Dental Practice Due Diligence Checklist for Buyers
Thorough due diligence protects you from costly surprises when buying a dental practice. This comprehensive checklist ensures you investigate all critical aspects before closing the deal.
Financial Due Diligence
- Review 3-5 years tax returns
- Analyze monthly P&L trends
- Verify collections vs. production
- Examine overhead ratios
- Check accounts receivable aging
- Review equipment depreciation
- Analyze new patient flow
- Verify patient recall rates
Patient Base Analysis
- Active patient count verification
- Demographic breakdown
- Patient retention rates
- New patient sources
- Case acceptance rates
- Treatment plan backlog
- Patient concentration (top 20 patients)
Operational Review
- Staff roles and responsibilities
- Employee contracts and benefits
- Scheduling efficiency
- Collections procedures
- Marketing systems
- Technology assessment
- Inventory management
Legal and Compliance
- License verification
- Permit transfers
- Insurance contracts
- Lease terms and assignability
- OSHA compliance
- HIPAA compliance
- Pending litigation
- Regulatory compliance history
Red Flags to Watch For
- Declining revenue trend
- High staff turnover
- Concentrated patient base
- Unresolved compliance issues
- Disputed equipment ownership
- Unassignable lease
- Poor collection rates
Conclusion
Due diligence typically takes 30-60 days. Hire qualified professionals (CPA, attorney) to assist with this critical phase.
Get Due Diligence Support
DentalBridge provides buyer representation including due diligence assistance to protect your investment.