The Exit You Don’t See Coming: Designing Options Before You Need Them (E.162)

“What you don’t want to do is hit that eject button or hit the retirement button before it’s time.”
– Kyle Francis

Brief overview of the episode

Victoria Peterson sits down with Kyle Francis, Founder and President of Professional Transition Strategies, to talk about the exit that blindsides practice owners. Not because the practice is failing, but because pressure quietly stacks up until one day you want out.

Kyle breaks down what creates that pressure, how the buyer market actually works, and what to build now so your future move is a choice, not a rescue.

What This Episode Reveals

• Most exits are triggered by stress, not strategy.
• If you wait until you want out, your options narrow fast.
• The bigger the practice gets, the smaller the pool of individual buyers becomes.
• Options are not luck. Options are designed.
• A smart transition plan is built while things are still stable.

What You’ll Learn

• The warning signs that predict a rushed exit
• The most common stress triggers that push owners toward a sale
• Why buyer affordability shapes your timeline and your leverage
• How to design multiple pathways: individual, group, or private equity
• What to do now so you can step back without burning it down

If This Sounds Familiar

• “I’m not failing, I’m just tired.”
• “HR issues are draining my focus.”
• “If one key person leaves, the whole week collapses.”
• “I don’t want to sell, I just want the pressure off.”
• “I built something valuable, but I’m not sure what my real options are.”
• “I keep thinking, what if I had to make a move sooner than planned?”

Guest

Kyle Francis, Founder and President of Professional Transition Strategies (PTS)

Kyle has represented sellers in the sale of 400+ dental practices and has generated over $2B in total deal flow for clients. He specializes in giving owners real transition options across individual buyers, groups, and private equity so the exit fits the owner’s goals, not just the market’s default.

Next Steps

• Start with the free assessment meeting so you can see your practice accurately.
  Book here: https://calendly.com/productivedentistacademy/coaching-session?utm_source=IGP-Website&month=2026-02
• If you want help seeing your practice accurately, book a 30-minute clarity call: Investmentgradepractice.com (Victoria holds five spots per week).
• Want a complimentary practice valuation with Professional Transition Strategies (PTS)?
  Learn more: https://professionaltransition.com/valuation/
• Reach Kyle directly: kfrancis@professionaltransition.com
  

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TRANSCRIPT

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[00:00:00] Victoria Peterson: Most dentists don’t own a business. They own a job with overhead. Hi, I’m Victoria Peterson, your host for investment grade practices, and today I am here with my very good friend, Kyle Francis from Practice Transition Solutions. Hello Kyle. You are my go-to person for all things transitions and what’s happening in the marketplace.

[00:00:38] Victoria Peterson: So let’s start with this concept of freedom in dentistry is not about working less. Like most donors, it’s just about being required less, you know, less of my decision making time, less oversight and delegation, you know? So those are some of the things I wanna bring up today. Like how does all of this, that [00:01:00] seems like the soft skills, we always put that in soft skills.

[00:01:02] Victoria Peterson: How does that translate into real business value? So maybe we could start with, uh, you call it inflection points. Where, where are some choice points here along the way as you’re thinking about succession planning or exit planning? 

[00:01:20] Kyle Francis: I love the first quote that you started with. Honestly. I mean, if you, uh, I remember whenever I was, uh, early on in my career, um, I would be talking with, uh, folks coming out of dental school and it felt like they, uh, a lot of them ended up falling into a couple of different categories.

[00:01:37] Kyle Francis: Uh, maybe the first one was going to be, um, you know, the artist. And so the artist is coming out and they’re gonna be providing just amazingly beautiful restorations and, you know, the sculpture part of it, all that kind of stuff. And, uh, coming out, did they or did they want not want to be a business owner?

[00:01:51] Kyle Francis: Many of them just didn’t even think about that side, right? It was just like the craft was really what mattered. Right. Um. There were the, uh, [00:02:00] clinicians, right? And the clinicians. And now granted every single doctor is a clinician, but like the ones that are just like uber focused on efficacy, you know, and on patient outcomes, you know, and those kind of things, which honestly, I mean, that’s.

[00:02:10] Kyle Francis: Uh, that’s, that’s the reason I wanted to go to a dentist, right? I want them to be focused on those DA types of things. And then there’s other ones where it just like, you know, the, um, uh, call it the, uh, entrepreneurs, right? And the ones that really wanted to kind of build something as well. And the weird part is, is that whenever they chose dentistry as a career, any of those kind of three categories, um, uh, all of them are kind of at odds a little bit with each other.

[00:02:34] Kyle Francis: Right. So the art is a little bit at odds with the clinical, and the clinical is a little bit at odds with the, uh, business owning side of it. And it’s like, okay, so what is it that you focus on and what is it that you can do? Right? Or what is it that you can do well? And so, um, I think the reason that I like the quote so much was going to be that, you know, like, yeah.

[00:02:53] Kyle Francis: A lot of them do come out and really what they end up having is going to be a job, and they also have all of these other things on top [00:03:00] of it. So, um, I, I guess the inflection points, uh, no matter which one it is, and we kind of talk through the different types of inflection points, but. A lot of it revolves around stress, right?

[00:03:10] Kyle Francis: And stressors. And everybody has a little bit of a different stressor, you know, uh, based on what type of person they are, what, you know, what type of category they came in with, you know, and what their expectations were. So, um, I think the, a key about inflection points is going to be, you know, what is it that is a stressor in that, in, in your life and in your daily job.

[00:03:31] Victoria Peterson: Yeah. 

[00:03:31] Kyle Francis: Yep. 

[00:03:32] Victoria Peterson: So true. So I’m thinking back to like several client interactions I’ve had and you know, you wanna own the business because I own a business and it’s got equity and there’s an asset and there’s a legacy and I’m leaving something for my children to be proud of and you know, all of that. But then they’re like.

[00:03:56] Victoria Peterson: I just wanna go in and quit tomorrow because stressors [00:04:00] and, and it just depends on where you have acumen. Our team and I were talking about this, like dentists are one part scientists, one part artist, and almost zero point accountant. Like, because like there’s a lot of numerical thinking to get through the.

[00:04:19] Victoria Peterson: Science of medicine, but it’s like chemicals and chemical bonds and equations that way, and physics. It’s not hardcore statistical analysis and finance and balance sheets and liabil assets and liabilities and things like that, you know? And. I think one of the biggest stressors, and I know these aren’t problems you deal with at all, but I think our balance sheets are somewhat upside down in terms of the reality of ownerships.

[00:04:51] Victoria Peterson: So on our, on our financial balance sheets, inventory and equipment, that’s listed as an asset. Right? And so when [00:05:00] you go to evaluate a practice, there’s assets and that’s the inventory. Yep. But people in payroll are listed as a liability. 

[00:05:07] Kyle Francis: Mm-hmm. 

[00:05:09] Victoria Peterson: And I think that’s like when you go to sell and you’re valuing a practice, it can be looked like that.

[00:05:14] Victoria Peterson: But in the day-to-day reality of building and growing that business, the people are the asset, and your debt on that equipment is actually the liability. So I don’t know how to flip it around and have a people balance sheet that’ll never come in the account. Uh, 

[00:05:31] Kyle Francis: that’s, that’s really interesting. So I, I do agree with you that, I mean, people are typically the biggest asset of the practice because, um, I think that, I, I think I learned this from, uh, you actually, which is gonna be, you know, uh, whenever a person walks into a practice, the reason they keep on walking into their practice, they would like the people behind it.

[00:05:50] Kyle Francis: Right. So it’s just like, how is that you made, that you made to be, uh. Feel, you know, walking, uh, in and out of the practice and like all the different touch points that are associated with it, and all those [00:06:00] different touch, touch points are not going to be the type of AEC equipment that you have. Right.

[00:06:04] Kyle Francis: That can be an ancillary, right. Um, but most of the time it’s gonna be, you know, the smiling face, right. And then how much they’re helping me and how much I’m learning while I’m there and all that kind of stuff. 

[00:06:13] Victoria Peterson: Yeah. 

[00:06:14] Kyle Francis: And, um, yeah, it’s kind of funny, but like, if, if we go back to the of inflection points, uh, I, I hear this often that one of the biggest inflection points is going to be the HR side, right?

[00:06:25] Kyle Francis: Which is going to be like, you know, uh, how much stress is it, you know, managing. Uh, the expectations of your entire team, right? And, uh, are you living up to that? Uh, is it something that you like to do? Is it something that you like to be communicative about? Even if you don’t like it, can you get good at it?

[00:06:44] Kyle Francis: You know, those kind of things. And even if you can get good at it, is it something that you want to continue to do as well? You know, so, um, HR is definitely one of those big inflection points that we end up hearing on a day-to-day basis as we’re doing valuations. 

[00:06:57] Victoria Peterson: Uh, an inflection point that I’m ready to sell [00:07:00] because I’m tired of the, 

[00:07:01] Kyle Francis: so, I think it’s the stress, the stress behind the management of those expectations, whether that’s going to be, you know, the financial outcome from a hygienist X, Y, or Z, or whether that’s going to be a.

[00:07:12] Kyle Francis: The fact that assistant didn’t show up because of different family issues. And now of how am I gonna be able to find somebody to help me out as I need a full clinical day? Right? 

[00:07:22] Victoria Peterson: Yeah. 

[00:07:22] Kyle Francis: By the way, my full clinical day is also what’s paying the bills, you know, for everybody, not just in my office, but then also in my life.

[00:07:29] Kyle Francis: You know, all those different types of things, and. So, yeah, I mean, it, again, it’s not, doesn’t just fall in the HR category, right? It can be a myriad of different things, right? Which is going to be, you know, um, uh, man looking into this very small, um, area and then working in very, very small microns, you know, that kind of stuff.

[00:07:50] Kyle Francis: I mean, that would stress me out, honestly, when, if I think about it, if that was the, if that was the career path that I had. And so, um. Anyway, but I think that, you know, uh, all of these different types of [00:08:00] inflection points, um, whether it’s going to be, you know, Hey, I have now built a practice that is going to be way bigger than I ever thought that I would have, you know, and what is next?

[00:08:09] Kyle Francis: You know? Or, Hey, I have now completely, totally u utilized my capacity, right? And so. And, uh, I’m gonna have to completely rehire everybody because now we’re gonna have to ex extend hours or, oh my gosh, I need another location, or I need additional operatories. Now I’ve gotta go through a, a construction project.

[00:08:27] Kyle Francis: And some people do not appreciate going through construction projects even a little bit. You know? No, 

[00:08:32] Victoria Peterson: I’m married, I’m married to a custom home builder. I don’t think anybody appreciates going through a building product, including the builder. You know, it stressing everybody. 

[00:08:42] Kyle Francis: Yep. 

[00:08:43] Victoria Peterson: Wow. 

[00:08:44] Kyle Francis: Or whether it’s like, Hey, I had this associate and now that person is gonna go on Aternity leave and are they gonna come back?

[00:08:50] Kyle Francis: Right. Or this person that I’ve now poured, you know, the last three years into kind of teaching them, uh, has now decided that they’re gonna move across the country. Right. It has nothing to do with like, them not liking [00:09:00] me. It’s just like their personal experience is like, is gonna be taking ’em somewhere else.

[00:09:04] Kyle Francis: So, um, yeah, I think these stressors kind of do cause inflection points for sure. 

[00:09:09] Victoria Peterson: They, they, they sure do. Um, I just finished a series of monocast uh, podcasts for, for IGP, and the very first one is, you’re Not Broken. Because I think we get to these inflection points and we go, something must be wrong with me.

[00:09:26] Victoria Peterson: It’s my leadership. I did something wrong. Um, you know, I’m hustling, I’m doing everything that people told me to do, but. I’m drain like the, the more successful I become, the more responsible I feel, not, I don’t feel more free. I feel more responsible. So you get in the grind, and I think the big lie in dentistry is we never told doctors that that model only works for so long.

[00:09:52] Victoria Peterson: And then you have to ship the structure within the practice. So there’s the race, the revenue, and you grow it and some struggle to [00:10:00] grow it. And they’ll stay stagnant for a long time. Others, just right out of the gate, boom, you know, they go from zero to 2 million and then they got this, um, kind of unintentional success, right?

[00:10:13] Victoria Peterson: And it’s a little chaotic because the systems didn’t catch up with it. And I, I, it’s been really interesting. I have. Been a consultant for a long time, and when the phone rings, the doctors will say things like, um, I wanna improve, improve my profits, or I want to have an implant. I’m, I’m doing implants now.

[00:10:33] Victoria Peterson: I want an implant practice or a sleep practice. They, they describe it around them and their service mix. Yeah, and I think that’s part of the problem and where the stressors come, is that the business is built around them. It’s not built for them. Mm. Right. And there’s a big difference. So when you put in the structure and you can get a little space between the day to day, and then the leader, you become more of an architect [00:11:00] than an operator, then you understand, well, my job is really to grow the people.

[00:11:05] Victoria Peterson: ’cause if I don’t grow the people, then they can’t own the systems. And I’ve had three conversations this week and they go, well, I mean, she’s good enough. But we did just get a bad review where the patient said she was, you know, rude, but you know, do you really think I have to replace her? I was like, man, you deserve great.

[00:11:26] Victoria Peterson: You don’t deserve good enough. So I think a lot of times as operators, as clinicians, as owners, we, we tend to make it a personal failure when these things, and it’s a self-improvement thing, but I’m learning it’s more structural. It’s more about the design. You know, are you in network, out of network?

[00:11:46] Victoria Peterson: What’s the volume? What’s your capacity? Those kinds of levers. Are you seeing any trends as doctors go to exit about the style of practice they have, how long they give [00:12:00] themselves to make those choices, to prepare the practice? What are you seeing in 2026? I can’t believe I’m even saying that. I’m still on the Y 2K bug.

[00:12:11] Kyle Francis: Yep. Uh, okay. Well, so yes, for, for let’s definitely go through TR trends. Um, whenever you say the design of, I think. That maybe the way that I end up taking that is going to be, uh, you know, designing what the next step ends up looking like. Probably comes down to desires more than anything else, right? So what is it that they want?

[00:12:33] Kyle Francis: And, um, so if. If they end up hitting an inflection point, which again is typically caused by some sort of stress, right? So understanding where the stress is is gonna be important, right? Um, but if that ends up happening, then it’s typically one of like four things that are good responses to that because the bad response is gonna be throw it up your hands and say, I can’t do any of this.

[00:12:54] Kyle Francis: Like I am, this is terrible. You know, all that kinda stuff. Uh, the fir first good response I think is going to [00:13:00] be simplify. Right. And so like if you decide to simplify, right? Sometimes it’s going to be, you know, a, uh, are you living to work or working to live type of scenario, right? And a simplification, um.

[00:13:13] Kyle Francis: Is typically going to be, well, maybe I grew something because I wanted to grow it, that I didn’t grow it in the right way. That’s gonna benefit my life the best. Right? And so, um, uh, the second way that I typically look at it is gonna be something that I know you guys talk about all the time, which is going to be, well, does the business that you’ve created actually end up benefiting you, you know, from a financial standpoint?

[00:13:35] Kyle Francis: And, uh, do you end up getting what you want to out of the business, like from a. Large desk standpoint, right? So if you have a business that is going to be $500,000 to maybe $1.5 million in revenue, and that’s just not cutting it from a capacity standpoint or from how much you need in order to live your life, those kind of things, you probably need to work on the business, right?

[00:13:55] Kyle Francis: And so you need to give yourself space to work on the business and the people around you to work on the business, those kind of things. [00:14:00] Um, uh, the, the next way is going to be. Well, maybe what you really need to do is going to be to bring on partners, right, in order to help you achieve this. And so, and some of those partners, um, could be outside the business.

[00:14:13] Kyle Francis: Many times what we see is gonna be inside the business, which is either gonna be clinical partners, right? So other doctors that you can continue to grow the business with, um, or financial partners. And the financial partners are gonna be helping you on the business side, um, as well. Uh, the final way of doing it is gonna be, uh, is uh, if you hit the inflection point, which is the.

[00:14:32] Kyle Francis: Inflection point, which is gonna be retirement, right? Well then maybe the thing to do here is gonna be it’s time to retire as well. Right? So that’s kind of the four different, uh, ways that we end up looking at it. And what you don’t wanna do is hit that eject button or hit the retirement button before it’s time to do so.

[00:14:49] Kyle Francis: Right? And so, and we, we do see that as well. So, um, uh, in terms of the design, the design can kind of fall in. [00:15:00] Probably, I would say four categories itself, right? So the design, based on the desire design, number one, is going to be well. You can sell it to an individual, right? You can sell the business to an individual.

[00:15:12] Kyle Francis: That’s completely, totally fine. That has been happening in dentistry since call of 1960s, if not 1970s, right? And it is a completely, totally fair way of selling a dental practice. Now, the metrics had not changed very much in that time. Right. So essentially it’s gonna be a percentage of revenue, right? So you take the total amount of revenue that you have, it’s gonna be something like 55 to 90% of revenue, and that is the purchase price, right?

[00:15:37] Kyle Francis: Um, typically whenever that happens, you’re either gonna be staying on a board as an associate, or you’re gonna be exiting stage left, right? So again, nothing wrong with this type of, uh, practice sale. Um. Typically it’s not done for an investment grade practice. Right? And, uh, the reason being is that investment grade practice is typically outstripped the ability for that individual to [00:16:00] just come in and purchase that practice in whole.

[00:16:02] Kyle Francis: So if you have a $4 million practice and you might be able to sell that for 3 million or $3.5 million to a individual, the chances that that person can take out that big of a note, very slim, right? It just has outstripped the ability. 

[00:16:16] Victoria Peterson: I’m just gonna ask you what, what, what do you see in that affordability?

[00:16:20] Victoria Peterson: ’cause now you’re talking buyer persona. Like who? Who can come outta school with half a million dollars of debt, a new spouse, a baby on the way, a mortgage payment, a broken down car. And now I’m buying a practice like, and I know banks are still willing to lend, but up to like a million, 1,000,005. 

[00:16:40] Kyle Francis: Yeah. So the metric that we typically use is going to be something around the 1.8 to $2 million range, not inclusive of real estate.

[00:16:49] Kyle Francis: And um, now that 1.8 to $2 million is a very specific type of buyer. That person has already been out for some time. They already have a production track [00:17:00] record, right? So they, the bank can feel very comfortable that they can produce the type of work that your practice may already be producing. Um, and, uh, those are kind of fewer and far between, right?

[00:17:10] Kyle Francis: It’s not like there’s tons and tons and tons of those buyers out there. Um, if you look at most buyers, most buyers, you know, producing somewhere under the million dollar range, they can probably take out something like a million dollars worth of debt, you know? And so, um, in very, I guess in certain circumstances, call it like the two, uh, million dollars range, but most circumstances you cap out somewhere in like the one $1.4 million range.

[00:17:36] Victoria Peterson: So if your plan is, I’ve got an associate, he’s somewhat seasoned, not great, seasoned, maybe you could go up to, well, if you’ve got an associate, you should be doing 2 million or more anyway. But if you start doing 2.5, three, four or 5 million with two doctors, you’re kind of capping out on that individual sale.

[00:17:55] Victoria Peterson: Unless you’re young and you wanna take a 15 year road. 

[00:17:59] Kyle Francis: Right. [00:18:00] Yeah. So there’s the old, uh, so what that old me, uh, consulting company, Mercer, right. That used these types of sales, they were kind of more incremental sales. Yeah. Right? Yeah, exactly. Yep. And the more incremental sales can, uh, happen over the course of, call it 10 or 15 years, where you’re selling off percentages of the business.

[00:18:17] Kyle Francis: So using that same example of a $4 million practice, uh, maybe you end up selling, call it a 25% stake to one person and then, you know, call it a few years later, once that note is paid off, you might sell another 25% to another person and then another 25% to another person and finally sell out your final stake over the course of time.

[00:18:34] Kyle Francis: Um, again, this is completely and totally acceptable. I’ve probably done 40 or 50 of these over the course of time. There are some unintended consequences to be, to, to think through. One of them is going to be at some point or another, you end up being a minority shareholder. And if you end up being a minority shareholder, that does kind of hamstring you a little bit, right?

[00:18:52] Kyle Francis: The reason being is that maybe you want to sell, but maybe the folks that are already 

[00:18:57] Victoria Peterson: on 

[00:18:58] Kyle Francis: with you. Don’t want to. [00:19:00] Right. Don’t want that, or they don’t want that person. Right. And they’re gonna be the ones who are gonna be long-term partners with that person. Right. So there can be, um, uh, a little bit of friction on the backend of those deals.

[00:19:11] Kyle Francis: Uh, for the most part, they do work out. They do work out nicely. Um, and uh, the other thing is 

[00:19:16] Victoria Peterson: today we would be like, I don’t know, 2036 to 2042. 

[00:19:21] Kyle Francis: Right. 

[00:19:22] Victoria Peterson: I don’t know why that sounds so. Like an uncertain, it’s all way up. Sounds like a very uncertain, like given how fast AI is coming in, how quickly the world is changing and all of that.

[00:19:33] Victoria Peterson: I was like, you know, back in the seventies it was just a lot slower. So you had, oh, it’ll be 1982. How much could happen between now and then? But man, a 10 year span right now, I don’t think the world will even look the same. 

[00:19:48] Kyle Francis: That’s a really interesting perspective. I actually hadn’t had thought about it in those terms.

[00:19:51] Kyle Francis: Um, I. So the functional reason that they have to do it that way is that a bank doesn’t want to lend again on [00:20:00] a practice until the first note is paid off. Otherwise, they wanna combine the notes and then it’s really hard to figure out. It’s like, okay, so who’s guaranteeing this note? Does the practice have to guarantee the notes?

[00:20:09] Kyle Francis: If you’re the original owner of the practice, do you have to sign on that note? There’s all these different types. Things you have to figure out as well. Um, but you’re absolutely right. Yeah. I mean, the pace of life has sped up, right? And so the fact that that still is good to be the metric that banks use, that is really interesting.

[00:20:25] Kyle Francis: And it probably has, 

[00:20:27] Victoria Peterson: well, banks even even be here. We’ll be selling with Bitcoin by then. Dis Booker. I say, you know, you had the scenario of, well now you’re the minority owner and the others won’t buy you out or can’t buy you out. I actually had one where the three junior partners, when the senior got minority, uh, and they, well, yeah, it was the three partner and they went and outvoted ’em to sell to a DSO when the original didn’t want to.

[00:20:54] Victoria Peterson: And uh, you know. Didn’t benefit quite the way he thought he should. You know, [00:21:00] so it’s, it is, it is a design though, right? It is a design. It’s still viable if you’re in the middle of this, like, keep going and go talk to Kyle and get it all. We are, we’re doing annual valuations now, and we’re so grateful to your team because I don’t wanna coach a doctor until I know what their end game is.

[00:21:19] Victoria Peterson: And I know that’s a counterintuitive consulting stance, but I don’t know. How to tell you if you should bring in a myofunctional therapist and start working with naturopaths and do all this cool oral systemic that you might be interested in clinically. If your game plan is to sell in a year or, or if your game plan is to sell in two years and you need 6 million for your retirement, but you’ve saved up two.

[00:21:47] Victoria Peterson: So about, uh, you and I probably started working together, what, three years ago or so, and, and just said, let’s, let’s define the endpoint. And then, and I, we’ve [00:22:00] just gone through annual planning and updating annual plans, and I was working with one of our clients and I said, you grew 41%. 51% year over year, 51% on production year over year.

[00:22:14] Victoria Peterson: Yet she invested a lot in ce. A lot of equipments or profits weren’t there, weren’t feeling there. So this year we’re not focused on the team so much. We’re focused more on the profits. And I said, when we set your meter for profitability, I wanna know what your end game is because. What if you’re profiting 300 grand a year, but you would’ve gotten to retirement in six years if we had profited 400 grand.

[00:22:39] Victoria Peterson: Like I don’t wanna miss it by 20, 25%. So, um, I. All right. Designing 

[00:22:46] Kyle Francis: well, so yeah, no, I mean, so what you were just talking about I think, kind of revolves around that whole concept of desires should inform your design. Right? Right. And so, like, um, what it is that you want out of, uh, whether it’s [00:23:00] life or out of this practice or out of retirement or out of, you know, how you feel on a day-today basis or the tri type of treatment that you’re doing, all of those different types of things.

[00:23:09] Kyle Francis: Uh, I feel like there’s not necessarily enough thought. Putting into like what is it that you wanna be when you grow up, right? Not just like whenever you grow up in dentistry, it was like, okay, next steps as well. Right? 

[00:23:20] Victoria Peterson: Right. ’cause you’ve got a life outside this and you can’t just go home and say, hi, honey, I’m here.

[00:23:26] Victoria Peterson: Your wife’s gonna throw you out the door, you. 

[00:23:30] Kyle Francis: Yeah, Robert was selling a guy’s practice in Virginia Beach and he, he came to me and he said, what, you know, how many rounds of golf am I actually gonna play a year? You know, those kind of things. Yeah. And what we ended up doing for him was going to be figuring out a scenario where he could continue to work in the practice two days a week.

[00:23:45] Kyle Francis: And we thought we were only gonna do that for another couple of years. He ended up doing that for 11 years. He just still enjoyed it. Oh. Monday hung out with friends on a, on a, on a Saturday and a Sunday, and he worked on a Monday, right? And then the rest of the time he had moved his entire life down to [00:24:00] Miami, you know, and so like, well, there’s lots of different ways of skin.

[00:24:03] Kyle Francis: The cat, if you actually think through what you end up wanting. And what is the best way of accomplishing it? And the hard part is like hearing you say, okay, well what if they did end up going and taking that course about myofunctional therapy or about, you know, all of these different types of things.

[00:24:18] Kyle Francis: And they changed their practice pretty systemically and then now suddenly they can’t get what the investment grade would have been out of the practice. ’cause now everything has changed. Right. And so I’m not saying don’t do it, it’s just like, let’s be thoughtful about 

[00:24:32] Victoria Peterson: re intentionally. Yeah. 

[00:24:34] Kyle Francis: Yeah, 

[00:24:34] Victoria Peterson: exactly.

[00:24:35] Victoria Peterson: Exactly. Oh, I love it. Alright, so what’s the third design and maybe incremental sales. I’ve put in an extra one there for you. 

[00:24:42] Kyle Francis: What’s the next, yeah. Yep. So third design is gonna be, uh, in, in some way or another, bring on a partner, right? And so, um, I think that partner is going to be either, uh, from a clinical standpoint, which is gonna be most apropos.

[00:24:59] Kyle Francis: Whenever [00:25:00] it’s gonna be just like one doctor, then you’re selling it to like half of it to another doctor and you don’t have desires of just, of expanding beyond that. I think a clinical partner can be really good there. Maybe finding somebody who ends up being good at some of the things that you’re not good at.

[00:25:14] Kyle Francis: You know, those kind of things. Maybe you know, the in source, a few more of those things. All those kind of, all that kind of stuff. Um, but look, partnerships in dentistry work out very nicely, you know, so 80% efficacy over 10 year time horizons is really, really good. And so, um, I, I’m out of. Afraid of doing those di different types of deals.

[00:25:31] Kyle Francis: Um, I, I am much more afraid of putting associates, uh, in there for long-term associateships and then hoping they become, um, uh, there’s this, uh, really great book, blink by Malcolm Gladwell about how people make decisions, right. I think that you’ve probably already made up your, your mind on that associate, whether they’re partnership material or not.

[00:25:51] Kyle Francis: And if they’re not, and that’s what your desire is, is to have a partner. Well, you need to be able to fire fast, you know, and you need to be able to reorient yourself in that way too. Do you [00:26:00] agree with that? 

[00:26:01] Victoria Peterson: Well, I do, and I think that there’s, I always say there’s no defects in people. There’s defects in systems.

[00:26:08] Victoria Peterson: And most of the time when there’s a mismatch like that is because they didn’t take the time to align the desires. They didn’t take the, uh, like you and I would have ’em fill out a memorandum of understanding. Most, most doctors kind of fatigue out on big things like that. But I do recall a doctor saying, Hey, I, I really, I need to bring on this associate as a partner.

[00:26:29] Victoria Peterson: He’s like, great. Tell him about him. Why do you need to do this? Well, he has another practice three hours away. He likes this area better. So for him it’s more convenient and he would rather. Drive and he’d like to give up that practice. And I was like, great, but why do you need him as a partner? And he said, well, I don’t have enough patience yet.

[00:26:49] Victoria Peterson: I would have to do some marketing. I would have to do this. I would have to be, I need to get ready for him to be a partner. And I was like, wait a minute. What’s he bringing to the partnership equation? And he goes, [00:27:00] what do you mean? I said, oh, well, if he was coming on as a partner, he would say, look, I run my business.

[00:27:05] Victoria Peterson: I know it’s gonna take some marketing. I’m willing to roll up my sleeves. Let’s host a party. I’ll get in the community, I’ll do some speaking. Uh, I’ve got some budget that I can bring to it for marketing. Um, I understand. So if he’s not talking about being involved in marketing, then you’re giving away half your profits for somebody who wants to be an associate.

[00:27:26] Kyle Francis: Right. Yeah. Well, so I, I, so this is something I often say. This is something I often say to doctors, which is going to be the reason that you do all of these different transactions that we’ve just talked to about to this point. Uh, um, we’re taking the financial partner thing out of it for a moment, but like all of the different ones where you’re selling a certain percentage of your business to another clinician, the reason that you’re doing it is almost never financial.

[00:27:47] Kyle Francis: And the reason being is that you almost always make out better by keeping all the equity for yourself over the long run, because the way that the bank prices, it just happens to be lower than what it should be any other way, [00:28:00] right? So if you ended up owning a mount biking manufacturing company, it typically actually does make sense to bring on partners there because they’re gonna be buying in for what is the actual.

[00:28:07] Kyle Francis: True value of that business. It just happens to be lowered within dentistry because of the provider risk that is associated with having those two persons, or that person’s two hands in that mouth is the thing that drives all the revenue. And if something goes wrong with that, then the revenue goes away.

[00:28:23] Kyle Francis: Right? And so, um, uh, but. It when, whenever we think about, you know, if the best financial decision, if it was to bring on a partner individually is probably going to be just to keep it as long as you can. Then really what you’re doing is you’re doing it for cultural reasons. You’re doing it for ease of life, life reasons.

[00:28:43] Kyle Francis: You’re doing it because you want to mentor somebody. You know, you love the teaching aspect of it. All those different types of things. Maybe it’s a family member who’s coming on board, but you know what, call it, you know, 15 years ago whenever the consolidation. Wave of dentistry started, um, that really did bring on other [00:29:00] types of options, especially for these, call it investment grade practices, right?

[00:29:04] Kyle Francis: Because if it is going to be an investment grade practice and the value of the asset that you’ve created is going to be one of the driving reasons of doing these different things, then bringing our financial partners can be very applicable as well. 

[00:29:19] Victoria Peterson: Let’s talk about that. 

[00:29:20] Kyle Francis: Yeah. Um, so I mean, a financial partner, so typically that’s going to be a group or kind of known as a DSO.

[00:29:28] Kyle Francis: I remember back in the day, DSOs weren’t even a word. They’re a marketing term. Right. And uh, at that point it was a holding company, right? So it was a holding company or an umbrella company. And, uh, DSOs came around because, uh, they wanted some sort of marketing terms. That way the people would take them more seriously.

[00:29:45] Kyle Francis: Interestingly enough, I would say that the early DSOs did not do very well from that brand. Um, they kind of ruined it. Um, so you hear all these other terms that are out there, right? So 

[00:29:55] Victoria Peterson: CPO 

[00:29:57] Kyle Francis: right. 

[00:29:58] Victoria Peterson: Cpa O [00:30:00] 

[00:30:00] Kyle Francis: Exactly. Just know that all of them are Mark. 

[00:30:02] Victoria Peterson: Oh, you are not, we’re not that o. 

[00:30:05] Kyle Francis: Right? Yeah, exactly. Um, I, I guess, uh, look, there’s, there’s 350 of ’em that are out there now, and if you look at those 350 that are out there, uh, I would consider, you know, a hundred of them, I wouldn’t touch with the 10 foot pole, right?

[00:30:21] Kyle Francis: So they’re ones that would be very, very challenging, I believe for most doctors to be good with. You know, whether it’s. Ethically, how they’re treating their patients, how they’re treating their staff, you know, the type of hoops that they have to jump through with the type of materials they have to use or don’t have to use, those kind of things.

[00:30:38] Kyle Francis: Um, essentially they tried to, uh, many of them end up making decisions that I would very much prefer doctors to make in total. Right. Um, but that leaves 250 of them and 250 of them I actually do believe are out. For many of the right things, which is gonna be doing the right things by clinicians, by patients, uh, helping doctors with the mundane tasks that they may not like to do.

[00:30:58] Kyle Francis: We talked about HR to [00:31:00] start with, right? If you actually had centralized hr, an entire group that is focused on the HR aspect of the business, and that’s something you didn’t have to be with anymore, well that’s suddenly one of those stressors that can come off of your plate, right? Um, and what if they didn’t have to, you know, uh, meet with.

[00:31:16] Kyle Francis: The marketing company ’cause they don’t really know how to market, right. And they don’t really understand whether, uh, the marketing agency that they’re using is good or not good or effective, or not effective and they don’t know how to track it. You know, those different types of things. Well, by bringing on a partner that is good at those, call it mundane business tasks, it can be a really big, be a really big boon for the business.

[00:31:38] Kyle Francis: Um, 

[00:31:38] Victoria Peterson: well, suddenly you have Friday afternoon back, 

[00:31:41] Kyle Francis: right? Yeah, absolutely. Right. 

[00:31:43] Victoria Peterson: Really all day Friday it’ll go crazy. 

[00:31:46] Kyle Francis: Yeah. And, uh, uh, if, uh, I guess along with that, can you, can you solve some of those stressors along with getting the right type of price point for that business? Because those groups are able [00:32:00] to leverage debt and able to leverage equity in ways that you just can’t do as an individual practice.

[00:32:06] Kyle Francis: Um. And whenever I say you can’t do, many people don’t want to be able to do this because it really takes a lot of growth in order to be able to do this. And that’s the fourth option, which is you can create your own right, and you can create your own. I’ve known people to do it as well, but, uh, to suffice to say that financial type of buyer, um, can be very applicable, um, from a financial standpoint.

[00:32:30] Kyle Francis: Um, I, I think that it can be a, a boon for many of the doctors we end up working with. Uh, you know, to their bank accounts. Um, it can be very nice. Um, it can also be very nice from a taking stressors off as well as potentially giving other people opportunities that they wouldn’t have had, uh, in the past as well.

[00:32:49] Kyle Francis: That could be front office, back office, doctors, mentoring programs, all that kind of stuff. 

[00:32:54] Victoria Peterson: All right. Well, um, God, I have so many questions for you, but let’s dive into this [00:33:00] fourth one. So we just a little bit creating your own group. And you and I were talking about this before we came on air. Um, doctors come to me in anywhere between like 2013, 2018 and they said, I wanna start a group.

[00:33:15] Victoria Peterson: I probably would’ve been all for it. You know, the, the economics were a little tight, but it was still doable. You could probably get 10 million from a bank to start a small group, and then you could start going up into, you know, more angel investors and things like that. Or you’re profitable and can self fund.

[00:33:33] Victoria Peterson: I, I personally don’t see it. I see it a little harder today, you know, post, post pandemic, post supply chain disruptions, um, and the uncertainty of the times today. What do you see in terms of. Starting groups or emerging private equity back, there’s two different types, right? There’s private funding and then there’s private equity, which is a little bit [00:34:00] different.

[00:34:00] Kyle Francis: Yeah. 

[00:34:00] Victoria Peterson: Um, what do you see happening with, with creating groups? 

[00:34:04] Kyle Francis: Yeah. Um, okay. So let’s say that you’ve made the choice that you want to start your own group. I would agree with you that it was way easier before. Right. And there’s a lot of different reasons that it was way easier. But, um, uh, if. You think about it in these terms, just because you’re scaling something does not mean that your stressors go away.

[00:34:23] Kyle Francis: You just have different stressors. Right? And so now maybe instead of the stressor being, how is it that I can keep that hygiene, um. Column booked whenever my hygienist called in sick, right? Maybe you don’t have that stressor anymore because you have layers of management to help with that. Um, but you know, figuring out the way of making sure that, uh, you know, the 17th practice that you put under your, under your platform is working the way that you want it to.

[00:34:53] Kyle Francis: Uh, what happens whenever you get beyond five practices and you can’t show your face in there every single day? Do you have the adequate representation [00:35:00] within that, uh, ecosystem in order to have it work? Um, uh, I think that, you know, from a pressure standpoint, I know that you’re kind of in a middle ground, right?

[00:35:08] Kyle Francis: So like, uh, there’s all of these very, very large groups that are getting all of these enormous discounts, right? And those enormous discounts are probably not going to be going to people who have 10 practices, right? Um, as a matter of fact, I just, uh, we, we just started working with a practice group that has 10 locations, call it two, uh.

[00:35:27] Kyle Francis: $22 million in revenue and right at $5 million in ebitda. Um, that sounds great. You know, it sounds really great. But the person that I was talking to whenever I was talking with them, I have never heard anybody more stressed out than this person. You know, and like there’s all sorts of different things that are going on with him and his partner and they’re kind of the way they end up living their lives and all that kind of stuff, that this is not something he should have on his plate right now.

[00:35:52] Kyle Francis: Right. And so just know that I, what is it, the old line mo money, mo problems, right? So they’re just, and I don’t [00:36:00] know if I necessarily buy into that, but I think it’s just different problems, you know? And so, um, the, those, uh, those types of inflection points don’t just suddenly go away. And at some point or another, if you decide to grow a group like that, you are still going to come face to face with the idea of.

[00:36:17] Kyle Francis: What do I end up doing with it? Right. You actually haven’t, right? Problem. Right. So you’ve essentially said, I’m gonna take a different line, but that other line still needs to come back at some point or another, which is gonna be, well, what do I do with this over the course of time? 

[00:36:32] Victoria Peterson: It’s really just kind of more zeros, right?

[00:36:33] Victoria Peterson: So I’m a solo person facing succession planning and getting clarity about my exit, and we’re talking 2, 3, 4, 5, $8 million, right? Or I build this huge group and now I gotta go find somebody who’s got 40, 50, $60 million. And there’s, there’s. In my experience, there are fewer people who have $50 million playing around.

[00:36:55] Kyle Francis: Oh, that’s a, that’s a great point. Okay. So like, if I give you like the, um, [00:37:00] really nice normal practice, right? A really nice normal practice is gonna be called like $2.5 million of top line. You probably have, you know, a couple of doctors working a really good hygiene program, maybe have, you know, call it 20%, 25% EBITDA margin.

[00:37:12] Kyle Francis: So you’re running, you know, 500, $600,000 a year on that. With that type of practice, I have literally. My choice of buyers, I can go out to literally a hundred of them and a hundred of them are gonna give offers on a practice like that. Um, there’s one practice I’m working with right now that has $60 million in revenue and $17.5 million in ebitda.

[00:37:33] Kyle Francis: And guess how many buyers I have for that? 

[00:37:35] Victoria Peterson: Three? 

[00:37:36] Kyle Francis: One. Oh one, you know, and so like it’s, uh, now, uh, it’s gonna be a good thing, right? Because we found somebody in order to come in and do something with them. But at the same time, your, your buyers do get truncated as well, the bigger that you grow too. So again, that’s not saying you shouldn’t, right?

[00:37:53] Kyle Francis: Some people end up doing that and really, but it, uh, there 

[00:37:57] Victoria Peterson: are, you help, you help. Bruce and I go to market [00:38:00] with the Lamper group and like, we saw it just like. Turned off mid 2020. Well, it was early to mid 20, 24. Yep. Uh, so it’s been almost two years now. More than two years. Like, and we thought, well, this is a cycle.

[00:38:16] Victoria Peterson: You know, they’re all playing golf in the summer. They’ll come back, but I don’t think they’d come back. 

[00:38:20] Kyle Francis: Not, not yet, honestly, not yet. So, um, anyway, so again, pluses and minuses. Uh, again, I think the, if you start with desire, right? And maybe you do have a desire to grow something, just know that you can also grow something under another umbrella and it can also, uh, I guess, shade you from some of these different types of outcomes as well.

[00:38:39] Kyle Francis: And so I think the earlier that you start figuring out. What it is that you want. The earlier that you can come up with a plan, which will allow you to get what you want out of it. 

[00:38:51] Victoria Peterson: Oh, I love that. You’re right, because there are, um, gosh, we’re just gonna have to have a whole nother podcast on this ’cause I love the way [00:39:00] you say about a third of the groups, uh, that are private equity backed, um, don’t.

[00:39:07] Victoria Peterson: You’re, you’re, they’re gonna be pretty obvious, like the ethics, you ask a few questions about that. But for the two thirds that are, there are some great joint ventures, sub DSOs you can own into your practice. Um, they’re not as many where you get whole co stock or, um, on par stock, but there’s still a few of those.

[00:39:26] Victoria Peterson: But, um, you still can be the leader. In fact, it’s required to be the leader in the practice, uh, in most cases. And I love those. Um, one of the things that we’ve noticed, uh, is that it, and we’ve started a whole different service line, the Clinical Calibration Institute. As you know, we’ve, we’ve helped doctors transact now for two decades and those who transact into larger organizations or have financial partners, and to your point, clinical partners for cultural reasons, [00:40:00] the clear you are on your philosophy of care.

[00:40:03] Victoria Peterson: This is what we believe in. This is what our ethical standard is. This is how we treat people. We do this, we don’t do that. When we see this, this is how we diagnose it. Like it is really, I’m not saying it’s easy to wrestle it to the ground, but if your clinical standards are locked in like a system, when you go to sell, your financial partners don’t wanna change that.

[00:40:29] Victoria Peterson: ’cause that’s your secret sauce, that’s your special thing, and they’re actually buying you. You get more value because you can say. This is how we want our new patients, Sam. This is how we diagnose. This is what our options are. This is how we get there. Without it, if you don’t have standards, they will try to impose standards.

[00:40:50] Victoria Peterson: And through metrics, right. And I, I saw California just came out with legislation, Oregon, several other states doubling down on [00:41:00] equity groups, having no say in the diagnostic equipment, the exam process or, or interfering with the patient’s clinical rights. And so that’s where we do a lot of work is I don’t think doctors have thought, they think about.

[00:41:17] Victoria Peterson: Practice management systems, right? I need to have a computer and a schedule and a way to collect money, but I don’t think they’ve yet started thinking about what are, what are my clinical systems? So what, what’s your standard for perio? Well, it depends on what, on this hygienist does it that way, that that’s not a standard, it’s not a system.

[00:41:39] Victoria Peterson: And so I, I started out at the beginning of the podcast saying that most in the past doctors would call and say, help me build a practice around me. I like doing implants, I like doing sleep, AP acne, let’s build it around me. And we made ’em very productive. I can tell you since 2026 started, I don’t know what was put in the water, [00:42:00] but every single doctor is saying, help me build a practice around systems.

[00:42:04] Victoria Peterson: I want a system based, not personality based, not clinician based practice. And I think it’s because solo doctors are waking up to, it’s really hard to be a solo doc and you need that associate, you want that partner. And so maybe that’s why I’m seeing. Uh, more doctors interested in building an investment grade practice, but then once you build it, what do you do with it?

[00:42:28] Victoria Peterson: So, right. You see. 

[00:42:30] Well, 

[00:42:30] Kyle Francis: and as you’re, well, it’s funny, as you were just talking about that it, this literally just came to mind. So I’m hoping, this is a good analogy. We’re gonna find out. You’re gonna tell me how it is or is not. Um, uh, creating an investment grade practice can go one of two ways. It’s either going to be your investment or it’s gonna be theirs.

[00:42:49] Kyle Francis: And so I feel like an investment grade practice to me is going to be something that is working for you in the way that you want it to work and working for you financially, the way that you want it to work. And that means you could be doing [00:43:00] that with a partner, right? As a, for instance, right? And sometimes putting an investment on steroids in that way can be a really good thing.

[00:43:06] Kyle Francis: However. The flip side can also be true, which is going to be okay if you go into this thing without systems and you go into it without standards. You go into a scenario where you have brought on a financial partner, well then who actually is running the investment? They are, right? Right. And so if they are running the investment, maybe you feel completely and totally comfortable with that.

[00:43:24] Kyle Francis: It’s not necessarily a practice I don’t wanna go to though, right? And so like, um, I want those standards, those standards and those systems end up put in place. So that way it works well for you, not just your investment partner. 

[00:43:35] Victoria Peterson: That’s right. And that’s one of the systems that I think you and I are probably still on the very early, early wave of this, of having this deep desire for doctors to say, exiting my practice should be systematic, you know?

[00:43:53] Victoria Peterson: Yeah. Because if I had a, especially if I wanna bring on a partner, I would wanna have those [00:44:00] conversations upfront. That said, not only what do you do if you die or you’re disabled, you know you’ve got key man insurance for the disasters. But I don’t think anybody is really planning for what’s our tipping point?

[00:44:12] Victoria Peterson: What’s our exit point? If somebody came along tomorrow and offered us X millions of dollars, would we say yes. And when would we say no? And what would the scenarios look like for us to exit? Do we exit together? Do we exit separately? You know, I, I think if we had more conversations about that upfront, um, the partnerships, I know they work well over a period of time, but I have had so many partnerships.

[00:44:38] Victoria Peterson: They wrote it out, they stuck it in a drawer and they had no clue of what the exit, um. Policies were that were written into that agreement until somebody gets sick or somebody just decides, Hey, wife wants to go to Italy for a year, and we’re, we’re outta here. And then they go, wait, you can’t, ’cause this is a 20-year-old document [00:45:00] and doesn’t, so there’s a system for everything.

[00:45:03] Victoria Peterson: That’s, I, I, I’m, I’m very intuitive. My te team will tell you I’m very big picture, but I am learning to embrace systems as design. So you walk into a well-designed home or you walk into, uh, fashion designers, you know, it’s just curated, it’s intentional. And, and I think that that’s gonna be the theme for 2026.

[00:45:26] Victoria Peterson: Um, every, every podcast so far this year, I’ve ended with, um, clarity energizes you and chaos will continue to drain. The life force right out of you. And building on chaos when team members don’t know their roles. When you don’t have, it’s not hard to do. That’s the fun part. It’s just take some time and having somebody facilitate it.

[00:45:50] Victoria Peterson: So Kyle, you’re such a joy to talk to. I don’t even know how long this podcast is going, but every minute of it has been a drop of gold. Um, un titling [00:46:00] this one by the way. Desires inform the design. 

[00:46:04] Kyle Francis: I love it. That’s great.

[00:46:09] Victoria Peterson: Well, it’s always great to chat with you. This is probably our third or fourth podcast you were part of our Built to Sell, uh, webinar series. We closed that out December 31st, but I think we may be bringing that back in the spring. Uh, for those we. It helped so many doctors. I think there were four or 500 dentists that downloaded that webinar series, and it’s just been so enjoyable working with you over the years, and thank you for sharing your knowledge.

[00:46:35] Kyle Francis: Vice versa. You’re the best. Victoria. 

[00:46:38] Victoria Peterson: If anybody wants to get in touch with you or your team at PTS, what’s the best way to do that? 

[00:46:42] Kyle Francis: Yeah, so, uh, either go to our website, which is professional transition.com. Both of ’em are singular, professional transition. You can find us on, um, any of the social medias, whether it’s LinkedIn or Facebook, all those different types of things.

[00:46:55] Kyle Francis: Uh, you’re more than welcome to give us a call. And we also have, you know, folks, [00:47:00] um, on the chat, on the, on the side as well. So any other way, those ways work well for us. 

[00:47:05] Victoria Peterson: That’s awesome. All right, well here’s to a great 2026. 

[00:47:09] Kyle Francis: You’re here. 

[00:47:10] Victoria Peterson: You’re here.