Category Archives: Strategies

Accepting an offer on your practice feels like the finish line.

In reality, it’s the start of the most structured phase of the transition.

This is where expectations matter. Sellers who understand the process experience far less stress — and far fewer surprises — than those who assume closing is just a formality.

If you’re thinking about selling, here’s what actually happens after you accept an offer.

1️⃣ The Letter of Intent (LOI)

Before a full contract is drafted, most transactions begin with a Letter of Intent.

The LOI outlines:

• Purchase price

• Basic deal structure

• Allocation concepts

• Transition expectations

• Timeline framework

It is typically non-binding (except for confidentiality and exclusivity), but it sets the roadmap for the transaction.

Clarity at this stage prevents misunderstandings later.

2️⃣ Due Diligence

Once the LOI is signed, the buyer begins deeper review.

This may include:

• Detailed financial analysis

• Production by procedure review

• Active patient count validation

• Insurance participation review

• Equipment evaluation

• Lease review

This phase is about verification — not renegotiation. However, inconsistencies or surprises can impact the process.

This is why clean financials and organized documentation are so important before going to market.

3️⃣ Drafting the Asset Purchase Agreement

The Asset Purchase Agreement (APA) is the binding contract that governs the sale.

It addresses:

• Assets being transferred

• Accounts receivable treatment

• Non-compete terms

• Representations and warranties

• Closing conditions

• Default provisions

Both attorneys review and negotiate this document. Even when all parties are aligned, this typically involves several revisions.

This stage requires patience and professionalism.

4️⃣ Buyer Financing and Underwriting

If the buyer is obtaining financing (which most do), the bank will move the file into underwriting.

During underwriting, the lender reviews:

• The practice financials

• The buyer’s personal financial profile

• Debt service coverage

• Lease terms

• Final contract structure

Loan approval is not automatic. It is structured and methodical.

This step can take time, and it is largely outside the control of both buyer and seller.

5️⃣ Lease Assignment or New Lease Agreement

If you lease your space, this is a critical component.

The landlord must either:

• Assign the existing lease, or

• Negotiate a new lease with the buyer

Unresolved lease terms are one of the most common causes of closing delays.

Strong early communication with the landlord helps avoid unnecessary stress.

6️⃣ Bulk Sales Filing (Where Applicable)

In many states, a bulk sales filing must be submitted prior to closing to notify taxing authorities of the transfer of business assets.

This process often includes:

• Filing with the state

• Waiting periods

• Clearance confirmation

It’s procedural — but it must be handled properly to protect all parties.

7️⃣ Final Walkthrough and Closing

As closing approaches:

• Loan documents are finalized

• Funds are wired

• Inventory is verified

• Keys and access are transferred

On closing day, ownership changes.

What began as an idea months (or years) earlier becomes official.

What Sellers Often Underestimate

The time between accepting an offer and closing typically ranges from 60–90 days, sometimes longer depending on financing and lease negotiations.

The process is structured. It is deliberate. It involves multiple professionals.

The smoother your preparation before listing, the smoother this phase tends to be.

The Role of a Transition Advisor

A well-managed transaction isn’t just about finding a buyer.

It’s about:

• Setting realistic timelines

• Coordinating attorneys and lenders

• Anticipating potential delays

• Protecting value

• Keeping emotions steady

The goal is not just to get to closing — it’s to get there with confidence and clarity.

Considering a Transition?

If you’re considering selling your dental practice, let’s schedule a confidential consultation so you understand the process and can plan your transition with clarity and confidence.

When you know what to expect, the path forward becomes much clearer.

It’s tax season.

For most practice owners, that means gathering documents, reviewing numbers, and trying to minimize what goes out the door to the IRS.

But here’s something many dentists don’t fully realize:

Your tax return is one of the most important documents in determining the value of your practice.

If you’re thinking about selling in the next few years, what’s on that return matters — sometimes more than you think.

Let’s break down why.

📊 Buyers and Banks Rely on Tax Returns — Not Just Your Word

When a buyer makes an offer on your practice, their lender doesn’t base approval on optimism.

They base it on documentation.

Banks typically request:

• The last 3 years of business tax returns

• Year-to-date profit and loss statements

• Production and collection reports

• Personal financial statements

Your tax return becomes the foundation for underwriting. If the numbers don’t support the purchase price, the deal becomes harder to finance — even if the practice looks strong operationally.

🧮 Taxable Income vs. True Earnings (Understanding “Add-Backs”)

Many practice owners run legitimate business expenses through the practice that are partially discretionary:

• Auto expenses

• Travel

• Cell phones

• Continuing education

• Certain family payroll arrangements

In a valuation, these may be considered “add-backs” — expenses that are added back to determine true cash flow.

However, here’s the important part:

Add-backs must be defensible and documented.

Aggressive deductions without clarity create doubt.

Buyers and lenders prefer clean, explainable financials over creative accounting.

⚠️ The Risk of Over-Minimizing Income

It’s completely legal — and common — to structure your business in a tax-efficient way.

But if you’re consistently driving your net income down as low as possible, it can impact:

• Practice valuation multiples

• Buyer confidence

• Loan approval strength

• Negotiating leverage

You can’t have it both ways indefinitely.

If you plan to sell in 2–3 years, it may make sense to start thinking strategically about how your reported income reflects your practice’s true earning power.

📈 Why Planning Ahead Matters

The strongest practice sales I see aren’t rushed decisions.

They’re planned.

When an owner starts preparing 2–3 years in advance, we can:

• Normalize expenses thoughtfully

• Identify opportunities to increase profitability

• Improve hygiene percentage

• Address declining trends early

• Position the practice for maximum lender confidence

Waiting until you’re ready to list often limits your options.

💡 Your Tax Return Is More Than a Filing — It’s a Story

When a buyer reviews your financials, they’re asking:

• Is this practice stable?

• Is revenue trending up, down, or flat?

• Are expenses controlled?

• Is there upside opportunity?

• Does this support debt service?

Your tax return tells that story.

The cleaner and more consistent the story, the stronger your negotiating position.

Thinking About Selling in the Next Few Years?

If a transition is even on your radar — whether it’s 12 months away or 3 years out — now is the time to understand how your financials impact your value.

If you’re considering selling your dental practice in the next few years, let’s schedule a confidential review to see how your financials position you in today’s market.

The best exits are intentional.

Spring has a way of making us look at things differently.

You clean out closets. You organize your garage. You start thinking about projects you’ve been putting off.

For many practice owners, spring is also when the thought quietly creeps in:

“Maybe this is the year I start planning my exit.”

Even if you’re 2–3 years away from selling, what you do now can significantly impact the value and marketability of your practice. If you’re even considering a transition in the next few years, this is the perfect time to take a hard look at your practice.

Here are seven areas worth evaluating right now.

1️⃣ Your Financial Statements (Clean and Clear Wins)

Buyers and banks rely heavily on your tax returns and profit-and-loss statements.

Ask yourself:

• Are expenses categorized properly?

• Are personal expenses clearly identifiable?

• Are there unusual one-time expenses that need explanation?

• Is your CPA producing clean, consistent reports?

The cleaner your financials, the smoother your sale process will be. Sloppy or unclear books create hesitation, delay underwriting, and can reduce perceived value.

2️⃣ Insurance Participation and PPO Mix

When was the last time you evaluated your participation agreements?

Buyers today are scrutinizing:

• PPO dependency

• Fee schedules

• Reimbursement trends

• Patient retention tied to specific plans

If you are heavily PPO-dependent, understanding your fee structure now gives you time to adjust strategically before going to market.

3️⃣ Hygiene Production and Recall Effectiveness

A strong hygiene department is one of the most attractive features of a general practice.

Review:

• Hygiene as a percentage of total production

• Pre-appointment rates

• Active vs inactive patients

• Recall system effectiveness

Buyers view hygiene as stability. A healthy hygiene program often translates directly into stronger offers.

4️⃣ Accounts Receivable (AR)

A bloated or aging AR report raises red flags.

Look at:

• AR over 90 days

• Collection percentage

• Write-offs and adjustments

• Credit balances

Cleaning up AR before listing your practice signals strong operational discipline and avoids unnecessary negotiation issues later.

5️⃣ Facility Condition and Equipment

You don’t need a full renovation before selling — but deferred maintenance stands out quickly.

Evaluate:

• Flooring, paint, lighting

• Upholstery condition

• Sterilization flow

• Major equipment age (pan, compressor, vac, chairs)

Small cosmetic updates can dramatically improve buyer perception. First impressions matter.

6️⃣ Technology and Systems

Are you running current practice management software?

Digital radiography?

Intraoral scanning?

You don’t need every new gadget, but outdated systems can make a practice feel harder to step into.

More important than the technology itself is whether your systems are organized and transferable.

7️⃣ Team Stability

One of the first questions buyers ask:

“Is the staff staying?”

If you have:

• Long-tenured employees

• Clear roles and responsibilities

• Stable compensation structures

• Positive team culture

You have a major selling advantage.

If there are unresolved staffing issues, now is the time to address them — not when you’re under contract.

Why Planning 2–3 Years Ahead Matters

The strongest practice transitions don’t happen by accident.

They happen when an owner:

• Plans ahead

• Understands their numbers

• Makes small strategic adjustments

• Prepares emotionally and operationally

Spring is a great checkpoint. Even if you’re not ready to sell tomorrow, being proactive now gives you control over your timeline and your value.

Thinking About Selling in the Next Few Years?

If you’re considering a transition in the next 1–3 years — even casually — a confidential valuation review can give you clarity.

You don’t need to commit to selling.

You just need to understand where you stand.

And sometimes, that clarity alone changes everything.

If you’re considering selling your dental practice in the next few years, let’s schedule a confidential review so you can understand your options and plan strategically.