Are you looking to open a practice?
Buy a Dental Practice With Confidence — Full Financial and Acquisition Support From Start to Close
Buying a dental practice is one of the most important decisions in a dentist’s career. It is also a complex process that requires careful planning, financial readiness, and the right guidance. Our team at Dental Accounting Group in Bellevue, WA, works with dental professionals across the country who want to move from associate to practice owner. Our team helps dentists understand every part of the dental practice acquisition process, from evaluating financial statements to structuring a purchase agreement and planning a smooth transition.
The dental industry offers incredible opportunities for dentists who want to own their own practice. However, choosing the right dental practice requires market research, careful consideration of patient demographics, and a thorough understanding of the dental office’s financial health. Our advisors help you evaluate the numbers, analyze the risks, and identify opportunities so you can confidently pursue the perfect practice for your career goals.
Whether you are considering an existing dental practice, exploring a new startup practice, or reviewing opportunities presented by a dental practice broker, our role is to guide you through each step of the practice acquisition process. With the right transition plan and thorough due diligence, a successful dental practice acquisition becomes possible.
From Dentist to Business Owner
Buying or starting up a practice? We have helped more than 600 practice owners navigate the process since 1990.
Why Buying an Existing Dental Practice Is a Smart Investment
Many dentists choose to purchase an existing practice instead of starting a new practice from scratch. An existing dental practice often comes with an established patient base, trained staff members, and functioning systems already in place.
This means you may benefit from:
- A stable existing patient base
- Immediate patient flow and revenue
- Established relationships with insurance coverage providers
- Experienced dental office staff members
- Existing practice management software and systems
However, buying an existing dental practice still requires careful evaluation. The patient retention rate, hygiene production ratios, and insurance reimbursement mix all affect the long-term financial performance of the business. Our advisors help analyze these details so you can determine if the practice is truly the right dental practice for your goals.
More Than Just Numbers
We understand the challenges of transitioning into practice ownership. That’s why we focus on helping you navigate your first 90 days with confidence. It’s more than the numbers. It’s your team, practice philosophy, marketing, compliance, and more. Our job is to help guide our clients with their decision-making rubric—we are your soundboard and trusted advisor.
Unlock your full potential as a dental practice owner.
Our 6-Step Dental Practice Acquisition Process
1. Define Your Ideal Practice
2. Financial Pre-Qualification and Lending Strategy
3. Practice Valuation and Deal Analysis
4. Due Diligence and Risk Assessment
5. Transaction Structuring and Tax Strategy
6. Closing and Post-Acquisition Planning
How Our Consulting Process Works
Phase 1
When evaluating a purchase transaction, our objective is to assess the cash flow of the practice, the reasonableness of the purchase price, and the terms of the deal. We focus heavily on evaluating the cash flow and overhead to determine whether or not the practice can cover the debt service and leave enough left over to pay you a sufficient income to cover your household expenses. We also provide assistance with the financial evaluation and tax matters related to the acquisition of your target dental practice.
The scope of our phase 1 work will include:
- Complete a preliminary review of the practice valuation report/broker’s prospectus (if available)
- Review the past year’s tax returns and the current year-to-date profit statement of the practice and assess the historical cash flow of the practice
- Correspond and/or meet with you to discuss the pros and cons of pursuing the purchase of the target practice
- Guide you through the acquisition process and actions required to complete the transaction
- Perform an in-depth financial evaluation of the practice and prepare a cash flow analysis and stress test cash flow
- Provide you with our findings and recommendations
Phase 2
The scope of our phase 2 work will include:
- Guide you through the acquisition process and actions required to complete the transaction
- Assist you with the purchase price allocation
- Correspond and meet with you and your attorney as needed
- Help with state tax agency registration questions
What Lenders Look for When Financing a Dental Practice
Securing practice loans is often a major step in a dental practice purchase. Lenders want to see that the dental office has strong financial performance and that the buyer has the ability to manage the business.
Common factors lenders review include:
- Historical financial statements
- Adjusted EBITDA calculations
- Debt load modeling
- Insurance reimbursement mix
- Patient retention trends
- The strength of the existing patient base
Our advisors help you present the strongest financial package possible so lenders can clearly see the opportunity in your dental practice acquisition.
Benefits of Working With a Dental CPA During an Acquisition
A dental practice purchase involves far more than signing a purchase agreement. The process requires financial analysis, tax planning, and careful evaluation of risk factors.
Working with an experienced dental CPA provides several advantages:
- Independent financial evaluation without conflict of interest
- Clear understanding of the practice acquisition process
- Guidance on types of acquisitions and deal structures
- Support during negotiations with a dental practice broker
- Financial planning during the transition period
This level of support helps dentists move through dental practice transitions with confidence.
Common Financial Mistakes New Dental Practice Owners Should Avoid
- Having the correct staff model is key to a successful start-up. You want to align staff expenses with your revenue model.
- Not spending enough on marketing. Practices that want to grow should allocate 3-5% of their revenue to marketing/promotional expenses. Remember, adding 10 new patients a month is breaking even.
- Overestimating cash flow on a transition
- Not saving for estimated tax payments
- Not leaving enough working capital in the business. We recommend at least 1.5x average monthly expenses.
Financial and Operational Due Diligence That Matters
The due diligence process goes beyond simply reviewing financial statements. A thorough due diligence review helps identify hidden risks before a purchase agreement is finalized.
Important areas of review include:
- Cash flow normalization
- Chart audit and patient records analysis
- Patient attrition and retention trends
- Hygiene production ratios
- Practice management software performance
- Seller compensation adjustments
These insights help buyers understand the true market value of the dental practice and determine whether the opportunity represents a good fit.
Typical Timeline for Buying a Dental Practice
Most dental practice acquisitions follow a predictable timeline. After submitting a letter of intent, the due diligence process typically begins. During this stage, buyers review financial statements, evaluate patient flow, analyze the patient base, and confirm the financial health of the dental office.
The full transition process usually takes three to six months from the initial offer to closing. This timeline allows time for lender approval, purchase agreement negotiations, lease agreement review, and preparation for the transition period between the seller and new owners.
Frequently Asked Questions About Buying a Dental Practice
Buying a dental practice can raise many questions, especially for dentists moving from associate roles to ownership. Understanding the financial, legal, and operational details of a dental acquisition helps you make informed decisions. Below are answers to some of the most common questions dental professionals ask when considering a practice purchase.
How much does it cost to buy a dental practice?
The cost of buying a dental practice varies widely depending on factors such as location, patient base, annual revenue, and equipment value. Smaller practices may sell for several hundred thousand dollars, while larger practices with strong financial performance and a large patient base can exceed several million dollars.
How long does it take to close on a dental practice?
Most dental practice acquisitions take between three and six months from the time a letter of intent is signed until closing. During this period, buyers complete financial reviews, due diligence, lender approvals, and legal documentation before finalizing the purchase agreement and transitioning ownership.
Do I need an SBA loan to buy a practice?
Not necessarily. While many dentists use Small Business Administration (SBA) loans because they offer lower down payments and longer repayment terms, some buyers qualify for conventional dental practice loans through specialized lenders that work with dental professionals purchasing practices.
What financial documents should I review before buying?
Before purchasing a dental practice, buyers should carefully review tax returns, profit and loss statements, balance sheets, and production reports. These documents help reveal the financial health of the practice, patient revenue trends, insurance reimbursement patterns, and overall profitability.
Should I buy assets or stock in a dental practice?
Most dental practice acquisitions are structured as asset purchases rather than stock purchases. An asset purchase agreement allows buyers to select specific assets, avoid certain liabilities, and often receive favorable tax treatment, making it the most common structure for dental practice transactions.
What are the biggest risks in dental acquisitions?
Some common risks in dental acquisitions include declining patient flow, low patient retention, outdated equipment, and unfavorable lease terms. Conducting thorough due diligence and reviewing financial performance carefully can help identify potential issues before completing the purchase.
Why Dental Practices Trust Our Expertise
We focus on cash flow production and help build a post-transition budget. We want to make sure our clients acquire the right opportunity—one that suits their needs, makes their world spin, and has enough cash flow to service the debt and pay them the same or more than being an associate. Owning a practice is stressful at times, and we want to make sure our clients achieve the financial rewards of doing so.
From Passion to Profit
Ready to take control of your dental career and unleash your entrepreneurial spirit? Don’t let the transition from dentist to business owner leave you feeling overwhelmed. With over 600 successful practice owners guided since 1990, we bridge the gap between clinical expertise and business acumen. Let us help you build a thriving dental business that reflects your passion for dentistry and financial success.
Schedule a Dental Acquisition Strategy Call
At Dental Accounting Group, our advisors in Bellevue, WA, work closely with dentists to analyze opportunities, perform thorough due diligence, and develop financial strategies that support long-term success. From evaluating a dental practice broker listing to reviewing financial statements and structuring the purchase agreement, our team is here to support you every step of the way.
