Dental Financial Advisory / Industry hub
Buying a Dental Practice: The Financial Work Before the Sign
Buying a dental practice is a financial transaction inside a clinical relationship: collections, patient base, staffing, lease and equipment all price into the deal. Pagac helps dentists buying a practice work through the financial analysis, valuation, financing, entity structure and tax consequences before they sign.
What should a dentist analyze before buying?
Multi-year financials with production compared to collections, adjustment and write-off history, patient flow and hygiene revenue, staffing costs, the lease and its transfer terms, equipment condition and the seller's transition commitment. Each item becomes a priced part of the deal or a risk the buyer accepts knowingly.
The financials behind a practice tell the story; the funnel shows whether production actually becomes cash.
How is a dental practice valued?
Practices are commonly valued with reference to collections and seller's discretionary earnings, with multiples that vary by market, specialty and transition terms. The structure of the price allocation, what is paid for equipment, patient relationships and goodwill, is at least as important as the total.
Because every practice is different, Pagac builds the valuation from the practice's own numbers rather than a borrowed formula.
What are the structure and tax considerations?
Practice purchases are usually structured as asset deals, with the allocation across equipment, leasehold improvements, patient lists and covenants affecting the tax result for buyer and seller. Financing structure and the buyer's entity choice follow from the same analysis.
The tax consequences depend on the facts and applicable law, which is why the structure is modeled before the letter of intent.
Buying a practice is diligence plus structure: the buyer who understands collections, lease and allocation controls the deal.
For practice owners
How financially intelligent is your practice?
The Pagac Financial Intelligence Assessment helps dentists see where their practice stands across structure, taxes, profitability, real estate and retirement.