How To Buy A Dental Practice
An overview of the process to go from dental associate (or dental student) to owner of a dental practice.
The Million-Dollar Opportunity
As a dentist, you don’t need a groundbreaking idea to earn millions. All you need to do is transition from being an associate to becoming an owner, where you keep the full value of your work.
Let's say you're making $200,000 as an associate. As a practice owner, you could easily double that income, all while building equity in a business you can later sell. With so many Baby Boomer dentists retiring, now is the perfect time to catch this wave of opportunity. In fact, 91% of people with a net worth over $5 million own their own business, and for dentists, the path to ownership is clearer than in most industries.
Why Buying a Practice is Less Risky Than Starting From Scratch
Owning a dental practice carries exceptionally low risk compared to starting a business from scratch. New businesses often struggle because they have to build a customer base from zero and face high upfront costs. But when you buy an established dental practice, you step into a business with a proven track record, loyal patients, and immediate cash flow.
The longer a business has existed, the more stable it is. By purchasing an existing practice, you're not starting from nothing—you’re taking over something that’s already successful.
The 4 Biggest Reasons Dentists Don’t Buy Practices
Fear: Many dentists believe they aren't ready to own a practice. But here's the truth: if you've made it through dental school, passed your exams, and treat patients daily, you’re ready. The hardest part—becoming a dentist—is already behind you. Owning a practice is a skill you develop over time, and the only way to learn it is by becoming an owner.
Work-Life Balance Concerns: Some dentists think that owning a practice means sacrificing their personal life. But as a practice owner, you get to control your schedule. Whether you want to work five days a week or two and a half, the choice is yours.
Lack of Knowledge: Many dentists simply don’t know how to buy a practice. Most dentists only buy a practice once or twice in their lifetime, so it’s normal to feel uncertain. The solution is simple: get guidance from someone who’s been through the process before. This is what I help dentists do every day.
Financing: Some dentists think buying a practice is too expensive. The reality is, banks are eager to loan money for dental practices because they are low-risk, high-return investments. Many banks will even finance 100% of the purchase price and give you working capital for initial expenses.
How to Get Financing for Your Practice
Unlike other small businesses, dental practices are incredibly attractive to banks. Dentists have a strong track record of success, and dental practices consistently generate reliable cash flow. This makes banks willing to offer favorable financing terms, often providing 100% of the purchase price and additional working capital to help you start smoothly.
For example, one dentist I worked with found a practice generating $900,000 annually and bought it for $700,000. He received a loan for $800,000, which included $100,000 in working capital. Even if the practice's production didn’t increase, he was set to earn $315,000 per year after paying off the loan. And with a small 20% increase in production, his income would jump to $369,000 annually—more than double his previous associate salary.
The Step-by-Step Process to Buy a Practice
Find a Practice for Sale: The easiest way to find a practice is through a practice broker, similar to a realtor for dental practices. However, remember that brokers work for the seller, not for you. To protect your interests, you'll need a lawyer and accountant experienced in dental practice transitions.
Submit a Letter of Intent (LOI): This non-binding document outlines your interest, terms, and pricing for purchasing the practice. It sets the stage for negotiation.
Conduct Due Diligence: Before finalizing the sale, you’ll review the practice’s financials, patient records, and other details to ensure it’s a sound investment.
Secure Financing: Banks love financing dental practices, so finding a loan should be relatively easy. You can even negotiate better terms by getting multiple offers from different banks.
Sign an Asset Purchase Agreement (APA): This legal document finalizes the sale and officially transfers ownership of the practice to you.
Take Control of Your Career
Now is the time to take control of your career. Over the next five to 10 years, thousands of dental practices will be available as Baby Boomers retire. The sooner you get started, the sooner you’ll begin building equity and reaping the rewards of practice ownership.
Don’t miss this once-in-a-lifetime opportunity to own a thriving dental practice, grow your income, and secure your financial future.
