Buying a Dental Practice Guide with Checklist and Steps

Buying a dental practice is for many the most direct route into self-employment. Instead of starting from zero, you take over a running practice with patients, a team and equipment. That is exactly what makes it appealing, but it also carries risk if you misjudge the price, the contracts or the hidden problems.

At Dr. Dr. Martin Baxmann MSc we have guided dentists and orthodontists along this exact path for more than 20 years. From that experience we know where the typical stumbling blocks lie. In this guide you get the complete overview from the first practice search to the finished handover, including a checklist you can tick off.

Why Taking Over an Existing Dental Practice Often Beats Starting from Scratch

With a practice takeover you buy not just chairs and equipment, but a working business. This difference decides your liquidity in the first months. While a takeover generates revenue from day one, a new practice often needs years before it pays off.

Still, a takeover is no sure thing. It suits you when you want to step quickly into a stable business without the long ramp-up of your own start-up. Where exactly your advantages lie is shown by the next three points.

Revenue from Day One Through an Established Patient Base

The biggest lever of an existing practice is the patient base. People know the address, have built trust and turn up for their appointments. This established recall secures you predictable income while you settle into the routines.

What matters is that you do not overestimate the loyalty. Part of the patients were attached to the previous dentist, not to the practice. Clarify early therefore how high the referral rate is and how many cases are currently in treatment.

An Experienced Team and Ready Infrastructure

An experienced team is worth real money. The staff know the software, the suppliers and the quirks of the practice. This knowledge you would have to build up laboriously in a new practice.

Alongside the team, the existing equipment saves you time and capital. Treatment units, X-ray technology and furnished rooms are already in place and running. Check the technical condition nonetheless, so that hidden replacement investments do not surprise you shortly after the purchase.

When Starting a New Practice Is Still the Better Choice

Not every practice is a win. If the location is poor, the technology outdated or the treatment spectrum does not fit you, founding a dental practice can make more sense. Then you shape everything from the start according to your own ideas.

The honest weighing belongs at the beginning of your decision. Calculate both routes before you commit. A takeover with hidden problems is more expensive than a clean fresh start.

How the Process of Buying a Dental Practice Works Step by Step

The process of buying a dental practice follows a fixed logic, even if every case has its own particulars. Whoever knows the sequence loses less time and makes calmer decisions. From the first idea to the practice sign, the process usually takes six to twelve months.

Roughly, the path splits into five phases that build on each other.

1. Practice search and getting a market overview
2. Shortlist and first meeting with the seller
3. Valuation and review of all documents
4. Financing and negotiating the purchase agreement
5. Handover and start in your own business

Practice Search and First Shortlist

At the beginning stands the search for the right practice. Use practice exchanges, dental depots, chambers and your own network, because many handovers happen without a public listing. A clear profile of your ideal practice saves you many fruitless viewings.

At the shortlist stage it is about the hard facts. Do location, size, treatment spectrum and price expectation fundamentally fit you? Only the candidates that clear this hurdle deserve a deeper review.

Practice Valuation and Due Diligence

Once a practice has convinced you, the detailed review begins. During due diligence you examine financial statements, patient numbers, contracts and the technical condition. This is where the attractive practice separates from the one that only looks good on paper.

Bring in specialists at the latest now, for example a tax advisor who focuses on health professions. If the review comes out clean, you can factor any discovered risks into the price or the contract.

Financing, Purchase Agreement and Handover

Once the value is fixed, you sort out the financing and negotiate the purchase agreement. Banks finance practice takeovers gladly, because the running business offers security. A solid business plan is your strongest argument in the bank meeting.

The handover itself you should not leave to chance. When the seller introduces you during a shared handover phase, that eases the transition for patients and team enormously.

How to Value a Dental Practice Realistically

The practice value is the most emotional point of any negotiation. The seller sees a life’s work, you see an investment that has to pay off. A realistic value consists of two building blocks, the tangible and the intangible share.

Tangible Value of the Equipment

The tangible value reflects the current worth of the equipment. Treatment units, X-ray devices, furniture and instruments are assessed by age and condition. What counts is the current value, not the original purchase price.

Ask to see the maintenance history of the devices. If a ten-year-old unit lacks a service record, that is a risk you should factor into the price.

Goodwill as the Intangible Value

Goodwill stands for the intangible value of the practice, meaning patient base, reputation and established routines. For well-run practices it often makes up the larger share of the purchase price. It is usually calculated from the sustainably achievable profit, not from turnover.

Check how strongly the success depends on the departing dentist. The more replaceable the service appears, the more stable the goodwill after your entry.

The Most Common Valuation Mistakes

In our advisory work we see the same patterns again and again. Buyers fall in love with a practice and ignore warning signs, or they accept goodwill that rests on a single good year. An inflated price weighs on your return for years.

The second typical mistake is looking at turnover alone. Two practices with the same turnover can yield completely different profits. Look therefore always at the result after all costs.

What Costs to Expect When Buying a Dental Practice

The costs of buying a dental practice depend heavily on location, size and equipment. The purchase price is only one part of the calculation. Whoever underestimates the additional costs comes under pressure before even opening.

For orientation, the following overview of typical price ranges helps:

Location type	Average purchase price	Note
City over 100,000 inhabitants	around 475,000 euros	high demand, strong competition
Rural region	around 377,000 euros	often cheaper, harder to find a successor
Overall range by scope	300,000 to over 1,000,000 euros	depends on size and specialisation

Purchase Price by Location and Practice Size

What does the purchase price depend on? Above all on earning power and location. In sought-after metropolitan areas you pay considerably more than in the countryside. A more expensive city practice can still pay off faster when the utilisation is right.

Alongside the location, the size acts directly on the price. Multi-dentist practices with several chairs cost more, but offer economies of scale that a small single practice cannot reach.

Additional Costs for Advice, Notary and Renovation

Beyond the purchase price, further items arise that you should plan for early. These include fees for tax and legal advice, costs for appraisals as well as charges for notary and licensing. These additional costs quickly add up to a five-figure sum.

Often a modernisation need comes on top. New software, fresh paint or an additional treatment unit make the practice yours, but cost extra. Plan a realistic buffer here.

Financing and the Conversation with Your Bank

Out of their own pocket the fewest buyers manage a takeover. Banks and development institutes offer suitable financing, but demand a convincing plan in return. The clearer your figures, the better your terms.

Prepare for the bank meeting like for an exam. A well-thought-out business plan, realistic revenue forecasts and proof of your professional qualification open the doors to financing.

These Contracts and Legal Points You Should Check Carefully

Legally, a practice takeover is demanding, because this is where the most expensive mistakes happen. Drafted cleanly, the contract protects you from claims and disputes. Three areas deserve your particular attention.

The Practice Purchase Agreement in Detail

The practice purchase agreement governs all economic and organisational questions. It sets out which assets transfer, how high the purchase price is and how ownership and risk change hands. An unclear wording at this point quickly turns into a cost trap.

Watch for provisions on warranty, the seller’s non-compete clause and the treatment of ongoing cases. Have the contract reviewed by a law firm specialised in medical law before you sign.

Lease, Premises and Licensing

If the lease wobbles, the finest practice is of little use to you. Clarify term, renewal options and possible rent increases, because the premises are your most important location factor. Without secured premises the whole purchase is at risk.

Equally central is the panel licence. For a practice with statutory health insurance patients, the takeover of the seat runs through a re-allocation procedure that demands time and care.

Staff Transfer Under Section 613a of the German Civil Code

When you buy the practice, you usually take on the staff automatically. This is governed by Section 613a of the German Civil Code, which transfers the existing employment relationships with all rights and obligations to you. You therefore cannot simply dismiss the staff because of the change of owner.

Get an overview early therefore of contracts, salaries and holiday entitlements. A good conversation with the team before the takeover builds trust and prevents resignations at the decisive moment.

Your Checklist for Buying a Dental Practice Step by Step

So that you keep the overview, here is a compact checklist for buying a dental practice. It is sorted by the three phases before, during and after the takeover. Tick the points off one by one and you miss no critical step.

Check Before the Takeover

• Location analysis carried out and catchment area assessed
• Financial statements of the last three years reviewed
• Patient base checked by number, structure and ongoing cases
• Technical condition of devices and rooms professionally assessed
• Financing framework pre-clarified with the bank

Secure During Negotiation

• Practice value independently verified instead of trusting the offer
• Purchase agreement legally reviewed
• Lease checked for term and conditions
• Licence and re-allocation applied for in good time
• Non-compete clause agreed for the seller

Organise After the Handover

• Team picked up and involved in a personal conversation
• Patients informed about the change in a friendly way
• Routines adjusted carefully instead of changing everything at once
• Marketing and public image switched to your name

What Is Different When Taking Over an Orthodontic Practice

An orthodontic practice follows its own rules that a general practice takeover does not capture. This is due to the long treatment times and the particular billing. Whoever takes over an orthodontic practice must think of these points from the start.

Taking Over Ongoing Treatment Cases Cleanly

In orthodontics, treatments stretch over years. On takeover you therefore inherit many cases that are in the middle of the process. The contractual handling of these ongoing cases is the trickiest point of an orthodontic takeover.

Clarify exactly which services have already been billed and which are still open. Only this way do you avoid working on for treatments already paid.

Billing and Panel Licensing in Orthodontics

Orthodontic billing is more complex than in general dentistry. Instalment plans, patient contributions and long treatment paths must be handed over cleanly. A mistake at the handover date costs you real fees here.

Your attention also needs the licensing. Check early how the orthodontic seat is transferred and which deadlines apply in the re-allocation procedure.

Plan the Handover with Foresight Not Gut Feeling

Especially in orthodontics, the quality of the handover decides your start. A structured transition, in which the seller introduces you to the cases, secures patient compliance. We accompany this process in our orthodontic practice handover with clear routines instead of gut feeling.

A well-thought-out system behind the practice makes you more independent of chance. If you want to plan your takeover on a solid basis, it is worth looking into guided practice takeover advice tailored precisely to orthodontic practices.

Frequently Asked Questions About Buying a Dental Practice

Below are the questions to ask when buying a dental practice that come up most often, answered briefly and to the point.

How Long Does Buying a Dental Practice Take on Average?

From the first search to the finished handover, usually six to twelve months pass. The duration depends on how quickly you find a suitable practice and how smoothly financing and licensing run. Plan a little more time rather than less, so that you make no decision under pressure.

How Much Equity Do I Need for the Takeover?

Banks usually expect an equity share of around ten to twenty percent of the total volume. The more you contribute yourself, the better the terms you get. What is decisive in the end is a coherent financing plan that also covers the additional costs.

Do I Automatically Take On the Staff?

Yes, when you buy a running practice the employment relationships pass to you under Section 613a of the German Civil Code. You take on the staff with their existing rights and cannot dismiss them solely because of the change of owner. Getting to know the team early therefore pays off twice over.

Is Buying or Starting a Practice More Worthwhile?

That depends on your situation. With a takeover you have immediate revenue and an experienced team, but pay goodwill and tie yourself to existing structures. If you start fresh instead, you gain full creative freedom, but need a long breath until the practice carries itself.

Your Next Steps to Your Own Practice

Good preparation decides the success of your takeover. Check figures, contracts and location with a cool head, bring specialists to your side and make no decision from the gut. Buying a dental practice is not a sprint but a project with clear stages.

If you want to plan your own path on a solid basis, we support you with experience from more than 20 years of practice and training. Get in touch for a free planning call and together we will see whether the practice in front of you really fits you.