Begin With Revenue by Clinician
Ask for revenue by clinician before anything else. A practice where the principal produces most of the revenue is a very different proposition from one with three long-serving associates, even if the total is identical.
Then establish what happens to that revenue if the principal leaves at settlement: which patients they treat, whether the work is transferable to you, and whether a replacement clinician would need to be recruited and at what cost.
Test Patient Activity Rather Than Patient Numbers
A patient list is only useful to the extent those patients still attend. Ask how many patients have attended in the last eighteen to twenty-four months, what the recall system is, how many recalls convert into appointments, and how many new patients arrive each month and from where.
A large historical list with weak recall performance is worth much less than a smaller list with active attendance.
Understand the Treatment Mix
Revenue composition tells you whether the earnings are transferable. Implant, orthodontic, endodontic and surgical work often depends on a specific clinician's training, while general and hygiene work is usually more portable.
Compare the mix to the work you intend to do personally. If a material share of revenue relies on procedures you do not perform, that revenue needs to be discounted or a clinician retained.
Examine Associate Arrangements
For each associate: how long they have been at the practice, whether they are employed or contracted, their percentage, their days, whether a restraint applies, and whether their arrangement transfers on the same terms.
Associate departures at or shortly after settlement are one of the main ways an acquisition underperforms its forecast.
Inspect Surgeries, Equipment and Future Capital
Count the surgeries, then find out how many are actually used and for how many hours. An unused but equipped surgery is capacity you can fill; an unequipped one is capital you will need to spend.
Review equipment age and condition, imaging, sterilisation, chairs, compressor and suction, and any plumbed or built-in items that cannot be relocated. Confirm what is owned, what is financed and what is leased.
- Equipment schedule with purchase dates and finance balances
- Service and maintenance records for chairs, imaging and sterilisation
- Software, imaging and hardware in use, and licence transferability
- Any capital works required by the lease or by compliance obligations
Verify the Financial Information
Work back from the tax returns and financial statements to the adjusted earnings being presented, and ask for the document behind each adjustment. Reconcile clinical software revenue reports against banking and accounting records.
Check the treatment of stock, laboratory costs, materials, staff leave entitlements and any prepaid treatment plans, since each affects the earnings figure and the settlement adjustments.
Review the Lease and Premises Early
Dental fit-out is expensive and largely immovable, so the lease carries unusual weight. Confirm the remaining term, options, rent review mechanism, outgoings, assignment provisions, make-good obligations and any landlord works.
A short remaining term with no option is a genuine risk to the value of everything you are buying, not a technicality to resolve later.
Staff, Systems and Compliance
Confirm staff roles, hours, award classifications, length of service and leave balances, and whether key staff intend to stay. Check infection control documentation, radiation licensing for imaging equipment, and complaint or incident history.
Systems matter commercially: documented recall processes, appointment book management and clear reporting are what make the earnings repeatable after you take over.
Plan the Transition Before You Sign
Agree how and when staff and patients are told, how long the principal remains and in what capacity, how patients treated by the principal are reallocated, and what restraint applies.
Set this out in the contract rather than leaving it to goodwill after settlement.
A Practical Order of Work
Many buyers find due diligence more efficient in sequence than in parallel: financial and clinician revenue first, then patient activity and treatment mix, then equipment and premises, then staff and compliance, then contract and finance. Each stage tells you whether the next is worth paying for.
Limitations of This Guide
This is general information about the commercial acquisition process, not legal, accounting, tax, finance or clinical advice. Engage your own accountant, solicitor and finance adviser, and where appropriate a clinical or equipment specialist, for advice on a specific practice.