Starting Your Ownership Journey? Here’s What You Need to Know
Buying your first dental practice is one of the most exciting—and intimidating—milestones in your career. You’ve probably spent years dreaming about being your own boss, controlling your schedule, and building something that’s truly yours.
But here’s the catch:
Not every “profitable” practice is a good deal. And not every fixer-upper is a bad one.
This post will help you look beyond surface-level numbers and understand the true value and potential of a dental practice—so you can buy with confidence and avoid expensive mistakes.
What Looks Like a Good Deal (But Might Not Be)
Let’s start with a few red flags disguised as selling points:
“High Gross Collections”
A practice collecting $1.2M may sound great—until you realize the overhead is 75%, the seller refers out most procedures, and staff turnover is high. Collections are only part of the story.
“Significant Price Reduction!”
If a practice has been sitting on the market or the price has dropped dramatically, ask why. Is there outdated equipment? A shrinking patient base? A lease issue?
“Modern Technology”
New equipment is great—but don’t let it distract you from more important factors like active patients, hygiene recall, and staffing stability.
- Remember: A deal is only good if the fundamentals are strong.
What REALLY Makes a Practice a Good Deal
Here’s what experienced buyers and dental brokers look for:
1. Consistent, Well-Documented Revenue
Look for 3–5 years of stable or growing collections, with clear financials (P&Ls, tax returns). Watch for red flags like sudden spikes or unexplained dips.
2. Healthy Hygiene Department
Hygiene production should make up 25–35% of total production. A strong recall program means loyal patients and predictable revenue.
3. Staff Stability
Long-term employees = smoother transitions. High turnover = potential headaches. Ask how long the team has been in place and how they’re compensated.
4. Reasonable Overhead
Overhead (excluding doctor compensation) should ideally be in the 55–65% range. Anything significantly higher might hurt profitability.
5. Good Location and Lease Terms
Is the practice easy to access? Are there growth opportunities nearby? Is the lease assignable? Watch out for balloon payments or expiring leases without renewal options.
6. Seller Willing to Assist in Transition
A cooperative seller who’s willing to stay on for a few months post-sale can help retain patients and ease staff concerns.
Bonus: Questions to Ask During Due Diligence
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How many active patients are there (patients seen in the last 12–18 months)?
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What procedures does the seller perform in-house vs. refer out?
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What’s the payer mix (PPO, FFS, Medicaid)?
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Are there any large corporate competitors nearby?
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What’s the equipment age and condition?
Watch Out for These First-Time Buyer Mistakes
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Falling in love with the décor and ignoring the financials
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Overestimating your ability to “fix” a bad practice
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Underestimating staff transition challenges
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Overpaying for goodwill without proof of patient loyalty
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Failing to hire a dental-specific CPA and attorney during the process
The best buyers stay curious, skeptical, and supported by the right team.
A Good Deal Isn’t Just About Price
It’s about value, momentum, and potential. A $650,000 practice with low overhead, a loyal staff, and consistent patient flow might be far better than a $1.3M practice with high attrition and chaos behind the scenes.
Ask yourself:
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Can I realistically step into this role and succeed?
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Will this practice support my lifestyle and loan payments?
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Does the staff and patient base align with my clinical and leadership style?
Final Thoughts: Make Your First Practice a Launchpad, Not a Lesson
The first practice you buy sets the tone for your entire career. Don’t rush. Don’t guess. And don’t assume bigger is always better.
With the right team, a clear process, and a healthy dose of due diligence, you can make a decision that sets you up for years of personal, professional, and financial success.
Need Help Finding and Evaluating the Right Practice?
At American Practice Consultants, we specialize in helping first-time buyers navigate the process with confidence. From reviewing financials to evaluating culture and location, we’re here to make sure your first deal is a smart one.