Dental Practice Buyer FAQs

1Q: Can Menlo Dental Transitions represent me as a purchaser?
A: Of course! We provide a wide range of services for purchasers whether you are purchasing in a private transaction or with the assistance of another broker. Buyers may be responsible for the costs of our services, but those costs are minor compared to the costs of a poorly evaluated or reviewed practice opportunity.
2Q: Will the staff stay after I purchase the practice?
A: The staff is typically as worried about keeping their job as you are about keeping them. If they leave, they have to start working with a new team, seeing new patients, so why wouldn’t they give you a chance? Menlo can help advise and navigate a smooth transition for you when it comes to staff and vendors.
3Q: Will my patients accept a new dentist?
A: The large majority of your patients will accept a new doctor if the introduction and transition are handled the right way. Our anecdotal experience at Menlo Transitions is that a general range of patient attrition of 5-10% is typical. The endorsement of the previous dentist, coupled with staff acceptance and enthusiasm, is the key.
4Q: How does one determine the value or worth of a practice?
A: We utilize three different methods and generate documentation consistent with USPAP (Uniform Standards of Professional Appraisal Practice) standards. All values generated by the multiple methods we use are weighed and considered in order to determine fair market value. The key metrics include gross revenue, overhead and cash flow. Our board certified practice appraisals use asset, income and market based approaches. Typically, a valuation considers a weighted average of the last three years’ revenue and adjusted owner profits.
5Q: How can Menlo Dental Transitions help me find the ‘right’ practice?
A: A buyer needs to be able to envision him or herself in the practice they may be purchasing. A dentist should be a good fit to the basic philosophy, skill level and personality style of the seller and feel comfortable in the community and market. This increases the likelihood that the practice is a good match. Based on our experience, we will help match these qualitative areas as well as evaluate the quantitative numbers of the practice.
6Q: What options do I have for or buying?
A: There are numerous methods of transferring ownership in a practice: complete purchase; delayed buy-in/buy-out through partnership; or merger. The buyer and seller will agree on an arrangement that is a good fit for both. If a seller will be working at the practice for less than two years, a complete sale is usually the method of choice. You can find the details of every selling option on our Options for Selling Your Practice page. Menlo knows how important a financial fit is for the buyer and we work hard to ensure that the sale of a practice is a successful business venture for both parties.
7Q: Is it necessary to have the seller work at the practice after the sale?
A: No, most dental practice sale transactions do not require the previous owner staying on as an associate, particularly if the practice being sold is a general private practice. If the practice is large enough and supporting more than one working dentist it could be an advantage to the buyer to have the seller stay on if they are agreeable to do so.
8Q: How long should the transition last?
A: Most practice sale transitions are quite brief. The keys to a successful transition are a good letter of introduction and a staff who will help endorse the new doctor. In many general practices, the transition lasts only until the owner finishes the cases that were in progress as of the closing date. If the practice can support more than one doctor and the seller would like to stay on, then the transition can last as long as agreed to by both doctors. In specialty practices, a transition may need to be longer to accommodate the referral sources introduction to the buyer.
9Q: Is it necessary to use an accountant and or an attorney?
A: As a advisor and agent we recommend both seller and buyer seek counsel from an accountant and attorney. This is a large financial decision and we believe that diligence before and during the process mitigates problems and heartache after. Only an attorney can offer legal advice and only an accountant can offer tax advice. Buyer and seller are welcome to use any attorney or accountant they wish, we just recommend that they use someone familiar with the business of dental practices, so they will be adequately represented and protected. Referrals for accountants and attorneys are available upon request. Menlo Dental Transitions is not a legal firm and all of our services are provided as a courtesy to both buyer and seller.
10Q: How is the lease or real estate transfer handled?
A: Menlo Dental Transitions is the best suited transition advisor to help with this facet. We have negotiated over 1000 leases, purchases and lease renewals on behalf of dentists. Seller owned real estate will be sold or leased to the buyer at an agreed upon value or leasing rate. If the real estate is purchased along with the practice, a lender may require a down payment on the building.

Once due diligence and loan approval has been completed, it is typical for the broker to initiate the lease assignment request. A buyer will have to apply with the landlord and be approved as a tenant for the lease assignment or new lease if available. Most practice sales use an assignment of an existing lease to prevent any increases in rent to the new owner of the practice which could occur by the negotiation of a new lease. Buyers will need to obtain a lease that is the term of their practice acquisition loan. When the lease assignment is initiated we can research additional lease renewal options and potentially save you even more money.