Should I buy an existing dental practice or start one from scratch? For many dentists, buying an existing dental practice offers significant advantages over starting from scratch. An established practice provides immediate cash flow, an existing patient base, trained staff, proven systems, and operational infrastructure. Success depends on asking the right questions, evaluating the practice carefully, understanding its growth potential, and working with an experienced dental practice broker who can help determine whether the opportunity is the right fit for your goals.
Introduction
The reality for most dentists considering practice ownership is that they have little experience running a business. Billing, hiring staff, evaluating financial statements, and deciding whether to buy or start a practice can be overwhelming. While your clinical skills may be exceptional, purchasing a dental practice requires an entirely different set of business skills.
The good news is that successful practice acquisitions are often the result of asking the right questions, using common sense, planning conservatively, and working with an experienced broker like Lou Bermudez. Lou provides the financial information you need to make an informed decision while offering honest guidance about both the practice and whether it is the right fit for your goals.
Don’t let financing discourage you. Banks are very comfortable lending for dental practice acquisitions, and many lenders finance up to 100% of the purchase price. Purchasing an existing practice allows you to begin generating income immediately instead of spending years building a patient base from scratch.
At Practice Sales & Appraisals, we’ve handled hundreds of transactions, sold practices throughout California, valued thousands of dental practices, and helped generations of dentists successfully transition into ownership.
Should You Buy or Start a Practice?
One of your first decisions is whether purchasing an existing practice is a better choice than starting from scratch. Years ago, dentists could open a new office, grow alongside an expanding community, and gradually build a successful practice. Today’s environment is very different. Increased competition, higher operating costs, student loan debt, staffing shortages, and California’s business climate make starting from the ground up significantly more challenging.
Buying an existing practice offers several important advantages.
- Immediate Cash Flow: Patients are already scheduled, the phones are ringing, and the practice is generating revenue from day one.
- Established Infrastructure: Equipment, systems, referral relationships, software, and office procedures are already in place.
- Experienced Team: Existing staff members provide continuity while giving you the opportunity to improve communication, performance, and practice growth.
Are You Ready to Own a Practice?
You spent years developing your clinical skills. Now it’s time to prepare for one of the biggest business decisions of your career.
Ask yourself:
- Are you tired of someone else controlling your schedule and treatment planning?
- Do you want to build your own financial future instead of someone else’s?
- Do you want greater earning potential?
- Are you prepared for the responsibilities that come with practice ownership?
If the answer is yes, then it’s time to do your homework.
Do Your Research
Visit 10 to 15 practices currently for sale. Speak with brokers about market conditions. Talk with lenders to understand how they evaluate practices. Compare opportunities and ask questions.
While you’ll likely work with a consultant, accountant, and attorney, remember that many have never owned a dental practice themselves. They may understand contracts and financial statements, but they cannot determine whether a seller’s treatment philosophy matches yours or whether a particular opportunity aligns with your personal goals.
Ultimately, only you can determine whether a practice is the right fit.
Trust Your Instincts
When purchasing a practice, you’re really buying the opportunity for future revenue. That depends on patients returning, treatment plans being accepted, staff remaining engaged, and the office continuing to operate successfully after the transition.
Ask questions about referral patterns, treatment provided, office hours, staff retention, transition support, and practice history. Compare multiple opportunities before making your decision.
If something doesn’t feel right during your visit—whether it’s an unmotivated team, neglected facility, incomplete financial information, or an evasive seller—don’t ignore your instincts.
In the end, every practice has a different value depending on what it is worth to you.
Why Work With Lou Bermudez?
Throughout your search, you’ll encounter professionals willing to share their experience. Lou Bermudez is one of them.
Whether you have questions about market conditions, financing, professional referrals, or even a practice listed by another broker, Lou provides honest, unbiased guidance without pressure. His goal is helping you make a smart business decision—not simply closing another transaction.
Understanding Practice Valuation
There are many ways to estimate the value of a dental practice, but every buyer values different things. One buyer may place significant value on a short commute, while another may prioritize growth opportunities, demographics, or specialty services.
Although many valuation formulas exist, every situation is unique. Working with a broker who understands your goals is far more valuable than relying solely on mathematical formulas.
Percentage of Collections
The simplest valuation method multiplies annual collections by a percentage. While it provides a quick estimate, it often fails to account for the unique characteristics of each practice.
Multiple of Seller’s Net Earnings
This approach is commonly used in private sales. However, reported earnings often depend on how the seller structures financial statements, making the true profitability difficult to determine.
Multiple of EBITDA
Many accountants and financial professionals rely on EBITDA multiples. While useful in some industries, this method often overlooks many factors unique to dental practices and may lead buyers to pass on excellent opportunities.
Focus on the Bigger Picture
Successful acquisitions are about much more than the purchase price. Consider the practice’s cash flow, long-term sustainability, opportunities for growth, potential risks, and whether you have planned conservatively before the purchase and can execute successfully afterward.
For buyers, a $100,000 difference in purchase price often seems significant today but becomes much less important over time. Years later, most dentists remember whether they bought the right practice—not how much they paid for it.
For sellers, the overall structure of the transaction often matters more than the headline purchase price. Terms involving financing, transition assistance, staff retention, and completing existing treatment can create a more successful outcome for everyone involved.
Talk With Lou Bermudez
If you’re considering purchasing a dental practice, take advantage of Lou Bermudez’s decades of experience. He’ll answer your questions, explain market conditions, discuss financing, review opportunities, and help you determine whether a practice is the right fit for your career goals.
Call Lou Bermudez at (818) 519-8564 to discuss buying a dental practice and receive honest, experienced guidance before making one of the biggest investments of your career.