1. Get pre-qualified for financing first
Before you seriously evaluate practices, talk to a lender who specializes in dental acquisitions. Specialty dental lenders and SBA 7(a) lenders routinely finance 90–100% of a practice's purchase price, often with 10-year terms, because dental practices have very low default rates.
A pre-qualification tells you your realistic budget and signals to brokers and sellers that you are a serious buyer, which matters when good practices receive multiple offers.
2. Define what you want
Decide on location, specialty (general vs. ortho, perio, endo, oral surgery, pediatric), minimum collections, and whether you want the real estate. A practice doing $700K–$1M in collections with healthy hygiene and a reasonable lease is a common sweet spot for a first acquisition.
Browse listings by state and specialty to understand pricing in your target market before you commit.
3. Evaluate the listing
Most listings are anonymized to protect the seller. You will see collections, asking price, operatory count, and high-level details. After signing a confidentiality agreement (NDA), the broker releases the practice identity, financial statements, and tour access.
Focus on collections trend (is it growing or declining?), payor mix (fee-for-service vs. PPO vs. HMO), new-patient flow, and how dependent production is on the selling doctor.
4. Understand the valuation
Dental practices are typically priced between roughly 60% and 85% of annual collections, but the more accurate driver is cash flow — specifically SDE (Seller's Discretionary Earnings): net income plus the owner's salary, perks, and one-time add-backs.
A practice is 'affordable' when its cash flow comfortably covers loan payments, an associate-level salary for you, and a cushion. Ask the broker for an SDE / add-back schedule.
5. Submit a Letter of Intent (LOI)
An LOI is a non-binding offer that sets the price, structure (asset vs. stock sale — almost always asset), what's included, transition terms, and timeline. It opens formal negotiations without yet committing either side to close.
6. Due diligence
Once your LOI is accepted, you verify everything: tax returns vs. reported collections, accounts receivable aging, the equipment list, the lease and its assignment clause, staff compensation, and any liens. Your CPA and a dental-specific attorney are essential here.
7. Financing, lease assignment, and close
Your lender finalizes underwriting using the practice financials and your credentials. In parallel, the landlord must consent to assign or issue a new lease — this is frequently the slowest step, so start it early.
At closing, funds are wired, documents are signed, and you take ownership. A short transition period with the selling doctor (a few weeks to a few months) helps retain patients and staff.