Financial Planning Archives - American Practice Consultants

Common Dental Practice Buying and Selling Mistakes to Avoid in the New Year

The beginning of a new year is when many dentists decide to explore buying or selling a practice. It’s also when we see the same avoidable mistakes surface, often before a deal even gets off the ground.

The good news is that most transition problems aren’t caused by bad intentions. They’re caused by lack of planning.

Common Seller Mistakes We See Every January

Many sellers wait until they’re emotionally ready to sell before addressing the practical details that buyers care most about.

Common missteps include:

Anchoring expectations to outdated valuation rules or anecdotal comparisons
Waiting too long to organize financials and supporting documentation
Underestimating how long preparation and due diligence take
Assuming buyers will “understand” operational issues without explanation

Early planning allows sellers to control the narrative rather than respond defensively once questions arise.

Common Buyer Mistakes We See Every January

Buyers often begin the year eager to find a practice but underestimate the importance of preparation and discipline.

Common buyer mistakes include:

Falling in love with the first opportunity they see
Focusing solely on purchase price instead of deal structure
Underestimating working capital needs after closing
Not fully understanding seller transition expectations

The most successful buyers are those who remain patient and objective, even when competition is strong.

Overlooking the Importance of Structure

One of the biggest mistakes on both sides is focusing too much on the headline number.

Terms such as:

Seller transition and post-closing involvement
Timing of ownership changes
Treatment of accounts receivable
Non-compete and non-solicitation provisions

often matter just as much as price, and sometimes more, when it comes to long-term success.

Waiting Too Long to Get Guidance

Another common mistake is assuming professional help is only needed once an offer is on the table. In reality, involving experienced advisors early often prevents problems rather than reacting to them later.

Early guidance helps:

Identify red flags before time and money are invested
Align expectations on both sides
Keep transactions moving efficiently

Final Thought

A new year brings momentum, but momentum without planning can lead to unnecessary missteps. Whether you’re buying, selling, or simply considering your options, avoiding these common mistakes starts with asking the right questions early.

If a dental practice transition is on your radar in the next one to three years, the smartest move you can make this January is planning, before pressure sets in. Contact us for a free, confidential planning consultation today!

Your Practice Appraisal Is Like an X-Ray: See the Full Picture Before You Sell

You Wouldn’t Treat Without an X-Ray. Why Sell Without an Appraisal?

As a dentist, you’d never diagnose a problem without the right tools. Before recommending treatment, you rely on x-rays to see what the eye can’t—bone loss, hidden decay, fractures, infection.

— The same logic applies to selling your dental practice.

An appraisal is your practice’s x-ray. It reveals the full picture—not just what’s happening on the surface, but the deeper financial, operational, and market-based factors that influence your value.

A Pro Forma Is the Treatment Plan—But an Appraisal Is the X-Ray

Sometimes dentists think an appraisal is going to spell out exactly how a deal will be structured, what the sale terms will be, or how much they’ll take home after taxes. That’s not the job of the appraisal.

Instead, think of it this way:

Appraisal = Diagnostic Imaging

(Unbiased look at what’s happening in the practice)
Pro Forma = Treatment Plan

(How the transition might be structured once a buyer is involved)

Just like you wouldn’t skip the imaging and go straight to the procedure, you shouldn’t skip the appraisal and assume the outcome of a future sale.

What a Dental Practice Appraisal Tells You

A well-done appraisal gives you:

Fair Market Value of Your Practice
Breakdown of income streams (doctor vs hygiene)
Adjusted earnings after normalizing expenses
Valuation of equipment, goodwill, and other assets
Benchmark comparisons to similar practices
Insight into what a buyer or bank would see

It’s not a generic estimate. It’s a data-driven, market-tested assessment of what your practice is really worth.

Why This Matters—Even If You’re Not Selling Today

Even if you’re a few years away from retiring or transitioning, having an appraisal now can help you:

Set realistic expectations
Identify weak spots before they impact value
Make strategic upgrades or clean up financials
Plan for taxes, retirement, or associate transitions
Negotiate better with DSOs or private buyers in the future

— Dentists who plan ahead nearly always achieve better outcomes when they do sell—because they’ve had time to prepare.

What Happens Without an Appraisal?

Skipping this step can lead to:

Overpricing your practice and scaring off buyers
Underpricing it and leaving money on the table
Getting blindsided by issues during buyer due diligence
Delays, renegotiations, or failed deals
Avoidable stress in a process that’s already emotional

An appraisal isn’t just helpful. It’s essential.

Final Thoughts: Get the Full Picture Before You Decide

Your dental practice is likely one of your most valuable assets. Whether you plan to sell this year, in five years, or just want to understand where you stand—an appraisal gives you clarity, confidence, and control.

— Just like you’d never treat without a diagnosis, don’t plan your future without knowing what your practice is really worth.

Ready for a Confidential Appraisal?

At American Practice Consultants, we provide dental practice appraisals that are:

Thorough and unbiased
Backed by real-world market data
Designed for both sellers and strategic planners

No pressure. No sales pitch. Just clarity.

— Contact us today to schedule your confidential dental practice appraisal.

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Would you like a companion one-pager that summarizes the “X-Ray vs. Treatment Plan” analogy to use in emails, presentations, or handouts?

Ownership vs. Associateship

Many dentists face a pivotal question early in their careers: Should I buy my own dental practice or continue working as an associate? While both paths have their merits, the long-term financial rewards of ownership often outweigh the short-term convenience of employment.

In this article, we’ll break down the key financial benefits of dental practice ownership compared to working for someone else — and why now might be the right time to take the leap.

Higher Income Potential

📊 Associates Earn Steady Salaries…

Associate dentists typically earn a fixed percentage of collections or production, often ranging between 25%–35%, depending on the contract and office overhead. In high-production offices, this can be a solid income — but there’s a cap.

🚀 Practice Owners Build Real Wealth

As a practice owner, your earnings are not limited to a percentage. Instead, you benefit from:

All net profit after expenses.
Control over fees, services, and patient flow.
Strategic investments that grow your bottom line.

Example:

Associate: Earns $180,000/year with no equity.
Owner: Generates $1.1M in revenue with 60% overhead = $440,000 in net income.

Equity and Business Value Accumulation

Associates trade time for money — and once you stop working, the income stops too. Practice owners, however, build a saleable asset.

🏢 The Value of Practice Equity

Dental practices typically sell for 50%–85% of collections. That means if your practice collects $1M annually, it could sell for $500,000–$850,000 (or more) when you retire or exit.

This practice equity is wealth you won’t get as an employee.

Tax Advantages for Business Owners

Owning a dental practice unlocks a range of tax-saving strategies not available to associates.

💰 Common Tax Deductions for Owners:

Equipment and technology purchases.
Continuing education and travel.
Business-related meals and mileage.
Retirement contributions through SEP-IRA, Solo 401(k), or defined benefit plans.
Depreciation on real estate or leasehold improvements.

These deductions can significantly reduce your taxable income — something salaried associates miss out on.

Control Over Your Career and Schedule

While not strictly financial, autonomy has real economic value.

As an associate, your income and hours are controlled by someone else. But as an owner, you can:

Choose your work schedule.
Build a team and culture that reflects your values.
Expand into new services or specialties that increase profitability.

More control = more opportunity to grow income and reduce burnout.

Long-Term Wealth Through Real Estate Ownership

Many dental practice owners eventually buy the building that houses their practice — unlocking another layer of wealth.

🏠 Benefits of Owning Your Office Space:

Build equity in commercial real estate over time.
Receive rental income from the practice (which you own).
Enjoy tax advantages like depreciation and expense write-offs.
Retain the building as a separate investment asset after practice sale.

Owning both your practice and your property is a powerful path to long-term financial security.

Greater Financial Stability in the Long Run

While associates may enjoy predictable paychecks, their income can be vulnerable to:

Practice downsizing.
Production slowdowns.
Corporate consolidation or ownership changes.

As an owner, your income is tied to the success of a business you control, giving you more influence over your financial destiny.

Financial Comparison: Associate vs. Owner Over 10 Years

Metric	Associate Dentist	Practice Owner
Average Annual Income	$180,000	$400,000
Total Earnings (10 years)	$1.8M	$4M
Business Equity Gained	$0	$700,000 (sale value)
Tax Advantages	Limited	Extensive
Real Estate Equity	$0	$400,000+ (if property owned)

Note: Figures are illustrative and will vary based on location, efficiency, and ownership decisions.

Is Ownership Right for You?

Dental practice ownership isn’t without challenges — it requires responsibility, leadership, and a willingness to learn business skills. But for those willing to take the step, the financial upside is often substantial.

Working with an experienced dental practice broker can help you:

Evaluate if you’re financially ready.
Find the right practice in your preferred location.
Avoid costly mistakes during the transition.

While associateship can be a great starting point, practice ownership remains the best path to long-term financial freedom in dentistry. From higher income and equity to tax savings and control, owning your own practice allows you to reap the full rewards of your training and hard work.

Ready to take the next step?

Contact American Practice Consultants for a confidential consultation and explore current dental practices for sale in New Jersey and Eastern Pennsylvania.

Introducing Kevin P. Cooper as the New Owner

Elevating Dental Practice Transitions in Eastern Pennsylvania and New Jersey

Moorestown, NJ – American Practice Consultants, Inc., a leading dental broker and practice transitions company serving Eastern Pennsylvania and New Jersey, is delighted to announce the appointment of Kevin P. Cooper as the new owner, effective May 1st, 2023. With extensive experience in assisting dentists buy and sell dental practices, Kevin has been an integral part of the company since 2017, working alongside his father, Philip A. Cooper, DMD.

Dr. Cooper established American Practice Consultants in 1985, recognizing the need for expert guidance in dental practice transitions. Through years of dedication, he has successfully built the business from the ground up, completing numerous buy and sell transactions within the region. Dental professionals trust his expertise and rely on his proven track record.

Drawing upon over 16 years in the corporate world, where he excelled at Gartner in Stamford, CT, and the American Board of Internal Medicine in Philadelphia, PA, Kevin brings a unique blend of customer service, business acumen, and healthcare knowledge to his new role. He is enthusiastic about continuing to assist dentists in buying, selling, and valuing dental practices. Dental professionals can leverage Kevin’s expertise and background to navigate the complexities of dental practice transitions seamlessly.

While Kevin assumes ownership, Phil will remain involved in all aspects of the business, ensuring a smooth transition. Phil’s unparalleled market knowledge is invaluable, and he is excited to witness Kevin take charge of the day-to-day operations. Together, they will continue to deliver exceptional dental broker services and support to professionals across Eastern Pennsylvania and New Jersey.

American Practice Consultants, Inc. remains committed to providing unparalleled dental practice brokerage and transition services. Under Kevin’s leadership, the company is poised to further enhance its brokerage service offerings, catering to the specific needs of dental professionals seeking to buy or sell a dental practice. As a trusted dental practice broker in Eastern Pennsylvania and New Jersey, American Practice Consultants is dedicated to delivering results.

Whether you are a dentist looking to buy a dental practice or considering selling your current practice, American Practice Consultants, Inc. is your go-to partner. Contact us today to experience the expertise and personalized guidance that sets us apart as the premier dental practice broker in Eastern Pennsylvania and New Jersey.

Dental Practices For Sale NJ & PA | Appraisals | Brokers

Category Archives: Financial Planning

Common Dental Practice Buying and Selling Mistakes to Avoid in the New Year

Common Seller Mistakes We See Every January