The Dental Practice Buyer’s Guide & Checklist

Before you start

Get your own house in order first: know your credit, your student-loan picture, and roughly what you can borrow. Practice-acquisition lenders often finance well-qualified dentists with little money down, but you’ll move faster and negotiate better if your finances are clean and you know your number going in.

What makes a practice worth buying?

A good acquisition is a healthy, transferable business at a fair price — reliable collections, reasonable overhead, a loyal active-patient base, a stable team, and a seller willing to transition well. Understand the valuation before you fall in love with the office.

The due-diligence checklist

Financial

• Three years of P&Ls and tax returns — do they reconcile?
• Collections trend (growing, flat, or declining?) and adjusted-collection %.
• Overhead by category vs. benchmarks; any owner add-backs verified.
• Accounts receivable aging and how much is actually collectible.
• Fee schedule and payor mix (FFS vs. PPO vs. Medicaid) and PPO write-offs.

Patients & production

• Active patient count (seen in the last 18 months) and new patients per month.
• Production by provider — how much depends on the selling owner personally?
• Hygiene reappointment rate and unscheduled treatment (the pipeline you’re buying).
• Procedure mix and any production that leaves with the seller (specialty referrals).

Operations, team & facility

• Team roster, tenure, roles, and compensation — will they stay?
• Lease terms, remaining years, and rent as a % of collections.
• Equipment age and condition; technology (imaging, software) and any needed upgrades.
• Systems and documentation — how turnkey is the day-to-day?

Legal & deal

• Asset vs. stock sale and the purchase-price allocation (it drives your taxes).
• Non-compete and transition/employment terms for the seller.
• Any liabilities, liens, or pending issues; corporate and licensing details.
• Credentialing and insurance-plan assignment timeline (don’t let cash flow gap).

Financing the purchase

Most buyers use a practice-acquisition or SBA loan. Lenders weigh your credit, production history, and the practice’s cash flow. Make sure the deal cash-flows after debt service and a market salary — see financing a practice purchase and budget working capital for the transition.

From offer to close

1. 1Letter of intent — agree on price and broad terms.
2. 2Due diligence — verify the numbers above with your CPA and advisor.
3. 3Financing — secure the loan and finalize working capital.
4. 4Legal — purchase agreement, allocation, lease assignment, employment terms.
5. 5Transition plan — credentialing, staff communication, and the seller’s hand-off.