Buy a Dental Practice the Right Way — Due Diligence, Financing, and Tax Strategy
Thinking about how to Buy a Practice? Our dental practice consulting services make the process easier and less stressful. We guide you through each step, from finding the right practice to handling the financial details, so you can make a smart investment with confidence.
If you’re looking to buy a dental practice and...
You’re unsure if the asking price is fair
You’re wondering if there are red flags in the tax returns & financials
You don’t know if the staff & overhead costs are reasonable
You’re curious how to structure the purchase for tax benefits
You don’t know the right questions to ask your broker or attorney
We help dentists plan for, purchase, and run a profitable dental practice
From the first conversation with a broker to the day you take over the chair, we are with you at every stage — reviewing financials, modelling projections, advising on purchase structure, and making sure you are not paying more than the practice is worth or missing tax advantages that are much easier to catch before closing than after.
Due Diligence & Review
We review the seller's last three years of tax returns, profit and loss statements, overhead ratios, production by provider, and patient retention metrics. We identify discrepancies between reported income and actual cash flow, flag unusual expense patterns, and give you a clear picture of what the practice actually earns — not just what the asking price implies.
Lending & Financing Support
We work daily with dental-specific lenders and know what each institution looks for in a borrower. We help you prepare the financial documentation required for approval, model your debt service coverage at different loan amounts, and position your application to give you the best chance at favourable terms. Most dental practice acquisitions are fully financed — getting the right loan structure matters from day one.
Structure Your Purchase to Maximize Tax Benefits
How a practice acquisition is structured — asset sale versus stock sale, allocation of the purchase price across equipment, goodwill, non-compete agreements, and supplies — has a significant impact on your first-year and long-term tax liability. We model both scenarios, explain the trade-offs, and recommend the structure that minimises your total tax cost over the life of the investment.
Project & Forecast 5-10 Years Financial Plans
Every year, we review hundreds of dental practices across specialties, markets, and price ranges. That volume of exposure means we recognise the difference between a fairly priced opportunity and one that is priced for the seller's benefit — and we tell you which one you are looking at.
We’ve been helping dentists buy practices for more than 10 years
We review hundreds of dental practices each year, giving us a broad perspective on the market for those looking to Buy a Practice. You can also use our dental Valuation Calculator to get a better understanding of a practice’s worth.
We See Hundreds of Dental Practices Each Year
Every year, we review hundreds of dental practices across specialties, markets, and price ranges. That volume of exposure means we recognise the difference between a fairly priced opportunity and one that is priced for the seller's benefit — and we tell you which one you are looking at.
We Work Daily With Dental Attorneys, Brokers, & Bankers
We work daily with a network of dental attorneys, brokers, and bankers to provide comprehensive support. This teamwork ensures that you have all the resources you need to make your practice a success.
We Successfully Helped Dentists Grow From Start Up to Multi-Practice
Many of our clients bought their first practice with our help and are now managing multiple locations. We stay with clients through every acquisition — each one builds on the financial foundation and experience of the last, and our model of the original practice informs every subsequent deal.
Start with a Dental Practice Purchase Consult
Buying a dental practice is one of the biggest investments you’ll make in your life. We’re here to help you navigate the process smoothly and make confident decisions every step of the way, ensuring your Buy a Practice journey is successful.
- Personal Consultation: We'll schedule a call to discuss your practice purchase opportunity.
- Pros and Cons Analysis: We'll review the advantages and disadvantages of the practice.
- Simple Guidance: Get clear advice to help you make smart choices.
Dont’s just take our word for it.
Hear directly from our hundreds of happy clients and see how Virjee Consulting has made a difference in their practices.
“Before working with Virjee Consulting, what were you looking for from a CPA, and what problems were you trying to solve?”
Dr. Minesh Patel, Floss Dental. Virjee client for 10+ years.
Trustindex verifies that the original source of the review is Google. 
Trustindex verifies that the original source of the review is Google. 
Trustindex verifies that the original source of the review is Google. 
Trustindex verifies that the original source of the review is Google. 
Trustindex verifies that the original source of the review is Google. 
Trustindex verifies that the original source of the review is Google. 
Trustindex verifies that the original source of the review is Google. 
Trustindex verifies that the original source of the review is Google. Check out our latest YouTube videos!
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A few of our practice purchase FAQs
What doesn't a dental practice listing tell you?
The listing tells you the asking price and the collections, and it leaves out the total you’ll spend to make the practice work. That total is the number that decides whether you bought a business.
Buyers get emotional about an office and forget the extras: replacing old equipment, digitizing paper charts, adding a CBCT, updating the leasehold improvements and the signage. Add all of it to the purchase price, then ask whether the income supports it. If it doesn’t, you’ve bought golden handcuffs, a practice you can’t make profitable and can’t easily sell.
Higher production doesn’t always mean higher profitability either. A heavy lease or bloated payroll can eat the profit on a practice with great collections, and the seller will still want to be paid on those collections.
What's a reasonable price for a dental practice?
A reasonable price is one the practice can still support after you replace the owner’s pay with what you’d pay an associate to do the same dentistry. Brokers usually price off doctor’s discretionary income, which quietly assumes you’ll be the one in the chair producing it.
Our test is simple. If you bought the practice, put an associate in at 32% to 33% of production and went to Hawaii for four years, would there be money in the bank when you got back? If there would be, you bought a business, and if there wouldn’t, you bought a job with a loan attached.
Here’s how the math works. Say the P&L shows $200,000 of owner discretionary profit and the asking price is $800,000.
The owner pays himself $50,000 less than you’d have to pay a dentist for that production, so the real profit is $150,000. Priced on that real profit, the practice is worth closer to $600,000, before any credit for newer equipment or a fresh buildout.
Our dental practice valuation calculator is a good first pass on any practice you’re looking at.
What should you look for in due diligence on a dental practice?
Look for anything that makes the P&L look better than the practice actually runs. We’ve reviewed hundreds of practice financials with buyers, and the problems are rarely on the summary page.
Let’s look at an example. We had a doctor buying a practice who got to sit with the seller and look at the schedule, and it was booked out for weeks.
He was thrilled, so we opened the P&L and asked where the money was, because the collections weren’t there. A full schedule only shows you what got produced, and you’re paying for what got collected.
Here are the other things we see over and over:
- Owner costs that are too low. A practice where the dentist’s spouse runs the front office for $10 an hour looks great until you hire an office manager at real market rates.
- Costs parked at another office. When a multi-office owner sells one location to focus on the others, check whether lab fees, supplies or shared staff are being paid through the office that isn’t for sale.
- New patients with no growth. If a practice brings in around 40 new patients a month on $5,000 to $6,000 a month of marketing and revenue is still flat, patients are leaving out the back door as fast as they come in the front.
- Messy books. Sloppy bookkeeping hides problems, and we’ve seen cheap bookkeeping cost a seller about $200,000 of practice value.
- The lease. Rent is the one piece of overhead you can’t adjust after you buy, so check how much term is left, the renewal options and whether the landlord has to approve the assignment.
Should you buy the assets or the stock of a dental practice?
Buy the assets. Almost every dental deal we see is an asset purchase, and that’s usually what you want, because a stock sale gives you no fresh write-offs and hands you the seller’s liabilities along with the chairs.
Think of an asset purchase like a trip to IKEA. You show up with your own empty box, which is your new LLC, and fill it with the pieces from the seller’s box. The seller closes the old company, which is why your new practice gets its own EIN.
The receipt for that trip is the bill of sale, and it splits the price between equipment and goodwill. You and the seller each report that split to the IRS on Form 8594, so it needs to be settled in the purchase agreement. In about 40% of the deals we see, the buyer had no idea the split was even being negotiated.
Don’t overcorrect, though. Calling a busy, established practice 95% equipment and 5% goodwill is the kind of split the IRS can reverse, with penalties and interest on top.
How do you finance a dental practice purchase?
Most buyers use a bank practice loan, and the bank approves it based on whether the practice’s cash flow can cover the payment. That approval is a good first check, and it says nothing about whether the price is right.
A bank will approve a practice with a heavy lease as long as today’s collections cover the note. You’re the one who has to sell it later, and a high lease makes that much harder.
Smaller, older practices that a bank won’t finance can still work. One structure we walk buyers through pairs an equipment loan from the dealer with a working capital loan, so the new equipment creates write-offs in year one that can help pay for marketing.
What does the tax side of buying a dental practice look like?
The tax side comes down to how fast you get to deduct what you paid. Equipment and other things you can touch can often be written off quickly through bonus depreciation, while goodwill is deducted evenly over 15 years.
Here’s what that means in dollars. Buy a $300,000 practice where $150,000 is goodwill, and that goodwill gives you a $10,000 deduction each year.
Plenty of buyers expect to write off the whole $300,000 in year one, so that first tax return comes as a shock.
Entity timing matters too. If you write everything off in year one and switch to an S-corp in year two while your loans are bigger than your assets, the IRS can treat that gap as a taxable gain. We make the S-corp decision with you before the end of your first year to avoid that.
How can Virjee Consulting help when you buy a practice?
We’re a CPA firm that only works with dentists, so we’ve seen every one of these patterns on real deals. Buyers often bring us in before the LOI for a purchase review, then use our dentist tax planning for the allocation and entity setup.
After closing, our dental CFO services track how the practice performs against the plan, and our dental bookkeeping starts the new practice with clean books.
You can book a call with the Virjee Consulting team to talk through your situation.