You might break a leg, have a midlife crisis, or face any number of unexpected challenges. There needs to be a clear process for what a breakup looks like.”
A solid business prenup should outline:
– Specific steps for partnership dissolution
– Options for handling shared debt
– Partner buyout procedures
– Non-compete agreement terms
– Asset division protocols
– Refinancing processesThe Bottom Line
While Richard’s story had a happy ending – GPS refinanced the debt, took over the practices, and released him from non-competes – not all partnership dissolutions go so smoothly. The lack of legal battles wasn’t due to having good agreements in place; it was due to having good partners who remained professional.
Don’t rely on luck. Whether you’re considering joining a DSO, bringing on a partner, or merging practices, invest the time and money upfront to create comprehensive partnership agreements. As Richard’s experience shows, the best time to plan for a business breakup is before the partnership begins.
podcasts.apple.com
Why ALL dental partnerships need a PRE-NUP! (with Dr. Richard Low)
Podcast Episode · Just a Couple of Dentists · 02/18/2025 · 30m
I am a general dentist and founder of Proximal Contact, LLC where we operate:
American Dental News, Embrasure Space, DentWoo. -
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Thanks for sharing Chance! This episode was so much fun to record with Richard! We had to split it into two parts because we went over an hour long!
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Awesome! I’ll add part 2 to the thread when it airs.
I am a general dentist and founder of Proximal Contact, LLC where we operate:
American Dental News, Embrasure Space, DentWoo.
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Solid interview. I’ve been listening to Richard podcast for years. I didn’t know he wasn’t practicing clinically anymore. He’s probably had a pretty unique career arc.
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Thanks. I posted a few podcast episodes into the forums today. I’ll try to do one a week, but no promises.
I am a general dentist and founder of Proximal Contact, LLC where we operate:
American Dental News, Embrasure Space, DentWoo.
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Part II of this podcast series was recently released: https://podcasts.apple.com/us/podcast/why-all-dental-partnerships-need-a-pre-nup-part-2/id1782713047?i=1000694332363
podcasts.apple.com
Why ALL dental partnerships need a PRE-NUP! - Part 2 (with Dr. Richard Low)
Podcast Episode · Just a Couple of Dentists · 02/20/2025 · 31m
I am a general dentist and founder of Proximal Contact, LLC where we operate:
American Dental News, Embrasure Space, DentWoo.
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