The Smart Dentist's Guide to Buying a Dental Practice
Charts & Figures, in full color. Every benchmark and table from the book, now interactive. Explore the numbers that separate a strong dental practice acquisition from an expensive mistake.
On This Page
Twenty-four charts and tables from the book. Jump to any figure.
Introduction
Chapter 4: The Numbers That Matter
Chapter 5: Insurance Participation
Chapter 6: The Hygiene Department
Chapter 7: Evaluating the Team
Chapter 8: Technology and Systems
Chapter 9: Putting It All Together
Chapter 10: Working With Advisors
Buyer's Toolkit
Two $1 Million Practices, Very Different Outcomes
Two practices can post identical collections and be worth completely different amounts. The headline number tells you almost nothing. What matters is underneath it: the patient base, hygiene strength, insurance mix, and new patient flow.
Same Collections, Different Engines
| Metric | Practice A | Practice B |
|---|---|---|
| Annual collections | $1,000,000 | $1,000,000 |
| Active patients | 600 | 1,900 |
| Hygiene production | 20% | 35% |
| Insurance structure | Primarily discounted lower-network plans | Diversified / lower-network dependency |
| New patients per month | 8 | 28 |
| Estimated owner income | ~$120,000 | ~$300,000+ |
New Patients per Month
Estimated Owner Income
Same headline number. Fundamentally different opportunities. Practice B carries more than three times the patient base and far stronger new-patient flow, which is why its owner income can run more than double Practice A's on the same collections.
The two-practice comparison above is an illustrative example for educational purposes.
The Numbers That Matter
Production, collections, procedure mix, hygiene, and accounts receivable are where a practice tells you the truth about its health. These are the benchmarks every buyer should pull and read closely.
Production vs. Collections, Three-Year Summary
The gap between production and collections is widening: the collection rate slipped from 90% to 87% over three years. A falling collection rate can signal weak financial policies or rising insurance write-offs.
Transferable Procedure Mix
- Transferable production 83%
- Buyer does not perform 17% Roughly $350K of $2.0M
If the seller produces $2.0M but the buyer does not perform $350K of those procedures, the effective transferable production is closer to $1.65M.
Hygiene Production as a % of Total
Hygiene should drive 30 to 35% of total production in a healthy practice. Below 25% often points to weak recall and undertreated periodontal disease.
Accounts Receivable Aging, Healthy Distribution
The further receivables age, the less likely they are to be collected. A healthy practice keeps the bulk of A/R current and very little past 90 days.
Production per Active Patient
| Metric | Practice A | Practice B |
|---|---|---|
| Annual production | $1,200,000 | $1,200,000 |
| Active patients | 900 | 1,600 |
| Production per patient | $1,333 | $750 |
| Production if raised to $1,000 / patient | Already exceeded | $1,600,000 |
| Growth potential | Limited | Strong |
Active Patient Base, Same Production
Two practices with identical production can have very different futures. Practice B's larger, lightly-treated base of 1,600 patients has far more room to grow per patient; Practice A's 900 heavily-treated patients are already near their ceiling.
Insurance Participation
Insurance participation quietly sets the ceiling on profitability. The same procedures pay very differently across plans, and a single network decision can move six figures of net income.
Network Reimbursement Reduction vs. Full Fee, Common Procedures
The same clinical work, performed identically, is reimbursed far less under a lower contracted tier. The drop is steepest on high-value procedures like implants and orthodontics.
Sample Network Reimbursement Reduction vs. Full Fee, Common Procedures
| Procedure | Reduction: Higher vs. Lower Contracted Tier |
|---|---|
| Crown | 20–25% lower |
| Implant crown | 40–50% lower |
| SRP (4+ teeth) | 40–45% lower |
| Implant placement | 35–40% lower |
| Comprehensive ortho (adult) | 30–35% lower |
| Occlusal guard | 40–45% lower |
| Adult prophy | 20–25% lower |
Income Impact: Higher-Tier to Lower-Tier Transition
On a $2M practice, a roughly $200K drop in collections from a higher-tier to lower-tier reimbursement shift can cut net income from about $350K to $150K. Insurance participation is not a clerical detail; it is one of the largest levers on owner income.
Detailed Fee Schedule Analysis, Full-Fee vs. Network-Discounted (Actual Practice Evaluation)
| Code | Procedure | Higher-Tier Production | Lower-Tier Production | Revenue Gap |
|---|---|---|---|---|
| D0120 | Periodic oral evaluation | $31,720 | $15,860 | -$15,860 |
| D0150 | Comprehensive oral evaluation | $4,902 | $1,995 | -$2,907 |
| D0274 | Bitewing (four images) | $41,322 | $22,116 | -$19,206 |
| D1110 | Prophylaxis (adult) | $93,799 | $70,591 | -$23,208 |
| D2330 | Resin – 1 surface, anterior | $4,984 | $2,688 | -$2,296 |
| D2331 | Resin – 2 surfaces, anterior | $5,150 | $2,800 | -$2,350 |
| D2332 | Resin – 3 surfaces, anterior | $3,248 | $1,862 | -$1,386 |
| D2335 | Resin – 4+ w/ incisal angle | $876 | $483 | -$393 |
| D2391 | Resin composite – 1s, posterior | $18,718 | $10,192 | -$8,526 |
| D2392 | Resin composite – 2s, posterior | $42,064 | $22,704 | -$19,360 |
| D2393 | Resin composite – 3s, posterior | $10,222 | $5,890 | -$4,332 |
| D2740 | Crown – porcelain/ceramic | $79,800 | $63,675 | -$16,125 |
| D2950 | Core buildup, incl. pins | $11,808 | $5,945 | -$5,863 |
| D4341 | Perio SRP – 4+ per quad | $23,808 | $13,536 | -$10,272 |
| D4910 | Periodontal maintenance | $37,399 | $25,351 | -$12,048 |
| D6010 | Surgical placement, implant | $20,647 | $12,727 | -$7,920 |
| D6056 | Prefab abutment | $13,750 | $7,986 | -$5,764 |
| D6066 | Implant crown – porcelain/metal | $30,533 | $16,606 | -$13,927 |
| D6071 | Abutment crown – porcelain/metal | $3,012 | $1,390 | -$1,622 |
| D8040 | Limited ortho, adult | $3,707 | $1,732 | -$1,975 |
| D8080 | Comprehensive ortho, adolescent | $58,128 | $45,216 | -$12,912 |
| D8090 | Comprehensive ortho, adult | $238,620 | $154,488 | -$84,132 |
| D8220 | Fixed appliance therapy | $885 | $374 | -$511 |
| D8680 | Orthodontic retention | $679 | $253 | -$426 |
| D9944 | Occlusal guard | $15,147 | $8,370 | -$6,777 |
| Total | All 25 codes above | $794,928 | $514,830 | -$280,098 |
The Hygiene Department
Hygiene is the engine room of a healthy practice. It drives recall, diagnosis, and a large share of doctor production. These benchmarks show what strong looks like.
Hygiene Production Benchmark
A reinforcement of the Chapter 4 benchmark: healthy hygiene runs 30 to 35% of total production.
Hygiene Reappointment Rate Benchmarks
The reappointment rate is the single best measure of recall health. Below 70% needs immediate attention.
Financial Impact of a Single Hygienist
At $1,200 per day across 192 days, direct hygiene production is about $230K. With a 2x multiplier for doctor treatment generated through hygiene diagnosis and recall, one productive hygienist can drive roughly $690K in total annual impact.
Evaluating the Team
Payroll is usually the largest controllable expense in a dental practice. These ranges show where a well-run team typically lands as a percentage of collections.
Team Payroll Benchmarks, % of Collections
Total team payroll above roughly 32% of collections deserves a closer look at staffing levels, scheduling efficiency, and fee schedules.
Technology and Systems
The practice management system and the equipment behind it carry real risk and real cost. Know which reports to pull and how much useful life is left in the hardware.
Essential Reports From the Practice Management System
| Report | What It Reveals |
|---|---|
| Production by Procedure Code | Clinical mix and procedure concentration |
| Production by Provider | Revenue distribution across doctors and hygienists |
| Collections Report | Production vs. actual collections over time |
| A/R Aging Report | Financial policy effectiveness and collection patterns |
| Active Patient Report | True size of the engaged patient base |
| Hygiene Reappointment Rate | Recall system strength and patient retention |
| Adjustment Report | Write-off patterns and financial policy gaps |
Dental Equipment, Typical Lifespan
Aging equipment is a future capital cost. Map the age of major assets against these ranges to estimate upcoming replacement spending.
IT Infrastructure Evaluation
| Area | Key Questions to Ask |
|---|---|
| Server and Network | Is the server still under manufacturer support? How old is it? |
| Workstations | Can the computers run current practice management software reliably? |
| Backup Systems | Is patient data backed up automatically and stored off-site? |
| Cybersecurity | Are firewalls, antivirus, and HIPAA-compliant protections current? |
| Software Integration | Do the imaging systems and PMS communicate properly? |
| Upgrade Costs | What would it cost to bring the system fully current? |
Putting It All Together
A disciplined buyer requests the same core reports every time, watches for the same warning signs, and looks hard at how concentrated the practice is on any single payer.
12 Reports Every Buyer Should Request
| # | Report | What It Reveals |
|---|---|---|
| 1 | Production by Procedure Code | Clinical mix and procedure concentration |
| 2 | Production by Provider | Revenue distribution by doctor and hygienist |
| 3 | Collections Report | Production vs. actual revenue over time |
| 4 | Adjustment Report | Write-off patterns and financial policy gaps |
| 5 | A/R Aging Report | Collection effectiveness and financial policy strength |
| 6 | A/R Credit Balance Report | Hidden liabilities owed back to patients or insurers |
| 7 | Active Patient Report | True size of the engaged patient base |
| 8 | New Patient Report | Monthly new patient flow over 24 months |
| 9 | Hygiene Reappointment Rate | Recall system strength and patient retention |
| 10 | Unscheduled Treatment Report | Diagnosed but unaccepted treatment opportunity |
| 11 | Insurance Participation Report | Plan mix, concentration, and reimbursement levels |
| 12 | Fee Schedule and Utilization | Fee competitiveness and scheduling efficiency |
Early Warning Signs to Investigate
| Warning Sign | What It May Indicate |
|---|---|
| Production far exceeds collections | Heavy write-offs, weak financial policies, or insurance compression |
| Production spike the year before sale | Accelerated treatment or delayed diagnosis being completed |
| Under 1,000 active patients with high production | Heavily-treated base with limited future restorative demand |
| A/R over 90 days exceeds 10% of total | Weak collections culture and financial policies not enforced |
| Declining new patients over 24 months | Shrinking pipeline and weakening community presence |
| A single plan over 50% of collections | High concentration risk if reimbursement or status changes |
| Hygiene production below 25% of total | Underutilized hygiene, weak recall, undertreated perio disease |
| Significant procedures the buyer does not perform | Effective production lower than reported production |
| Routine co-pay write-offs | Revenue leakage, compliance risk, financial policy breakdown |
Payer Mix and Insurance Concentration
- Full-Fee Plan A 58% Single-plan dependency risk
- Network Plan A 14%
- MetLife 11%
- Other insurance 9%
- Fee-for-service 8% Opportunity to grow
Payer Mix Analysis, Insurance Concentration (Actual Practice Evaluation)
| Insurance Plan | % of Collections | Risk Level |
|---|---|---|
| Full-Fee Plan A | 58% | High single-plan dependency |
| Network Plan A | 14% | Moderate |
| MetLife | 11% | Moderate |
| Other insurance | 9% | Low |
| Fee-for-service | 8% | Low room to grow |
When one plan drives 58% of collections, the practice is exposed: a single change to that plan's reimbursement or status can reshape the entire income picture. Concentration above 50% in one payer is a clear due diligence flag.
Working With Advisors
No single advisor sees the whole picture. Knowing what each one covers, and what they leave out, is how a buyer avoids blind spots between the financial, legal, lending, and operational layers.
What Each Advisor Brings, and What They Don't
| Advisor | Primary Focus | What They Typically Don't Review |
|---|---|---|
| Practice Broker | Markets the practice, coordinates the transaction | Represents the seller, not the buyer |
| Dental CPA | Tax returns, P&L, overhead, projections | Operational reports from the PMS |
| Attorney | Purchase agreement, lease, employment docs | Clinical or operational performance data |
| Lender | Collections history, buyer creditworthiness | Patient base trends and operational health |
| Dental Practice Consultant | Operational reports, systems, practice health | Legal documents and tax structuring |
Questions to Ask Before Engaging Each Advisor
| Advisor | Questions Worth Asking |
|---|---|
| Dental CPA | How many dental practice acquisitions have you supported in the last 12 months? What overhead benchmarks do you use? Have you ever identified a financial red flag that changed a deal? |
| Attorney | Have you reviewed dental practice purchase agreements specifically? What lease provisions do you look for in dental transitions? How do you approach non-compete language? |
| Lender | Do you specialize in dental practice lending? How do you evaluate practices with declining patient bases? What year-one cash flow scenarios do you model? |
| Dental Practice Consultant | What operational reports do you request during due diligence? How do you evaluate hygiene department health? Have you found issues that were not visible in the financials? |
The Complete Advisory Team
| Layer | Covered By | What It Reveals |
|---|---|---|
| Financial | Dental CPA | Tax performance, overhead, profitability, projections |
| Legal | Attorney | Purchase terms, lease protections, employment obligations |
| Lending | Dental Lender | Financing structure, cash flow modeling, debt service |
| Operational | Practice Consultant | Patient base health, hygiene systems, production patterns |
Due Diligence Checklist
Track your report requests as you evaluate a practice. Your progress is saved in this browser, so you can return to it later. Request every item in writing from the seller or broker before the letter of intent.
Buyer's Due Diligence Checklist
Request all items in writing from the seller or broker prior to the letter of intent.
Want the full playbook behind these numbers?
These charts are the reference layer. The book walks through how to read each one, what to ask, and how operational due diligence protects you from an expensive mistake. Get your copy, or download the full-color charts to keep on hand.