How to Evaluate a Dental Practice Before Making an Offer
A step-by-step guide to reviewing financials, patient charts, equipment age, and staff stability before submitting a letter of intent.
A step-by-step guide to reviewing financials, patient charts, equipment age, and staff stability before submitting a letter of intent.
Collections, payer mix, active patients, staff tenure, and equipment condition are the five biggest drivers of practice valuation.
Transitioning from associate dentist to practice owner is a major leap. Here's what first-time buyers should know going in.
Understanding the trade-offs between SBA 7(a) loans, conventional dental-specific lenders, and seller financing options.
Patient retention during ownership transitions is critical. These communication strategies keep your patient base intact through the handover.
A plain-English walkthrough of the legal documents involved in a dental practice acquisition and what each one actually means.
A non-binding document that outlines the proposed terms of a purchase before the formal Asset Purchase Agreement is drafted. Establishes price, structure, and key conditions.
The binding legal contract that transfers practice assets (equipment, patient charts, goodwill) from seller to buyer. Drafted by attorneys and reviewed during due diligence.
Earnings Before Interest, Taxes, Depreciation, and Amortization. Used to evaluate the true operating profitability of a practice, independent of financing or accounting choices.
The intangible value of a practice beyond its hard assets — including brand reputation, patient loyalty, staff relationships, and location. Typically the largest component of a dental practice's value.
The buyer's process of verifying all material facts about a practice before closing — including financial records, patient charts, equipment condition, lease terms, and legal compliance.
The number of patients who have had at least one appointment in the past 18–24 months. A key metric buyers use to assess the health and stability of a patient base.
The breakdown of payment sources — fee-for-service, PPO insurance, HMO/Medicaid. Practices with higher fee-for-service percentages typically command higher multiples.
The post-closing period during which the selling dentist stays on to introduce patients to the new owner, typically 30–90 days. Usually required by lenders and buyers.