Buying a dental practice? Here’s what you need to know


If you are considering buying a dental practice, there are plenty of things to consider before making any decisions. 

The biggest question you will need to decide on is whether you want to purchase an existing practice with active patients, also known as an acquisition, or start a brand-new practice from scratch.

While there are pros and cons to both, I’ve included a list of factors for you to consider before buying in my new book, DentalEase: The Essential Guide to Building the Stress-Free and Profitable Dental Practice of Your Dreams

Below are a few of the factors you should consider in your buying process.

All costs and compare

This might seem like a no-brainer, but it’s critical that you evaluate all of the costs associated with buying an existing practice versus starting a new one. 

As in most transactions, there is frequently a gap between what the seller thinks their business is worth and what the buyer thinks it is worth. 

As the buyer, it’s important to remember that the selling dentist has an emotional connection to their practice and will likely try and sell their business for more than it’s worth. As a good rule of thumb, an existing practice’s market value is typically about 70 to 90 percent of the previous year’s revenue.

In addition to weighing the market price, it’s critical to do your due diligence before making any final decisions. 

This means that you should undertake a comprehensive appraisal of every aspect of the business. You may want to retain a consultant to evaluate each practice element, including staff, systems, and a complete chart audit and patient count. This type of consultant can also advise on ways to improve the practice after the sale is complete.

Patient files 

Before you consider buying an existing practice, make sure you carefully audit the practice’s patient files. This type of audit will help you make sure the patient base you are buying is active. It will also allow you to get a sense about the kind of services the practice offers. Some of the questions you may want to consider are:

  • What types of dentistry does the clinic offer? 
  • Are there services you don’t want to offer? 
  • Are there services you think should be offered? How will this impact the practice, staff, and patients?
  • What is the ratio of restorative or cosmetic services versus hygiene?
  • What services are referred out? Could they be kept in-house?
  • Is it fee-for-service?

What is the actual value?

As I noted above, it’s critical to complete a full appraisal of the business before buying it. I strongly suggest hiring a dental practice management consultant, so they can help you get “under the hood” of the practice. 

The consultant will help by assisting with a chart audit and evaluating practice management systems, collection policies, treatment planning, patient base and patient turnover, marketing, etc. This consultant will also have an accountant to help understand the financials of the business in regards to financial statements, cash flow, practice expenses, debt, staff salaries and other key areas you’ll need to know about.

This analysis will allow you to assess the practice’s health, identify strengths and weaknesses, and determine if the office is a good fit for you. A practice management consultant can also provide ongoing consulting during the changeover for a smooth transition and after the transition to ensure the practice operates efficiently.

Practice status in the community

Understanding the status of a practice in the community before you buy it is just as important as completing a full appraisal because it will impact how well you attract new patients. 

If the clinic has a bad reputation in the community, it will make your job even harder and likely hurt your growth ability. It’s important to remember that you are not just making a real estate purchase buying an office with a client base; you also buy the practice’s reputation. A bad reputation can be costly, so make sure you reach out to other businesses in the community to get their honest opinion about the practice.

To learn more about what to consider when buying a dental practice, make sure to download the first chapter of my book DentalEase: The Essential Guide to Building the Stress-Free and Profitable Dental Practice of Your Dreams. The first chapter is free to download and will give you even more insight and the steps to follow to create a successful dental practice.

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