How to Buy a Dental Practice: The Complete 2026 Guide

You spent eight years learning dentistry. Nobody spent eight minutes teaching you how to buy a business.

That's the reality for most dentists considering practice ownership. You can perform a flawless crown prep, but you’re starting from scratch when it comes to evaluating a P&L, negotiating a purchase agreement, or figuring out whether a practice's overhead is healthy.

Here's the good news: buying a dental practice isn't as complicated as it may feel. 

If you have a few years of experience, have saved some money (around 5 - 10% of the target purchase price for your practice), and have a 700+ credit score, then you are a great candidate for making that transition from associate to owner.

Banks love lending on dental acquisitions. Most lenders will finance 100% of the purchase, and the practice pays for itself from day one. 

The great thing about purchasing an existing practice is that you're not taking a leap of faith. Instead, you're buying a proven income stream.

At Integrity Practice Sales, we've helped hundreds of dentists navigate this process. The ones who succeed aren't necessarily the most experienced clinicians or the ones with the deepest pockets. They're the ones who understood the process before they started.

This guide walks you through every step: from deciding if you're ready, to finding the right practice, to closing the deal and thriving in your first 90 days as an owner.

Why Buying a Practice Beats Starting from Scratch

There was a time when you could hang a shingle, join a community, and build a practice from the ground up without much competition. My grandfather did exactly that in the 1960s. He started two practices, and the other local dentists were genuinely happy to see him join the community.

That world is gone.

In 2001, there were 66 dentists per 100,000 people in the U.S. Today, that number is closer to 77. 

And in competitive markets like California, scratch starts can be especially tough. 

You're spending years building a patient base while burning through cash reserves, and there's no guarantee the patients will come.

Buying an existing practice flips that equation:

• Day-one cash flow. The practice is already collecting revenue. Patients are already scheduled. The phone is already ringing.
• Built-in infrastructure. Staff, systems, referral relationships, practice management software, equipment — all in place.
• Banks prefer it. Lenders view practice acquisitions as far less risky than startups, which is why they'll finance 100% of an acquisition but often require significant capital for a startup.
• Equity from day one. You're building on an existing asset rather than creating one from nothing.

Does that mean a startup never makes sense? No. If you're in a rural area with genuine unmet demand, or you have a specialty that doesn't exist locally, a startup can work well. But for the vast majority of dentists, buying an existing practice is the faster, safer, and more financially sound path to ownership.

Are You Ready to Buy? The Self-Assessment Most Dentists Skip

Before you start browsing listings, take an honest look at where you are:

Clinical Readiness 

Most lending institutions require at least two years of clinical experience before they'll finance a practice acquisition. That's not arbitrary — it takes time to develop the speed, confidence, and judgment to run your own schedule. If you're a recent graduate, working as an associate is a smart move. Think of it like renting before you buy a house. You're learning the business without committing to a location or a practice style.

Financial Readiness

You need to know three numbers: your monthly living expenses, your credit score, and your liquid cash reserves.

Unlike purchasing a home (something that may be better after purchasing a practice), dental practices pay for themselves. You don’t need a large down payment and then incur a mortgage payment that you must pay from your salary. The income from the practice covers the loan AND your living expenses. 

Banks generally look for the monthly cash flow to cover at least 120-130% of your total obligations. If you need $8,000 per month for living expenses, savings, and loan payments, the practice needs to generate at least $10,000 (after loan payments).

That said, banks do want to see a few things: a credit score in good shape (if yours needs work, start now — pay bills on time, get a credit card and pay it off every month), and at least $35,000-70,000 in liquid reserves as an emergency fund.

Personal Readiness 

This is the one people gloss over. Practice ownership is a long-term commitment. Ask yourself:

• Are you ready to commit to one location for the long term?
• Are you tired of having someone else control your schedule and your treatment plans?
• Do you want the earning potential that comes with ownership? (For reference, the average annual net income for owner GPs significantly exceeds that of associate GPs.)

There's no wrong answer. If you're not ready, that's fine — keep associating, keep building skills, and revisit the question in a year. 

But if the answer is yes, let's talk about what you're actually buying.

What You're Actually Buying (It's Not the Equipment)

This is important, and it surprises many first-time buyers.

When you purchase a dental practice, the equipment and physical buildout typically account for only 10-30% of the purchase price. The rest — usually 70-90% — is intangible: the practice's reputation in the community, relationships with patients, goodwill, and the restrictive covenant that prevents the seller from opening up across the street.

What you're really buying is a revenue stream. The patients who come back twice a year for hygiene. The treatment plans they accept. The referrals they send. The systems that keep it all running. That's where the value lives.

This is also why trusting your gut matters. If you visit a practice and something feels off — the team seems disengaged, the facility feels neglected, the seller is evasive about the numbers — pay attention to that. 

If you don't believe in the transaction, the value of that practice for you is very low, regardless of what the appraisal says.

One more thing to understand upfront: not all practices are the same business model, even if they're all "general dentistry." A PPO-heavy practice doing $900 crowns is a fundamentally different business from a fee-for-service practice doing $1,700 crowns. Both can be profitable and rewarding. But you need to understand which model you're buying and whether it fits your clinical philosophy and financial goals. 

As we like to say, problems arise when you try to turn Walmart into Nordstrom or Nordstrom into Walmart. Both are very successful, but they use different models.

How Dental Practices Are Valued — The Numbers That Matter

Practice valuation is part science, part art. Let me walk you through the common methods so you understand what you're looking at when a number shows up on a prospectus.

Method 1: Percentage of Collections

This is the simplest approach. Just take last year's collections and multiply by a percentage, typically 65-85% depending on market conditions. A practice that collected $1.2 million would be valued at roughly $780,000 to $1,020,000.

It's quick, it’s easy, but without context it can be deeply misleading.

Consider two practices, both collecting $800,000. 

Practice A has overhead at 50% — the owner takes home $400,000. 

Practice B has overhead at 80% — the owner takes home $160,000. 

The percentage-of-collection method would value them similarly, but they're not even close to the same investment. The practice where you can expect to take home $400k/year is worth considerably more.

Method 2: Multiple of SDE (Seller's Discretionary Earnings) 

This is the one you'll encounter most often in private sales. Seller’s Discretionary Earnings is a number that we typically think of as take-home income. It can be calculated by adding Net Income + Owner's Compensation + Add-backs (personal expenses run through the practice, such as car, travel, family insurance, etc.). 

Private buyers typically pay 1.75x to 2.5x SDE. This gives the most accurate picture of what the practice actually earns for its owner.

Method 3: Multiple of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)

The multiple of EBITDA approach is generally applied when outside investors are involved. This means DSO sales, selling to Private Equity, and large practice sales where the owner-doctor is more of a manager (i.e. investor) than the primary provider.

A practical way to calculate EBITDA is to take the SDE number above (Net Income + All Doctor Compensation, including personal expenses run through the practice) and then subtract what it would cost to pay the doctor as an associate.

For example, let’s say the practice is collecting $3.5 million. At the bottom of the P&L, the Net Income line is $400k. But the doctor is paying herself $500k in W2 wages, she’s hired her family members for a total of $75k (for jobs that the buyer would not need to replace), and there are an additional $100k in add-backs. She is also paying an additional $500k to associates.

When I add up all of that, the ‘profit’ before paying any doctors is $1.575M. Now, in order to reach the EBITDA number, we need to add back replacement salaries for all the dentistry. If the practice has $1M in hygiene revenue, then we need to pay for $2.5M of dentistry. At 30%, that is $750k. So we take $1.575M and subtract the $750k to get $825k in EBITDA.

EBITDA multiples range from 3x to over 10x for large, multi-location platforms. If our example practice received a multiple of 6x, then the practice would be worth $4.95M. However, at that level, there would likely be other factors at play in the deal, including how much cash was included at close, what type of equity the seller received in the new entity, requirements to stay on with the buyer, etc.

The Bottom Line

The bottom line: cash flow is king. It only makes sense to buy a dental practice if you can make enough money to pay overhead, pay the bank, and still take home a reasonable income for yourself and your family. 

Don't get too focused on the formula. What matters is what YOUR cash flow will be after you pay your expenses, including the bank loan.

Trust your advisors. Trust the bank — they won't risk their money on a bad deal. 

And remember: no deal is 100% perfect for the buyer or the seller, but the overall transition must be good for both parties, or it shouldn't happen.

Finding Practices for Sale — Including the Ones Nobody Knows About

Once you're ready to look, cast a wide net.

Published listings. Check dental trade publications, CDA and local dental society websites, and broker sites like ours at integritypracticesales.com.

There are practices listed in journals, magazines, and online marketplaces.

The Hidden Market 

Here's something most buyers don't know: many of the best practices sell before they're ever publicly marketed. This happens when a broker already has a relationship with a qualified buyer and matches them with a new listing before it hits the market.

This is why relationships matter. If you contact an IPS agent in the area you're focusing on, you have someone answering your questions AND someone keeping you in mind when a great practice comes along. We've sold many practices to buyers on our inside list who got first look before we ever started advertising.

Register as a Buyer Here

Direct Outreach 

Some buyers identify retiring dentists through their local dental society or study club and approach them directly. This can work, but be careful — without a broker involved, you may overpay, miss red flags during due diligence, or end up in a deal structure that doesn't protect you.

Just last month I spoke with a doctor who wanted to sell her practice, but, after reviewing the financials, I realized that she had seriously overpaid for the practice. The seller had carried the loan, so there was no bank involved. And now her options for selling without a loss are severely limited.

What to Look For in a Broker

Not all brokers are created equal. Ask these questions:

1. Do they specialize in dental practice sales?
2. How long have they been working in your market?
3. What do they expect you to do, and what will they do for you?
4. How do they market practices to the widest buyer pool?
5. What is their reputation for honest and ethical dealing?
6. Do lending institutions recommend and work closely with them?

Evaluating a Practice — Before You Make an Offer

You've found a listing that looks promising. Before you submit a Letter of Intent, here's how to evaluate it.

Sign the NDA 

Most reputable brokers require a Non-Disclosure Agreement before sharing detailed practice information. This isn't just paperwork — it protects the seller, the buyer, and the practice's value. Rumors have a way of spinning out of control. If patients or staff find out the practice is for sale before the transition is managed properly, it can erode the very goodwill you're trying to buy.

Read the Prospectus Carefully 

The prospectus gives you the basics: collections, overhead, patient count, payer mix, equipment list, photos. But remember — discovering the facts is only half the challenge. The other half is interpreting them.

Think of it like touring houses. You walk into a place with peeling paint and overgrown landscaping, but it's in a great neighborhood. Do you see a dump, or do you see a fixer-upper with tremendous potential at a value price?

There's no right answer. Some buyers want the move-in-ready practice that cash flows perfectly with every system in place. Others are looking for the underperforming practice they can turn around. Most want somewhere in between — strong fundamentals, but with clear opportunities to grow.

Check the online presence. Look at the practice's Google reviews, Yelp profile, website, and social media. If there's no online presence at all, don't panic — that's actually an opportunity. A practice with no marketing savvy is one you can grow with some simple digital strategies.

Visit the practice. This is usually done after hours for confidentiality. When you're walking through, keep perspective. Paint, carpet, and artwork are cheap to change. Parking and layout are not. Focus on the bones, not the cosmetics.

And if you meet the seller, be respectful. If you're already planning to gut the operatories and change everything, keep it to yourself for now. The seller has been working this practice for years and has close relationships with patients and the team. Transitions go much better when there's mutual respect on all sides.

One final tip: your ideal practice might not look exactly like you imagine right now. I've seen many doctors discover that a practice that doesn't fit their ideal profile on paper ends up being even better than they hoped for. Keep your eyes and your options open.

Making an Offer — The Letter of Intent

If your evaluation checks out and your advisors like the practice, the next step is a Letter of Intent.

The LOI is typically non-binding — it announces your intention to purchase and sets the basic terms. Think of it as the framework for the deal before attorneys get involved with the full Purchase and Sale Agreement.

What's in the LOI:

• Who is buying and selling
• Purchase price — your offer
• Closing date — typically 60 days after signing the LOI
• Good faith deposit — usually 3-5%, refundable, held in escrow
• Contingencies with dates (typically 30-45 days to remove):
  
  • Buyer obtains financing
  • Buyer approves lease or real estate purchase terms
  • Buyer is satisfied with due diligence (books, records, charts, equipment, schedule)
• Accounts receivable — whether they're included in the sale
• Covenant not to compete — typically 15 miles for 5 years, but this varies considerably in urban vs. rural settings

The listing agent will help you put together a reasonable LOI. Once you submit it, the seller typically has three days to sign or counter on specific deal points.

Once signed by both parties, the official due diligence begins. This is where things get real.

Building Your Transition Team — Don't Use Your Family Lawyer

The most important piece of advice I can give across the board: hire experts who specialize in working with dentists.

Every professional who specializes in dental practice transitions can tell you horror stories about dentists who had their family attorney, their cousin's CPA, or their college roommate's financial advisor get involved in a practice sale. These are well-meaning people, but dental practice sales have nuances that generalists simply miss.

Bankers 

Speak to at least three lenders who specialize in dental practice finance. This is critical because the first two may not approve the loan. We can connect you with our preferred lenders and assist you with this process. You'll need: a purchaser profile, credit authorization, personal financial statement, three years of personal tax returns, current income documentation, and copies of your dental license and DEA license.

Dental CPA 

A CPA who knows dentistry understands the industry benchmarks that matter: staff costs should run 22-30% of collections. Rent should be 5-6% of collections (often more in high-cost-of-living areas). Supplies at 5-6%. Lab at 8-10%. Total overhead in the 55-65% range. 

A generalist CPA won't know these numbers and might flag normal dental expenses as problems, or miss real issues hiding in plain sight.

Your CPA will also help with purchase price allocation — how the sale price is divided between tangible assets, goodwill, covenant not to compete, and other categories. This allocation has significant tax implications for both buyer and seller, and it's a key negotiation in the deal.

Dental Attorney

Your attorney handles the lease review, Purchase and Sale Agreement, restrictive covenant, seller note (if applicable), employment agreements, and articles of incorporation. This is not a job for your friend who practices law (unless they happen to be a healthcare attorney). You may know a great attorney, but it's always better to hire a specialist.

Insurance Agent 

You'll need professional liability (malpractice), life, disability, casualty and fire, office premises liability, and workers' compensation. Get quotes before closing so you're covered from day one.

Due Diligence — Verify Everything Before You Close

This is where you confirm that the practice actually operates as it's been represented. Due diligence is one of the most important phases of the entire acquisition, and it's worth doing thoroughly.

Financial Review

You've already confirmed from the prospectus that the practice can support you. Now verify the numbers. Review tax returns, profit and loss statements, and bank statements. A healthy accounts receivable balance is roughly one month's collections. If AR is significantly higher — say, three months' worth of collections sitting uncollected — that's a red flag worth investigating. It could indicate poor collection systems, insurance follow-up problems, or financial arrangements that aren't working.

Review the fee schedule and compare it to typical fees in your area. When was the last fee increase? You generally don't want to raise fees immediately after buying — it's much better if the seller has already raised them in the past year.

Look at the insurance plans accepted and understand what percentage of the practice is fee-for-service, PPO, HMO, or Denti-Cal. Each model works differently, and you need to understand how insurance drives the revenue in this specific practice.

Patient Charts 

Review approximately 10% of active charts, selected randomly. For each chart, note: last x-rays, last prophy, last perio charting, written treatment plan, and financial arrangements.

Here's something that might surprise you: sloppy charts are not necessarily a deal-killer. In my experience, getting compliant on x-rays and perio charting can be a gold mine for a new owner. A practice that's been doing patchwork repairs probably has over a million dollars of diagnosed but uncompleted treatment sitting in those charts. That's not a problem — that's an opportunity.

Scheduling 

This is critical, and there's a specific trick to it: look backward at the schedule, not just forward. If you only look ahead, the schedule will probably look full. Looking backward gives you the real picture. Does the practice have a cancellation problem? Are there consistent no-shows?

For hygiene specifically, here's the formula we use: count the number of hygiene days in the last 30 days, then count the total hygiene openings in that same period. Divide openings by days. A well-run practice typically has about 0.8 openings per hygiene day. If you're seeing more than one opening per day, it usually indicates a weak recall system or poor cancellation management. But again — that's opportunity, not necessarily a reason to walk away.

Staff Evaluation 

You probably won't meet the team before closing (most sales are confidential until the deal is done). Talk to the seller about each team member's personality, strengths, weaknesses, and attitude. Discuss the seller's management style so you understand the workplace culture you're inheriting.

New Patients

Review monthly new patient counts for the past 24 months, along with sources if available. And have a contingency plan ready for a possible 10% patient loss after the transition. While most practices I've seen actually grow after a transition, you need to plan for the downside.

The Lease 

I cannot stress this enough: lease negotiations can sink a deal. I've seen it happen, and it's not pretty. If you're not buying the real estate, review the existing lease carefully and early. Landlords often see a practice sale as an opportunity to dramatically increase the rent. Lenders typically require that the lease terms run at least as long as the loan, so short leases or unfavorable renewal terms can kill your financing.

Start lease discussions as early as possible. Get your attorney involved immediately. Don't let this become a last-minute crisis.

Closing the Deal — From PSA to Keys in Hand

As due diligence wraps up, your attorney and the seller's attorney will finalize the Purchase and Sale Agreement.

The PSA includes:

• Asset allocation (tangible assets, goodwill, covenant not to compete, etc. — goodwill typically accounts for about 80% of the allocation)
• Payment terms
• Closing date
• Restrictive covenant details (typically 15 miles for 5 years)
• Indemnification

The Work-Back Question 

Should the selling doctor stay on after the sale to "introduce you to patients"?

In my experience, short-term work-backs just for the sake of introducing the new doctor typically do more harm than good. Here's why:

Team Loyalty 

It's difficult for the team to transfer their loyalty to you while the seller is still around. Even if everyone knows the practice has sold, the de facto leadership stays with the seller. Staff will double-check your instructions with Dr. Seller, and it only takes a slight eye roll or a muttered "Well, that's not what I would have done" to undermine your credibility.

Patient Loyalty 

Patients will wait months to see Dr. Seller rather than scheduling with you — even if you're available tomorrow. And when a patient comes in expecting to see the new owner and spots the old doc walking down the hall, they may feel cheated.

A clean break with a well-crafted patient announcement letter and thoughtful reactivation scripts does a much better job than a work-back arrangement. If the seller wants to stay on long-term as an associate — that's a different conversation and can work well. But a 30-day or 90-day "introduction" period usually creates more problems than it solves.

Before you close, handle these:

• Obtain your Federal Tax ID (EIN) and State Tax ID
• Open business checking and savings accounts
• Set up merchant account for credit card processing
• Order new business cards, prescription pads, and stationery
• Contact insurance companies to begin credentialing — start this NOW, not after closing
• Obtain your DEA license
• Assign life, disability, and casualty insurance

Your First 90 Days — Win the Team, Keep the Patients

Here's the most important thing I can tell you about the transition: it's more important to win over the team than the patients.

The patients almost always follow the team.

My dad, Bill Kimball, DDS, discovered this the hard way when he sold his practice. He was sure his wonderful patients would be weeping at his doorstep, begging him to come back. They didn't. His ego was bruised, but he realized how much the patients loved his team. The team set the tone. If they expressed confidence in the new doctor and talked about what a great dentist he was, the patients were on board. If they rolled their eyes or made a critical comment, the relationship was damaged before it started.

On closing day, the seller terminates all employees, and you re-hire them. This is standard — it's a legal formality, not a layoff. But it needs to be presented to the team carefully. Reassure them that their jobs are secure, and match their existing pay rates and benefits. Don't cut compensation on day one. That's how you lose good people.

In your first meeting with the team, listen. Ask them what they think about the practice. Ask how it could be improved. Ask what they're looking for in you and how you can contribute to the smooth operation of the practice. Ask them about the patients. They've been here longer than you. Don't forget to listen.

Send the patient announcement letter right after close — not before. We have sample letters and can help you craft one that reassures patients and builds excitement about the future of the practice.

Don't change everything on day one. Assess systems before replacing them. Respect what the seller built, even if you plan to do things differently over time. Quick, visible improvements (fresh paint, updated signage, a friendlier front-desk workflow) build trust without disrupting what's already working.

Finally, join your local dental society, CDA, and ADA. The meetings, the legal resources, the insurance options, the networking — it's all worth it. And do a 30-day reconciliation of all vendors, utilities, and contracts to make sure everything has been properly transferred.

Frequently Asked Questions

How much does it cost to buy a dental practice?

Practice prices vary widely based on collections, profitability, location, and market conditions. A general practice in the U.S. typically sells for 65-85% of annual collections, or 1.75-2.5x the seller's discretionary earnings. A practice collecting $1 million annually might sell for $650,000 to $1,000,000, depending on profitability and other factors.

Can I buy a dental practice with no money down?

In many cases, yes. Dental lenders frequently offer 100% financing for practice acquisitions, meaning you don't need a large cash down payment. However, you'll still need liquid reserves (around 5% of the purchase price, minimum), a solid credit history, and the practice must generate sufficient cash flow to cover the loan and your living expenses.

Should I buy a dental practice or start from scratch?

For most dentists, buying is the better option. You get day-one cash flow, an existing patient base, established staff, and favorable financing terms. Scratch starts are risky, expensive, and can take years to break even. Startups may make sense in underserved areas or for unique specialty situations.

How long does it take to buy a dental practice?

From the start of your search to closing, the process typically takes 6-24 months. Once you sign a Letter of Intent, closing usually takes 60-90 days, though lease negotiations or financing complications can extend that timeline.

Do I need a broker to buy a dental practice?

You don't technically need one, but working with a broker who specializes in dental practice sales gives you access to more listings (including unlisted practices), expert guidance on valuation and deal structure, and connections to dental-specific lenders, attorneys, and CPAs. Most importantly, a good broker helps you avoid costly mistakes.

What should I look for when buying a dental practice?

Focus on cash flow (not just collections), overhead percentages, active patient count, payer mix, hygiene department strength, staff stability, lease terms, and facility condition. Look at the schedule backward, not just forward. And pay attention to your gut feeling when you visit the practice.

How much do dental practice owners make?

Owner dentists typically earn significantly more than associates doing the same work. Income varies widely based on practice size, location, and payer mix. According to ADA data, the average annual net income for owner GPs exceeds that of non-owner GPs by a considerable margin. The practice you buy should support your lifestyle and financial goals while still paying off the acquisition loan.

What credit score do I need to buy a dental practice?

Most dental lenders prefer a credit score of 680 or higher, though requirements vary. If your score needs improvement, start working on it now: pay all bills on time, put student loans on autopay, get a credit card and pay it off monthly. Improving your score is possible with discipline but takes time.

Ready to Start Your Search?

Whether you're buying your first practice or your fifth, we've helped hundreds of doctors navigate this process successfully. Join our inside buyer list to hear about practices before they hit the market, or schedule a free, no-obligation consultation to discuss your goals.

Register as a Buyer Here

Call us at (855) 337-4337 (855-DDS-4DDS) or check out our current listings at integritypracticesales.com/listings.