Buying a dental practice is probably the biggest financial decision you will make in your career. It is exciting, terrifying, and if done well, transformative. Here is what the process actually looks like, based on how successful acquisitions typically unfold.
Before you start looking
The first step happens before you even see a practice for sale: get your finance sorted. Talk to lenders who specialise in healthcare businesses. NAB Health, ANZ Health, and specialist lenders like BOQ or Medfin all have dental practice loan products.
Getting pre-approved gives you two advantages. First, you know your budget before you fall in love with something you cannot afford. Second, when you find the right practice, you can move quickly—sellers prefer buyers who have their finance ready.
Typical terms: 10-20% deposit, loan period of 7-15 years, and interest rates at business loan levels plus a margin.
Finding opportunities
Practices come to market through several channels. Brokers like Henry Schein, Medibroker, and Benchmark handle most listed sales—they will send you opportunities matching your criteria. But not every sale is listed publicly.
Some of the best opportunities come through word of mouth. Tell colleagues you are looking. Approach retiring dentists in areas you like. Join ADA events and let people know your intentions. Many practices sell before they ever hit the market.
Initial assessment
When you find something interesting, request the Information Memorandum (IM). This document gives you the headline numbers: revenue, patient numbers, staff details, lease terms, and asking price.
At this stage, you are looking for deal-breakers, not perfection. Does the revenue justify the price? Is the lease long enough? Is the location right for you? If the answers are yes, it is worth digging deeper.
Due diligence
This is where you spend money to potentially save a fortune. Engage professionals who know dental practices:
An accountant verifies the financials, identifies any red flags, and calculates the "normalised" earnings— what the practice actually makes after removing the current owner's personal expenses and adjusting for market-rate wages.
A lawyer reviews the sale contract, lease assignment, and employment arrangements. Lease terms are particularly important—you need enough remaining term (ideally 10+ years including options) to make the investment worthwhile.
An equipment valuer assesses the condition and remaining life of chairs, X-rays, sterilisation equipment, and other assets. Old equipment means capital expenditure coming soon.
Due diligence typically costs $5,000-$15,000. It feels expensive, but it is insurance against buying problems.
Negotiation
Price is only one element. Other important terms include the vendor transition period (how long the selling dentist will stay to introduce you to patients), restraint of trade clauses (preventing them from setting up nearby), what assets are included versus excluded, and the settlement timeline.
A good transition matters more than most buyers realise. Patients are loyal to their dentist, not the building. A vendor who introduces you properly and endorses you to patients is worth paying for.
Exchange and settlement
Once terms are agreed, your lawyer prepares and exchanges contracts. The contract will typically be conditional on finance approval (14-21 days), satisfactory completion of due diligence, landlord approval for lease assignment, and staff agreeing to transfer.
On settlement day, funds transfer and you take possession. You will want to have staff meetings planned, patient communication ready to send, AHPRA notification prepared, insurance transferred, and system access sorted. The first week sets the tone for your ownership.
Common mistakes to avoid
Overpaying based on "potential" rather than actual performance. The seller's projections about what you could achieve are worthless—pay for what the practice actually does.
Underestimating working capital. You need cash reserves for the first three to six months while you find your feet. Do not put every dollar into the purchase price.
Skipping proper due diligence to beat other buyers. If something important surfaces later, you will regret the haste.
Not verifying the lease terms. A short lease with an uncooperative landlord can destroy your investment.
Typical costs
| Item | Typical Range |
|---|---|
| Deposit | 10-20% of purchase price |
| Legal fees | $5,000 – $15,000 |
| Accounting / due diligence | $3,000 – $8,000 |
| Equipment valuation | $1,000 – $3,000 |
| Working capital reserve | $50,000 – $100,000+ |
Common questions
Should I buy assets or shares?
Most dental practice sales are asset sales (goodwill, equipment, patient records). Share sales are less common and carry more risk because you inherit all liabilities. Your accountant can advise on tax implications for your situation.
What about the lease?
The lease is critical. Your purchase should be conditional on successful lease assignment from the landlord. Aim for at least 5-10 years remaining including options.
How do I value a practice?
See our detailed guide on dental practice valuation. In short, practices typically sell for 60-100% of annual revenue depending on profitability and other factors.
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