How long does dental practice due diligence take?

Typically a few weeks, running in parallel with lender underwriting. A well-documented practice with a complete file moves faster than a sparse one.

What's the most commonly missed due diligence item?

Lease assignability. Buyers often confirm financials carefully but assume the lease will simply transfer — verify it directly with the landlord early, not late.

Is a dental practice purchase usually an asset sale or a stock sale?

Almost always an asset sale. This affects what liabilities transfer to you and how the purchase price is allocated for tax purposes — your CPA should weigh in before you sign the LOI.

Do I need to audit every patient chart?

No — a sample review is standard practice to confirm documentation and treatment-planning quality, not a full audit of every chart.

Dental Practice Due Diligence Checklist (2026 Buyer's Guide)

1. Financial records

2-3 years of tax returns and P&Ls, plus year-to-date financials if you're past March. Reconcile these against the collections figures shown in the listing and the SDE / add-back schedule the broker provided.

Look at the monthly trend, not just the annual total — a practice growing steadily tells a different story than one that's flat or declining even if the trailing-12-months number looks similar.

2. Patient base and charts

Active patient count, new-patient flow over the last 12-24 months, recall/hygiene compliance rate, and payor mix (fee-for-service vs. PPO vs. HMO/Medicaid). A practice heavily dependent on a shrinking patient pipeline carries more risk than the raw collections number shows.

Chart audits (a sample review, not every chart) help confirm treatment planning and documentation quality, which matters both clinically and for any insurance/compliance exposure you'd be inheriting.

3. The lease

Confirm the lease is assignable to you (or that the landlord will sign a new one), the remaining term, renewal options, and rent escalations. An unassignable or soon-expiring lease is one of the more common deal-killers found late — get this verified early in due diligence, not at the end.

4. Equipment and facility

Inventory of major equipment (chairs, imaging, sterilization) with age and condition; an equipment list with a service history is a good sign. Budget for near-term replacement of anything visibly at end-of-life rather than assuming it's included 'as-is' without consequence.

5. Staff and transition

Who's staying, who isn't, current compensation, and whether the seller will stay on for a transition period (common, and often reassures existing patients). A practice highly dependent on the selling doctor's personal production needs a clear transition or associate plan.

6. Compliance and legal

OSHA/HIPAA compliance status, any open board complaints or litigation, outstanding vendor or equipment financing that transfers with the practice, and confirmation of what's included vs. excluded in the asset sale (almost all dental practice sales are structured as asset sales, not stock sales).

7. Financing coordination

Run due diligence in parallel with your lender's underwriting, not after it — most of what a lender asks for overlaps with this checklist, so sharing documents once with both sides speeds up closing.