Frequently Asked Questions About Selling or Buying a Dental Practice
Honest answers from Karl Frye on the questions Arizona and California dentists ask most often.
Selling Your Practice
How long does it take to sell a dental practice?+
Most dental practices sell within 3 to 9 months from the time they’re listed. Timeline depends on practice size, asking price, location, and buyer demand in your market. We will give you an honest timeline estimate based on current conditions.
What is my dental practice worth?+
Practice value is determined by multiple factors including annual collections, overhead percentage, net income, patient count, equipment condition, and lease terms. Frye Practice Sales uses a 3-method valuation approach (collections-based, income-based, and comparable sales) to arrive at a fair market value.
What does a dental practice broker charge?+
Frye Practice Sales charges a commission based on the final sale price. The exact percentage depends on the deal size and complexity. We will discuss fees transparently during your initial consultation. There are no upfront fees.
Do I need to tell my staff I’m selling?+
No, not initially. Confidentiality is critical in practice sales. Premature disclosure can cause staff anxiety, patient attrition, and negotiating disadvantage. We will advise you on when and how to communicate with your team.
What happens to my patients after I sell?+
Your patients continue receiving care at the same location with the new owner. Most transitions include an overlap period where you introduce the new dentist, which helps with patient retention.
Should I sell to a DSO or a private buyer?+
It depends on your priorities. DSOs typically offer higher multiples and faster closes but may require you to stay on for 2-3 years. Private buyers offer more flexibility in deal structure and transition. We will help you evaluate both options for your specific situation.
What financial documents do I need to prepare?+
At minimum, 3 years of tax returns, profit and loss statements, and a current overhead breakdown. We will send you a detailed Practice Information Sheet that captures everything needed for valuation and prospectus preparation.
Can I sell my practice if I still owe on it?+
Yes. Outstanding loans, equipment leases, and building debt are factored into the transaction structure. Karl’s banking background is particularly valuable here, as he understands debt payoff, lender requirements, and closing fund flows.
How do I prepare my practice for sale?+
Start by getting your financials in order: 3 years of P&Ls, current overhead breakdown, and tax returns. Address any deferred maintenance on equipment or facilities. Document your staff roles, patient flow, and operating procedures. We will guide you through a preparation checklist during your initial consultation.
Buying a Practice
How do I qualify to buy a dental practice?+
You’ll need a valid dental license (or be in the process of obtaining one for the state), proof of financing or pre-approval, and a completed buyer intake form. We will walk you through the qualification process.
What financing options are available for dental practice purchases?+
The most common route is an SBA 7(a) loan, which typically covers 80-90% of the purchase price. Some sellers offer financing as part of the deal structure. Karl’s banking background helps buyers navigate lender requirements.
How long does it take to buy a dental practice?+
From initial offer to closing, the typical timeline is 60-120 days. This includes due diligence, financing, lease transfer, and legal documentation.
Can I buy a practice in a state where I don’t have a license yet?+
You can begin the process, but you’ll need to have your license before closing. Karl can help you plan the timeline so licensing and closing align.
What should I look for when evaluating a practice?+
Key factors include 3-year collections trend, overhead percentage, patient retention rate, equipment condition, lease terms, and staff stability. Our prospectuses cover all of these metrics.
The Process
What is a dental practice prospectus?+
A prospectus, also called a Confidential Information Memorandum (CIM), is a professional document that presents a dental practice to qualified buyers. It includes a practice overview, financial summary, operations details, facility and equipment information, growth opportunities, and deal terms. It’s the primary document that markets your practice.
What is the difference between an asset sale and a stock sale?+
In an asset sale, the buyer purchases specific assets of the practice (equipment, patient records, goodwill) rather than the legal entity. In a stock sale, the buyer purchases the ownership interest in the business entity itself. Most dental practice sales are structured as asset sales. We will advise on which structure makes sense for your situation.
How does the NDA process work?+
Before any confidential practice information is shared, both parties sign a Mutual Non-Disclosure Agreement. This protects the seller’s identity, financial details, and practice information from being disclosed. NDAs are sent via electronic signature platform and typically signed within 24-48 hours.
What role does Karl play during due diligence?+
We coordinate between the buyer, seller, attorneys, CPAs, and lenders throughout the due diligence period. He ensures that document requests are fulfilled promptly, that timelines are met, and that any issues that arise are addressed before they threaten the deal.
Arizona Market
What makes the Arizona dental market unique?+
Arizona has been one of the fastest-growing states for dental practice transitions for the past decade. Strong population growth (especially Phoenix metro and Tucson), a steady inflow of dentists relocating from higher-cost states, and lighter regulatory friction than California make Arizona one of the most active markets in the Southwest. That translates to deeper buyer pools and faster transactions for sellers.
What regions of Arizona does Frye Practice Sales serve?+
We cover the entire state, with the highest deal volume in Phoenix metro (Scottsdale, Mesa, Gilbert, Chandler, Glendale, Peoria, Surprise, Goodyear), Tucson, Flagstaff, and Yuma. Frye Practice Sales is headquartered in Scottsdale, so Arizona is the firm’s home market.
What does an Arizona dental practice typically sell for?+
Valuations vary based on collections, profitability, location, and practice type, but well-run general practices typically transact in the $400K to $2M range. Multi-location operations and specialty practices (oral surgery, pediatric, orthodontics) trade higher. Frye Practice Sales provides a valuation as the first step in any seller engagement.
How active are DSOs in Arizona right now?+
DSO acquisition activity in Arizona is strong, particularly in Phoenix metro. For sellers, that means more potential buyers and often higher offers. DSO deals come with structural trade-offs (employment terms, earnouts, operational changes), which is where having an experienced broker matters. We routinely run side-by-side comparisons of private buyer offers vs. DSO offers so you can decide what fits.
California Market
Are California dental practices more expensive than Arizona practices?+
Generally yes. California’s higher cost of living, larger patient pools, and stronger fee schedules drive higher practice valuations. However, the fundamentals of a good deal are the same: solid collections, manageable overhead, and a fair price relative to earnings.
What regions of California does Frye Practice Sales serve?+
We serve all major California markets: Los Angeles, San Diego, San Francisco Bay Area, Orange County, Inland Empire, Sacramento, and Central Valley.
How does DSO activity affect California dental practice sales?+
DSO activity in California is lower than the national average, but still attractive to certain partnership-model DSOs. For sellers, this means several quality offers from experienced DSO buyers and often higher headline prices. However, DSO deals come with structural trade-offs: employment agreements, earnouts, and operational changes. Karl routinely runs side-by-side comparisons against private-buyer offers so sellers can see which path fits their goals.
Still have questions?
Karl personally answers every inquiry. Most questions get a real answer the same day.
