Buying a dental practice checklist
- Asking price as % of collections
- 75
- Price per active patient
- $416.67
- Collections per active patient a year
- $555.56
- Net income before the owner's pay and debt, a year
- $380,000
The only constants in these sheets are the two payment tables: the monthly payment per $1,000 borrowed over 10 years and over 5 years, at half-point rates between 3% and 15%, computed from the standard amortisation formula. Every other number is worked from the figures you enter: the price, the shares, the rates, the earnings, the documents and the days, with the arithmetic printed beside each answer. The 10 year term is the longest an SBA 7(a) note runs for a purchase without real estate; the defaults are one buyer's worked example, not a price guide and not a lender's offer.
The figures start from a worked example (75) and every answer is worked from the figures you enter: put your target's own price, terms and earnings in and read yours.
Download the Buying a dental practice checklist worked example (CSV)
This is the buying a dental practice checklist as a sheet rather than a list, because a list tells you what to ask for and a sheet tells you how the asking is going. Enter the asking price, last year's collections, the active patient count, the overhead percentage from the seller's profit and loss, the number of documents you have requested and received, and the days from the letter of intent to closing and how many have passed. It returns the price as a share of collections, the price and the collections per active patient, net income before your pay and debt for the year and the month, the documents still outstanding, the checklist's completion, the days left and how many documents a week you must chase to close on time. The figure that changes behaviour is the last one: a chase rate in week two is a phone call, in week eight it is a delayed closing.
What the asking price implies
$750,000 on $1,000,000 of collections is 75% of collections; across 1,800 active patients it is $416.67 a patient, each of whom produced $555.56 last year. Enter the seller's report and the ratios update; they are for comparing targets, not for deciding what a practice is worth.
What the practice earns before you are paid
At 62% overhead the practice keeps $380,000 of its $1,000,000, or $31,666.67 a month, before the owner's pay and before any note. That is the figure the funding stack has to fit inside, and the one your lender will rebuild from the tax returns you have requested.
How the paper is going
Twenty-four documents asked for and sixteen received is eight outstanding and 67% complete. With 60 days to closing and 20 gone there are 40 days left, so a document a week keeps the closing date; the register in Pro keeps each item's requested and received date so the chase is a list and not a memory.
What buyers ask before they trust the Buying a dental practice checklist
Which documents make up the twenty-four? Three years of tax returns and profit and loss statements, production and collections by provider, the active patient definition and count, new patient flow, the fee schedule, insurance participation, the lease and assignment terms, staff contracts and pay, the equipment list with ages, any claims or board history, and the seller's transition terms. Yours may be longer; enter your own count.
Why price per active patient? Because two practices at 75% of collections can differ entirely in what you are buying: 1,800 patients producing $555.56 each is a different practice from 900 producing $1,111.11, and the second depends on fewer relationships surviving the handover.
Is net income before the owner's pay a valuation? No. $1,000,000 of collections at 62% overhead is $380,000 before your pay and any debt, which is the figure the acquisition cost calculator on this site tests the notes against. What the practice is worth is your valuation's question, and this site does not answer it.
Where the constants in this tool come from
IRS: About Form 8594, the asset acquisition statement both sides file.
SBA: Buy an existing business or franchise, investigating the business.