You've Found a Dental Practice.Is It the Right Purchase at the Right Price?
Before making an offer, understand what you're buying, what the practice is worth to you, and what could affect your ability to finance the acquisition.
Finding a dental practice that interests you is an important first step. But an attractive clinic, a promising patient base and a seller's asking price don't necessarily tell you whether the acquisition makes financial and commercial sense.
The seller may have provided an appraisal report, financial statements and other documents. Those documents contain valuable information—but they need to be examined together, from the perspective of the dentist who is considering the purchase.
At Meditax, I help dentists who have found a practice on their own evaluate the opportunity before committing to a purchase.
The objective is to help you determine whether to move forward—and what purchase price you should consider offering.
Request a Practice Purchase Review →We review the appraisal, financial information and available documentation to identify the practice's strengths, potential risks, opportunities for improvement and factors that could affect financing.
A Practice Can Be Worth the Asking Price—and Still Be the Wrong Purchase for You.
A seller's appraisal provides an opinion of the practice's value at a particular point in time, based on the information and assumptions used in the report.
It does not necessarily establish what you should pay.
Two dentists can look at the same practice and face very different financial realities.
May be able to maintain the clinic's existing production and profitability.
May need to recruit additional staff, replace equipment, change the services offered or invest in renovations.
The same acquisition can also have different financing implications depending on the buyer's situation and the lender's assessment.
That's why reviewing a dental practice requires more than confirming whether the asking price matches the appraisal.
The real question is whether the practice makes sense as an investment for you.
A purchase review helps you understand:
- Whether the appraisal's conclusions are supported by the information available.
- Whether the financial performance is sustainable.
- What additional investments or operating costs may be required.
- Where opportunities exist to improve the practice's performance.
- Which operational, commercial or lease-related issues could complicate the acquisition.
- How these findings should influence your proposed purchase price.
An Appraisal Is a Starting Point.Not a Purchase Recommendation.
When a seller provides an appraisal report, it's tempting to focus on one figure: the estimated fair market value.
But the conclusion is only as useful as the information, assumptions and methodology supporting it.
We examine the appraisal to understand how the value was established and whether there are elements that deserve closer attention.
We identify areas that may require clarification, additional documents or further specialist assessment.
An appraisal may support the asking price. It may also reveal reasons to negotiate—or reasons to reconsider the acquisition.
What financial performance, operating conditions and future expectations support the estimated value?
What equipment, leasehold improvements, goodwill and other assets are reflected in the appraisal? Are any significant replacements or investments foreseeable?
How were earnings assessed? Were adjustments made to the financial results, and are those adjustments reasonable?
Does the report adequately reflect staffing, patient activity, services offered, physical capacity and other factors that influence the business?
Is the report sufficiently current? Have there been changes in the practice since it was prepared?
Revenue Doesn't Tell You What You'll Earn.
A practice may generate substantial annual revenue without delivering the level of profitability a purchaser expects.
The financial review must look beyond gross production and collections.
We consider the practice's operating expenses, profitability, cost structure and the assumptions underlying its reported results. Particular attention may be given to the items shown here.
A practice's historical results are important, but they do not automatically represent what the purchaser will earn.
The objective is to understand the economics of the practice as it operates today—and how those economics may change under your ownership.
What Is the Practice Doing Today—and What Could It Do Better?
A dental practice purchase is not only an acquisition of existing revenue.
It is also the acquisition of an operating business with its own systems, clinical capacity, staffing structure and opportunities for improvement.
A practice may be underperforming in certain areas despite having valuable assets, an established patient base or room for growth. We examine opportunities that could influence the attractiveness of the acquisition.
Clinical capacity and scheduling
Are the available operatories being used efficiently? Is there capacity to accommodate additional patient appointments or clinical services?
Hygiene services
Does the practice have an established hygiene department? Could staffing or scheduling changes improve the use of available capacity?
Services offered
Are certain procedures routinely referred outside the practice? Could a purchaser with different clinical skills or interests reasonably expand the services provided?
Staffing and operations
Does the current staffing structure support the practice's activity? Are there operational inefficiencies that could be addressed?
Technology and equipment
Could investments in digital systems, equipment or workflow improve efficiency? What would those improvements cost?
Patient activity and growth potential
What do the available records suggest about the active patient base, recall activity and opportunities to develop the practice?
These opportunities must be assessed realistically.
An improvement that requires additional personnel, substantial investment or a change in clinical expertise cannot simply be treated as guaranteed future profit.
What the practice produces and earns as it currently operates.
What a purchaser may be able to build, once the required investment, staffing and expertise are taken into account.
We distinguish between the value the practice has today and the potential value a purchaser may be able to create.
Some of the Most Important Acquisition Risks Aren't on the Income Statement.
Two dental practices with similar financial results may present very different acquisition risks.
Certain factors can affect the continuity of operations, the buyer's ability to implement their business plan and the lender's willingness to finance the transaction.
The Commercial Lease
The lease deserves particular attention. A practice may be profitable and well equipped, but an unfavourable lease can create significant uncertainty for a purchaser.
A lender may be concerned if the purchaser cannot demonstrate adequate security of occupancy for the period relevant to the loan. For example, where the acquisition loan is repaid over 12 years, the lender will generally expect the lease, including its renewal options, to secure the premises for a comparable period.
A strong practice with an uncertain lease may be more difficult to finance than its financial statements suggest.
- Remaining lease term and renewal options.
- Assignment provisions and landlord consent requirements.
- Rent increases and additional occupancy costs.
- Restrictions affecting the use or operation of the premises.
- Relocation, demolition or redevelopment provisions, where applicable.
- Whether the available lease rights provide sufficient security for the proposed acquisition and financing.
Other Factors That Deserve Attention
How much of the practice's production depends on the seller's personal clinical skills, referral relationships or patient loyalty?
Will key employees remain after the acquisition? Are there recruitment challenges or staffing changes that could affect operations?
Are major equipment replacements, repairs or renovations likely to be necessary in the near term?
Does the patient population, geographic market and range of services fit the purchaser's intended practice?
Can the purchaser reasonably maintain the practice's activity during and after the transition?
These factors don't always make a practice unsuitable for purchase. But they can influence the price, the transaction conditions, the financing process and the level of risk the buyer is assuming.
A Good Practice Isn't Automatically an Easy Practice to Finance.
Financing a dental practice acquisition involves more than presenting the lender with a purchase price and an appraisal report.
The lender may consider the practice's historical performance, the purchaser's financial position, the proposed transaction structure and the risks associated with the business.
Some concerns are financial. Others are commercial or operational.
Our review helps identify issues that may deserve attention before the buyer submits an offer or advances the financing process. This can allow time to seek clarification, request additional documentation or consider appropriate purchase conditions.
Identifying a financing concern before making an offer is very different from discovering it after negotiations are underway.
Meditax does not make lending decisions or guarantee financing approval. Financing terms and requirements remain subject to the lender's assessment.
Spotted before the offer, each one can be clarified, documented or addressed in the purchase conditions.
The Asking Price Is the Seller's Position.Your Offer Should Reflect Your Analysis.
A seller may have a legitimate basis for their asking price. That doesn't mean the purchaser should automatically agree to it.
A purchase price should take into account the practice's assessed value, financial performance, required investments, operating risks, financing considerations and the purchaser's objectives.
Our review helps you develop an informed position on the price you should consider offering. Depending on the findings, that may mean:
The asking price appears reasonable based on the available information.
The practice is attractive, but certain costs or risks support a lower offer.
Additional information is required before proposing a price.
The acquisition presents concerns significant enough to reconsider proceeding.
We also consider how identified issues may affect the terms and conditions of an offer—not only the amount.
The objective isn't to negotiate the lowest possible price. It's to avoid paying a price that doesn't reflect the opportunity and the risks you're taking on.
Before You Make an Offer.Not After You're Committed.
The ideal time to request a review is when you've identified a practice that interests you and have received sufficient information from the seller or their representative to begin evaluating it.
At this stage, you may have access to an appraisal report, financial statements, a practice summary and other preliminary documents.
Through a colleague, a broker or your own network.
Appraisal, financial statements, practice summary.
The ideal moment, before any commitment.
Request it hereYour price and conditions.
Verification, financing, documentation.
- Decide whether the opportunity deserves further consideration.
- Identify questions to raise with the seller.
- Determine whether additional information or specialist assessments are needed.
- Form a reasoned view of the purchase price.
- Anticipate issues that may affect financing or transaction conditions.
If you've already signed a letter of intent or made an offer, a review may still be valuable, particularly where the transaction remains subject to due diligence or other conditions.
However, the earlier the review takes place, the more opportunity you have to use its findings in your decision-making and negotiations.
A Few Hours of Review.A Much Clearer Purchase Decision.
You don't need to commit to a lengthy or complicated process to get a professional perspective on a dental practice you're considering buying.
The review is a focused engagement designed to help you understand the opportunity, identify potential concerns and determine what you should consider offering.
Request Your Review
Contact me to let me know you've found a dental practice you're interested in purchasing.
We'll confirm the scope of the review and the applicable hourly rate before proceeding.
Scope confirmed firstSend Me the Documents
Forward the seller's appraisal report, financial statements and any other documents you've received, such as the commercial lease or information about the practice's operations, subject to any confidentiality agreement you've signed with the seller.
The more complete the information, the more useful our discussion will be.
I Review the Practice
I personally examine the documents, assess the appraisal and financial information, and prepare my observations.
I look for strengths, potential risks, opportunities for optimization and factors that may influence the purchase price or complicate financing.
About 1 to 2 hoursWe Discuss the Findings Together
We schedule a meeting by Microsoft Teams or telephone to go through my findings.
We'll discuss what attracted you to the practice, your professional goals and the type of clinic you want to build.
Together, we'll consider whether the seller's asking price makes sense, what you should consider offering, whether there are potential financing obstacles and whether the acquisition is a good fit for your objectives.
Teams or telephoneYou'll leave with a clearer understanding of the opportunity and the next steps to consider.
of professional work for most straightforward files, from document review to our consultation.
Billed on an hourly basis, according to the time required.
For most straightforward files, the entire process—including document review, preparation and our consultation—typically represents approximately 3 to 5 hours of professional work.
The time required may vary depending on the complexity of the practice, the documents provided and the questions that need to be addressed.
Before beginning, I'll confirm the applicable hourly rate and discuss the anticipated scope of work with you.
Request a Practice Purchase Review →If you decide to pursue the acquisition, Meditax can also assist with the legal and tax aspects of the purchase transaction under a separate or expanded mandate.
You've Found the Practice.Now You Need an Independent Perspective.
This service is designed for dentists who have already identified a dental practice they may want to purchase.
You may have found the opportunity through a colleague, another dentist, a broker or your own professional network.
- Perhaps you've already visited the clinic and received an appraisal.
- Perhaps the seller has provided financial statements and is waiting for you to make an offer.
- Or perhaps you're seriously considering a particular practice but aren't yet convinced that the asking price reflects what you're buying.
You don't need someone to find you a practice. You need someone to help you evaluate the one you've found.That is the purpose of the Dental Practice Purchase Review.
Still looking for the right practice? Our private buyer network introduces pre-qualified dentists to practices that are never publicly listed.
Join the private buyer network →FAQ
The seller already has an appraisal. Why do I need a review?
The appraisal provides an opinion of value based on its scope, assumptions and valuation date. A buyer-side review examines that information in the context of your proposed acquisition, including financial performance, required investment, operational risks and potential financing concerns.
Will you tell me whether the practice is a good purchase?
We assess the available information and identify factors supporting or weighing against the acquisition. Our findings are intended to help you make an informed decision, but no review can eliminate every business risk or guarantee future performance.
Can you help me determine how much to offer?
Yes. One of the principal objectives is to help you develop a reasoned purchase-price position based on the appraisal, financial information and other relevant factors. The scope and precision of that assessment depend on the information available.
Do you review the commercial lease?
Lease-related risks are an important part of the review when the lease is available. We consider provisions that may affect occupancy, continuity of operations, assignment and financing. Additional legal review or negotiation may be required as the transaction progresses.
Can you identify ways to improve the practice's profitability?
We examine potential opportunities for operational improvement and growth where the available information permits. We also consider the investments, staffing and other conditions required to pursue those opportunities. Future improvements are not treated as guaranteed earnings.
Does the review guarantee that the bank will finance the purchase?
No. A review may identify matters that could concern a lender, but each financial institution makes its own lending decisions based on its requirements and assessment of the transaction and borrower.
What if the seller hasn't provided all the documents?
We can begin by identifying what information is available and what additional documentation would be important. The extent of any conclusions will depend on the completeness and reliability of the materials received.
Can Meditax represent me if I decide to purchase the practice?
Yes. Meditax advises dentists on dental practice acquisitions, including transaction structuring, legal and tax considerations, negotiations, documentation and closing, subject to an agreed mandate and applicable professional obligations.
Before You Decide What to Offer, Understand What You're Buying.
A dental practice acquisition can shape your finances, your professional life and your future as a business owner for years to come.
The asking price is only one part of that decision.
A thorough review can help you recognize the strengths of an opportunity, understand its limitations and identify issues that deserve attention before you commit.
You've found a practice that interests you. Now establish whether it makes sense for you—and at what price.
Request a Dental Practice Purchase Review →Start by telling me about the practice you've found and the documents you've received. I'll review your inquiry personally and contact you to discuss the appropriate next steps.