A dentist once called me about a practice he was close to buying. The broker summary showed roughly $1.5 million in annual collections. The selling dentist had been a fixture in his community for decades. The practice looked stable, established, and priced accordingly.
On paper, it looked like everything a buyer could want.
Then I looked at the active patient count: approximately 700 patients.
That number stopped me cold. How does a practice generate $1.5 million in production from 700 active patients? The math doesn’t work, unless something else is driving it.
It was.
When we examined the procedure mix, the picture came into focus. Over a long career, the selling dentist had completed an enormous volume of high-value restorative work for his patient base: crowns, bridges, implants, major reconstructive cases. His patients were loyal, and largely treated. They were now returning mostly for hygiene visits and maintenance.
The production numbers were real. But they reflected the completion of a career’s worth of dentistry, not the ongoing engine of a healthy, growing practice. Without a strong new patient pipeline to replace that restorative demand, sustaining $1.5 million in collections under new ownership would have been nearly impossible.
The headline told one story. The data told another.
The buyer walked away. Several months later, he acquired a different practice, smaller on paper, but with a larger active patient base and healthy new patient flow. Today, he’s thriving.
This story isn’t the exception. It’s the rule.
What the Marketing Summary Never Shows
Practices that look strong on the surface routinely contain risks that never appear in a marketing summary:
- A declining or aging patient base
- A hygiene department running at a fraction of its potential
- Write-offs and adjustments quietly eroding profitability
- Heavy insurance dependency compressing margins
- Production built around procedures the incoming buyer doesn’t even perform
None of these show up in the headline numbers. All of them can define a buyer’s future.
Unlike buying a building or a piece of equipment, you’re acquiring a living, breathing business whose health depends on dozens of interrelated variables. Miss enough of them, and the practice you thought you bought bears little resemblance to the one you actually own.
The loan doesn’t pause if collections fall short. Payroll doesn’t pause. Rent doesn’t pause. A bad acquisition doesn’t just cost you money; it can cost you years.
Due diligence isn’t a formality. It’s career protection.
This is an excerpt adapted from my book, The Smart Dentist’s Guide to Buying a Dental Practice, available now on Amazon.
Work with JoAnne for independent, operations-first due diligence that looks past the headline numbers to the variables that actually determine whether a practice will thrive under your ownership.