Buying Tutorial


Whether you’re a new graduate, you recently moved to California, you’re tired of working as an associate, or you simply want to buy another practice, finding the right practice can be a challenge.

Yet the rewards of ownership are clear. Dentists who own their practices enjoy greater flexibility in their schedule, the autonomy to direct their ideal treatment plans, and increased opportunity for financial reward. Despite these advantages, many dentists we meet feel overwhelmed by the process of evaluating and purchasing a practice.

At Integrity Practice Sales, we believe that buying a practice should be fair and simple. We’ve helped hundreds of doctors just like you find the ideal practice. Read on to build your confidence in the process and take the first step towards success in practice ownership.

If you’re looking for more information, download our FREE, 45-page Ultimate Buyer’s Guide E-book.




Before you can start looking for a practice, there are a number of important questions to ask yourself. Depending on where you are in your career, these questions will be slightly different.

In some rare cases, a dental practice may be purchased by a recent graduate (less than two years out of school). If you are highly confident in your clinical skills and you have access to financing, then perhaps you’re ready to buy a dental practice.

Many of the dentists looking to buy practices today are currently practicing as associates and looking to purchase their first practice. Most lending institutions require that a dentist have at least two years of clinical experience before financing a practice acquisition, and most doctors want this experience to learn and gain confidence in their clinical skills.

If you’re an experienced dentist who owns a practice and is looking to relocate, merge practices, or add an additional location, then this guide is for you, too! We’ve helped hundreds of doctors transition and my hope is that you find considerable value in this guide, especially as you get into the details of the initial evaluation and due diligence process.


Here are a few questions to help you think through your goals. For a more detailed discussion of these goals, download our FREE, 45-page Ultimate Buyer’s Guide E-book.



  • Have you found a location you could live and work for the long-term?
  • Would you be flexible about relocating?
  • How important is a flexible schedule that you control?


  • Do you have a budget?
  • Will your current practice situation meet your long-term financial goals?


  • What are your most important clinical beliefs?
  • What, if any, specialty areas would you like to focus on?
  • Does your current practice situation allow you to focus on your desired clinical goals?

Of course, these questions don’t cover everything. Other considerations include whether you want to operate a solo practice or buy into a partnership with another dentist (or dentists). At the end of the day, you have to carefully consider whether you’re ready for practice ownership! Speak to your trusted mentors and advisors.

If you have any questions that we have not covered please don’t hesitate to contact us.


When you purchase a dental practice, the value of the equipment and the build out (dental specific improvements to the space) is only a small percentage of the price.

Generally, intangible aspects account for 60% to 80% of the practice. These intangible aspects include reputation in the community, relationships with patients, goodwill (the value of the patients continued patronage of this particular practice), and restrictive covenants (so that the seller cannot open a new practice across the street and take her old patients).

As you will see, what you are really purchasing is a revenue stream based on aspects that cannot be measured directly.

This is why trusting your gut is so important. If you don’t believe in the transaction, then the value of the practice for you is very low. As a dentist, a consultant, and a broker, I have seen dentists transition successfully into a new practice so many times that my confidence is very high. But you must believe in the deal as well!



The value of a dental practice is what a willing buyer would offer a willing seller under the prevailing market conditions at the time of the transaction. This is simple but profoundly true.

In practical terms, however, those who appraise practices can generally predict with a high level of accuracy what a willing buyer would be willing to pay. There is an art and a science to valuing a dental practice. On the science side, we use several fairly straightforward guidelines and formulas. You can plug the numbers in and…voila! The art side of the equation is where things get tricky. Read more about how to value a dental practice here.

If you have any questions that we have not covered please don’t hesitate to contact us.


At the end of the day, cash flow is king. It only makes sense to buy a dental practice if you can make enough money in the practice to pay the overhead, pay the bank, and still generate a reasonable income for yourself and your family. If a practice is valued correctly, it will support you and your family.

Don’t get too focused on the percent of last year’s collections or the multiple of last year’s net income. What’s important is what YOUR cash flow is going to be after you pay your expenses, including your bank loan. Trust your advisors. Trust the bank, since they will not want to risk their money on anything but a sure deal. Talk to your agent if you have concerns. No one (at least no one at Integrity Practice Sales) is trying to sell you anything if it’s not in your best interest. Doctors buy practices every day, and no deal is 100% perfect for the buyer or the seller, but the overall transition MUST be good for both parties, or it shouldn’t happen!



Now that you’re ready to look for a practice, here are the first things you need to do to put yourself on the path to finding your ideal practice!

When you buy a house, you need to know how much you can afford. Of course, unlike a house, the point of buying an existing dental practice is that it’s already profitable, so you can take home an income immediately.

It is a good idea to speak to a banker who specializes in dental practice finance as you begin your search. They can help you get your finances in order, deal with any potential problems (like a low credit score), and give you a good idea about the size of practice they would be willing to finance for you.

Relationships are key. It’s better to have a relationship with a banker (and a broker) before you find a practice than flipping through the journals trying to find someone when you absolutely need them.

Look through every resource. The Dental Trader and Dental Shopper, the CDA and local dental societies websites, and, of course,

There are many brokers with many practices, and many journals and dental magazines that list hundreds of potential offices. We suggest you contact one of our agents in the area you are focusing on. This way you have someone to answer your questions AND someone to keep you in mind if they find a nice practice for you to look at BEFORE we start marketing the practice.

Many practices are sold prior to being marketed when a broker or agent has a relationship with a buyer and lets them know about the practice first! Relationships matter and having someone on your side keeping their eyes open for you can make all the difference.

Be the first to hear about practices that meet your criteria by joining our ‘inside buyer’ list. To join the list, simply fill out the form here and give us some information about what you’re looking for.

Once you identify a practice that might work well for you, here’s what we suggest you review prior to making an offer.

Keep in mind that the actual “due diligence” phase of buying a practice (verifying the cash flow, charts, lease, bank approval, etc.) comes after you submit a letter of intent.

Once you identify a potential practice (and often well before), you will probably need to sign a Non-Disclosure Agreement (NDA).

This very important document emphasizes the importance of keeping every aspect of the practice sale in strictest confidence. While some brokers don’t worry about confidentiality, we believe that successful transitions are carefully managed, which is why we require every potential buyer to sign an NDA.

Rumors have a way of spinning out of control, and proper introductions to patients, staff, and the community can go a long way in making a transition successful. The NDA protects the seller and future buyer’s reputation and supports the foundation of trust central to every successful practice sale.

Most brokers provide a prospectus with practice information and pictures. This information will be correct to the best of the broker’s knowledge – but you should always verify the information in the due diligence phase.

At this stage, discovering the facts is only half the challenge – the other half is interpreting the facts.

Consider buying a house. You’re touring homes with your real estate agent and you come across a decrepit home with peeling paint and a severely overgrown yard, but it’s in a great neighborhood. What do you see? Do you see the worst home in the neighborhood and demand an explanation from your real estate agent? Or do you see a fixer-upper with tremendous potential for you to put your stamp on?

There is no right or wrong answer here. It’s completely up to you.

Perhaps you want the move-in practice that cash flows well, has every system in place, looks amazing and would require very little effort on your part except for showing up and seeing patients. Or maybe you’re hoping to buy a real fixer-upper practice with tremendous potential for growth at a value price.

Most likely, you want somewhere in between. The fundamentals need to be strong, but some issues can be seen more as missed opportunities than fundamental problems with the practice.

Think about your ideal practice. At this stage, you should look at the practice like you might initially evaluate a house for your primary residence. Does the practice meet your requirements?

  • Could you picture living and working in this area? How’s the commute?
  • How does it fit your “buyer profile”?
  • Do you like the look, and feel of the practice? Remember that old flooring, paint, and landscaping can be replaced, but parking and layout are typically hard to change.
  • Does the estimated buyer’s net income meet or exceed your budgetary requirements?
  • Does the number of practice days per week match your preferred schedule?

Once you decide that the practice meets your basic criteria, it is time to view the practice. This is generally done after hours because of the confidential nature of most practice sales.

Remember, your ideal practice might not look exactly like you imagine right now. Paint, artwork, carpets, etc. are easy and inexpensive to change. I’ve seen many doctors discover that a practice that doesn’t necessarily fit their ideal profile ends up being even better than they were hoping for. Keep your eyes and your options open!

If you are ready to buy, your initial evaluation looks good, and your advisors like the practice, the next step is to present to the seller a letter of intent to purchase the practice.

This letter spells out the basic details of the sale including a good faith deposit, price for the practice, contingencies, and expected close date. Again, this letter is often required before the seller will give you all of his or her personal financial information and begins the official due diligence period.

The most important piece of advice across the board is to hire experts who specialize in working with dentists. Every professional who specializes in working with dentists can tell you horror stories about dentists who had their family attorney get involved with a practice sale.

We know dentists, and we work with their issues every day. We know how to help you be successful.

  • Bankers: If you’re not already working with a lender, get in touch with a banker who specializes in practice transitions. (We have a helpful list of trusted lenders here.) The banker’s first obligation is always to you as the buyer and not to the broker, at least insofar as financing a bad deal would be bad for their bank. They are in your corner.
  • Dental CPA: Consider retaining a dental CPA to assist with financial and tax details. The bank will do this at “no additional fee”, but if you want extra protection you can hire an accountant for a second look.
  • Dental Attorney: Retain an experienced dental attorney to review the transition details.

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Once you have a signed Letter of Intent, it’s time to take a closer look at your potential new practice. Due diligence is one of the most important aspects of preparing for a successful transition.

To get a detailed run down of the due diligence process, download our FREE, 45-page Ultimate Buyer’s Guide E-book.

Financial Review: The first step in evaluating a practice that you think you want to purchase is to review the practice financials You should already have determined that – based on the practice prospectus – this practice could support you and your family after you pay all of the practice expenses and the bank loan. Now it’s time to double check all the figures.

Patient Charts and Clinical Review: The next step in evaluating the practice is to review the patient charts. Charts can tell you what type of dentistry the seller performs, how the practice cares for and follows up with patients, how patients are scheduled, and how the practice makes financial arrangements.

Advertising and New Patients: Evaluating the marketing of the practice can tell you what kind of potential the office has and how much investment, if any, you’ll need to make to keep the new patient flow going.

Staff Evaluation: Since most practice sales are confidential, you probably won’t have an opportunity to meet the team before closing escrow. The best way to find out about the team is to talk to the selling doctor about their personalities, strength and weaknesses, and general attitudes. It is important to also discuss the doctor’s managerial style. You don’t need to be the same as the seller, but it’s important that you understand the workplace environment that the seller cultivated and feel confident about your abilities to handle the transition period.

SchedulingReview the Appointment Book and Recall System. Look at how the day is scheduled. Would you be comfortable doing that dentistry? If they place a crown every 15 minutes, do think you could keep up? Can you picture yourself working their schedule? While schedules are flexible, this can be a deal killer.

As you complete due diligence, your attorney will be working with the seller’s attorney to finalize the terms of the deal. Once you are happy with the practice, it’s time to sign the Purchase and Sale Agreement.

This is the final document that clearly spells out all the dental-specific requirements of a practice sale. I should reiterate here again that it is crucial for you to employ a dental specific attorney who is thoroughly familiar with the ins and outs of dental practice sales.

The traditional terms for a covenant not to compete (the restrictive covenant) prohibit the seller from practicing within 15 miles for 5 years after the sale, but this will vary greatly depending on whether it’s a rural or urban environment and other factors.

As you prepare to close the deal, you’ll need to set yourself up as a proper business entity. At Integrity Practice Sales, we will assist you with getting up and running in your new practice.

Buying a dental practice is a big step to take, but the personal and financial rewards are great. We have seen it work so many times and are confident that you too can succeed as a practice owner.

Be the first to hear about practices that meet your criteria by joining our ‘inside buyer’ list. To join the list, simply fill out the form here and give us some information about what you’re looking for.


Do You Have Other Questions?

Be sure to visit Buyer FAQ to answers to the following questions

  • Why should I buy a practice rather than start one?
  • How are dental practices priced?
  • What happens when I find a practice I want to buy?
  • Why should I go to a business broker?
  • Do I need an attorney?