If you have completed at least three years working as an associate for an established dental practice, the banks will consider most any amount. You have a dental license and are destined to produce good revenue.

The qualifying factor is whether the practice can support the cash flow needed to pay all monthly practice expenses, provide you with at least 25% of the practice's gross collections as your salary, and still place money into a savings account each month.

Financial institutions familiar with dental loans understand that buyers carry significant student loan debt, along with expenses for insurance, automobiles, and family obligations. Banks are actually more willing to lend to buyers with a family, as they view that as added financial security.

Banks are not overly concerned with credit scores below 800, because they are keenly aware of a new dentist's financial position and earning potential. What matters most is your dental license, at least three years of associate experience, and familiarity with the business operations of a successful practice. The bank will also evaluate the specific practice you are considering purchasing.

First, interested parties must sign a Non-Disclosure Agreement (NDA). That document protects the seller by preventing other dentists from learning the practice is for sale. After signing, you are obligated to keep all confidential financial information to yourself. Your attorney and CPA are familiar with this document, as it is standard in dental practice purchases.

Buyers will need to review a number of items before considering an offer, including: three years of federal tax returns, production versus collection reports for at least three past years, daily production by dentist for three years, a profit-and-loss statement for each year, a practice analysis with 90-day patient appointment projections, and a breakdown of insurance participation as a percentage of gross revenue.

A practice broker should be able to provide a 30–40 page Practice Profile document containing all of the above reports along with an owner overview. That document accounts for outside community influences that may affect continued growth, and covers employees, wages, equipment age, community factors, and much more.

Practice brokers have several tools for valuation — but buyers should know that the bank financing the deal will use their own appraiser. Also important: the real value is in the mind of the buyer, and a valuation is only valid on the day it is presented.

The first consideration is your personal impression. Workability is key — nothing replaces the comfort and confidence that comes from working with someone you respect and trust. While many qualified brokers sell commercial real estate, the field narrows considerably when it comes to dental practice sales.

Select a broker based on the number of satisfied dentists they have transitioned. A large office and high volume of sales do not equal expertise; in large brokerages, you may get lost in internal processes and face additional layers of approval. The most effective broker is the one you are most comfortable with and who has deep experience.

Require a written, detailed plan of action outlining how the broker will search for your ideal practice. A skilled practice broker will provide this without being asked.

After a sale is completed, a drop in patient participation of 25–30% is typical. If the buyer establishes strong patient rapport quickly, attrition will be lower. It is the buyer's responsibility to make up any shortfall.

Negotiating a detailed transition agreement is paramount. That document defines how much time the selling dentist will spend in the practice after the close of escrow and the specific role they will play during that post-sale period.

Attrition will be much higher when the buyer's existing practice is more than three miles from the practice being sold. Most sellers will not consider selling patient files alone unless the practice is already in serious decline — one where ownership took too many days off or became distracted by other interests, leaving production too low to attract institutional financing.

If you are considering purchasing only the files of a declining practice, understand that most files will be inactive and stale. These transactions are typically completed without a practice broker. The risks and processes remain the same, and the cost of escrow will likely outweigh the potential benefits.

Receivables from a purchased practice typically stay with the seller. The only common exception is an orthodontic practice. The reason is straightforward: existing patients are likely to pay the practitioner they know but are unlikely to pay a new buyer. You do not want to be pursuing patients for old debt while simultaneously trying to build a new doctor-patient relationship.

This area introduces real complexity. Is an incoming payment for old seller debt or for today's procedure? If you are treating patients with outstanding balances owed to the seller, instruct staff on a clear, agreed-upon procedure between buyer and seller.

When checks arrive by mail made out to the seller, simply forward them. The Practice Sale Agreement (PSA) should include a provision charging the seller a 5% fee for managing those payments. This agreement typically covers only the first 90 days. After that, any payments arriving by mail go to the buyer.

In reality, you cannot legally prevent someone from earning a living. However, reasonable distance restrictions placed in the Practice Sale Agreement (PSA) are generally honored by courts. A non-compete radius of 20 miles provides solid protection. Most studies show that even patients loyal to a selling dentist will not consistently travel more than three miles to continue care with them.

Dissolve the existing corporation and create a brand-new corporation using the same name — on the very same day. Dissolution shields you from any disputes or liabilities the prior entity may have accumulated. Forming the new corporation on the same day prevents anyone else from registering that corporate name.

The result is a seamless process that is invisible to patients and staff, yet gives you complete protection from any problems the previous ownership may have experienced.

Minimizing change is the single most effective way to retain patients. This includes resisting the urge to make rapid changes to the office appearance or procedures within the first six months. Buying a practice is a significant investment, and patient retention is your best security.

It is recommended to keep the seller's name on the marquee, phone listing, front door, and website. Some buyers retain the seller's name alongside their own for years — with excellent results. If the practice has maintained healthy growth, the location is clearly working. A poor location will cost you continuously in advertising and mailers.

The degree of seller involvement depends entirely on how well buyer and seller completed escrow. If mutual respect exists, having the seller present to introduce the buyer to patients can be very beneficial.

The risk is that some sellers find it difficult to allow staff to shift their allegiance to the buyer. Every dentist has their own way of doing things, and a seller who spent years developing policy and procedure may struggle to let go.

At the close of escrow, the seller should send a letter to all patients — approved by the buyer — thanking them for their years of support, introducing the new buyer, and encouraging patients to give the buyer the same respect they afforded the seller. The letter should highlight the new techniques and procedures the buyer brings to the practice.

This is one of the most challenging areas in any practice sale. It requires a written understanding and is a key reason for a thorough transition guide. The guiding principle is always to put the patient first. Under no circumstances should a buyer and seller engage in verbal disagreements in front of staff or patients.

Where mutual respect exists, an arrangement can be made to allow the seller access to a portion of the practice to complete sensitive procedures, with an associate fee structure compensating them for that work. Be aware: the longer the seller remains active, the more likely disagreements will develop.

Discussing any deficiencies in the seller's work in progress with staff or patients is strictly forbidden — it only drives a wedge between all parties. Process concerns are for private conversation at home, not for the practice floor.

The transition guide should clearly spell out what the seller is expected to do while present. Even something as simple as sitting in the practice, greeting patients in the hallway, or chatting with staff provides reassurance and helps patients feel comfortable with the change.

The seller should visit only on a drop-in basis and for short periods of time. They should not offer opinions on procedures in progress. Their greatest contribution is inspiring staff confidence that the practice is in good hands. Staff can use these visits to ask the seller about retirement plans, helping them emotionally complete the transition.

Weekly early-morning motivational meetings are one of the most effective tools for building a cohesive team. Create an open forum where staff can ask questions and voice concerns. The quickest way to smooth the transition is to limit seller exposure after the close of escrow — a continued seller presence can create an awkward environment and slow the loyalty transfer.

An equipment list not only categorizes each piece but — where possible — identifies manufacturer and serial numbers. Nothing disrupts a smooth transition more than misunderstandings about what was included in the sale. The equipment listing clearly verifies what is part of the sale, and a second list identifies items the seller is retaining.

Sellers will have personal items with sentimental value — an office desk, wall fixtures, paintings. These must be clearly listed as not included in the sale. Addressing this in advance eliminates the disputes that have derailed other closings.

A practice without job descriptions creates uncertainty and risk, particularly regarding database access and expectations. Every staff member with access to the main computer and patient data should have a signed job description that includes a clear paragraph stating that all data is owned by the buyer and is protected from unauthorized personal use.

Without this protection, a departing front-office employee can — and in documented cases has — taken patient contact information to a competitor and actively solicited those patients. In one known scenario, a buyer lost 30% of patients loyal to that employee within one month of her departure.

The healthiest practices maintain a balanced mix of cash patients, multiple insurance carriers, and patients who finance their treatment plans. Over-reliance on a single insurance carrier concentrates risk. When one revenue sector falls short, the other two can carry the practice.

When a practice is heavily dependent on one insurance carrier, the sale price becomes soft. That increases the buyer's risk and justifies a lower offer. Insurance carriers also frequently reduce their reimbursements for a new buyer — another reason diversification matters from day one.

After the sale and the dust settles, you have a powerful opportunity to introduce yourself to the community. Contact the local chamber of commerce, become a member, and arrange a ribbon-cutting ceremony. The chamber will invite local leadership, civic clubs, police, and fire department. Refreshments are appropriate — cookies and punch work well.

If you want to connect with younger families, invite the local high school band and cheer squad. Send invitations to all existing patients to ensure a strong crowd. Have the practice open for brief tours with staff available to guide visitors and maintain order throughout.

Complete the following items as promptly as possible after the close of escrow:

• Apply with all insurance companies currently used by the practice.
• Obtain seller authorizations and transfer all utilities into the buyer's name.
• Obtain access codes, original logo artwork, website credentials, and letterhead files.
• Ensure the lease follows the corporation (if a corporation is involved).
• Confirm that all practice software agreements transfer with the sale.
• Verify that 401(k) and EDD accounts are current — typically handled during escrow.
• Thoroughly review the office policy and procedure manual.
• Collect complete contact information for all vendor accounts.
• Change the locks on all practice doors.
• Change passcodes on the main data computer and all systems.