Ready to sell your dental practice? Here’s how you can prepare

Selling a dental practice is a significant milestone in a dentist's professional journey, one that requires thoughtful preparation and strategic planning to ensure a successful transition. Long before the practice is listed for sale, the groundwork must be laid to present the practice as a valuable, organized, and turnkey opportunity for a prospective buyer. This process, if done thoroughly, not only maximizes the sale price but also accelerates the transaction and minimizes complications during due diligence.

Step into the buyer's shoes

The first step is to assess the current state of the practice from a buyer's perspective. This includes evaluating the financial health of the business, the strength and stability of the patient base, operational efficiencies, and the condition of the physical assets. Clean, accurate, and comprehensive financial records are nonnegotiable. A buyer will expect at least three years of tax returns, profit and loss statements, balance sheets, and production and collection reports. These documents must reflect consistency and transparency. Any irregularities or unexplained expenses can immediately raise red flags and delay negotiations. Additionally, the practice accounts receivable should be well- managed, with a low percentage of outstanding or uncollectible accounts.

Value beyond what's on paper

A dentist must also prepare to articulate the intangible aspects of the practice, such as the reputation in the community, the loyalty of patients and staff, and the practice's growth potential. Buyers are looking for continuity and knowing that long-term staff members will likely remain after the sale provides assurance that the transition will be smooth. It's also important that the seller begins reducing their central role in the practice well before the sale, gradually delegating responsibilities to associates or staff. This demonstrates to the buyer that the practice's success is not solely dependent on the seller's presence.

Keep your practice tidy

The physical condition of the office and its equipment is another crucial factor. Outdated technology, worn furniture, and deferred maintenance can be deterrents. Even if a full renovation isn't feasible, simple cosmetic upgrades such as fresh paint, clean flooring, and organized workspaces can make a substantial difference in perception. The equipment should be in good order, and a complete inventory should be available for review. Digital systems, including electronic health records, imaging software, and billing platforms, should be up -to -date and user-friendly. Practices that are technologically modern tend to have higher appeal because they signal efficiency and readiness for the future.

Legal and regulatory readiness

The seller should ensure that all licenses are current, HIPAA protocols are documented and followed, and employment agreements are clear and compliant with labor laws. Any lease agreements for the office space should be examined, and if the seller owns the building, decisions need to be made about whether it will be sold with the practice or leased to the buyer. In either case, favorable lease terms will be a key consideration for buyers.

From the buyer's standpoint, due diligence is about minimizing risk and confirming value. They will want to verify the accuracy of financial statements, assess patient demographics and retention rates, and analyze procedure mix and insurance participation. Understanding whether revenue is primarily generated from routine hygiene or high-margin procedures can influence how a buyer views the practice's sustainability. They will review the scheduling system, the number of active patients, new patient flow, and appointment lead time to determine how busy the practice truly is.

They'll also be interested in the terms of employment contracts, benefits, and staff turnover.

Buyers may also conduct a chart audit to evaluate the consistency of treatment planning, diagnostic coding, and case acceptance rates. If the documentation is poor or the billing appears inconsistent with the services rendered, it could suggest compliance issues or inefficiencies.

Another major factor is whether the practice has room to grow. Practices located in expanding communities or with untapped marketing potential are more attractive. Buyers want to see pathways for future profitability, whether through increasing hours, adding specialties, or upgrading systems.

Closing thoughts

Ultimately, the dentist preparing to sell must view the transaction not as the end of their career, but as the start of someone else's. Taking the time to tidy up every aspect of the practice-from books and legalities to branding and esthetics-can significantly improve outcomes. Professional advisors such as CPAs, brokers, and attorneys who specialize in dental transitions should be engaged early to guide the process and provide objective insight. By anticipating what a buyer will look for, a dentist can proactively address concerns, inspire confidence, and facilitate a transition that benefits both parties.

Editor's note: This article appeared in the July/August 2025 print edition of Dental Economics magazine. Dentists in North America are eligible for a complimentary print subscription. Sign up here.