PRACTICE PURCHASE/SALE INFORMATION

The following list serves as a partial guideline for information a buyer should examine prior to making an offer to purchase a dental practice, and a seller should expect to provide a buyer to facilitate a sale.  Note that this may not be an all-inclusive list!

1.  The reason the doctor is selling and the doctor’s future plans.

2.  A complete copy of last three years' tax returns.

3.  End of the year Profit and Loss statements for the last three years, and a profit and loss statement for the current year up to the last completed quarter.  The seller should make notes as to which items are personal (those items will be deleted when a cash flow projection is prepared) and what is covered in broad category listings (for example, if the category ‘insurance’ is used, whether this covers malpractice insurance, workers comp, health insurance, disability insurance, general liability insurance, etc.)

4. Production/Collection numbers for each month of the current year.  Indicate in percentages how much of the practice’s income is made up of indemnity insurance, PPO insurance, HMO insurance, Denti-Cal, cash.

5.  A current accounts receivable aging report.

6.  A copy of all fee schedules.

7.  A list of HMO insurance plans accepted and a copy of the last 3 months’ capitation checks. 

8.  A list of the PPO plans accepted and Union plans and a copy of the fee schedule for each.

9.  A list of the number of new patients for the last 6 months and the source of the new patients (internal referral, advertising, yellow pages, etc.).  A description and cost of the advertising.

10.  A breakdown in production/collections between the selling doctor, any associate(s) and/or hygienist(s).

11.  A copy of last 12 months’ bank statements.

12.  A copy of the last year's 1099’s from Denti-cal and other major insurance companies.

13.  A copy of the lease.  The name, telephone number and fax number for the property manager or owner.  A list of all utilities paid and/or any other services used (janitorial, drinking water, etc.)

14.  A list of the employees, their current pay rate, how many hours they work per week, the date of their last raise and their benefits.  A copy of the W-2 statements and the quarterly DE-6 statements for the last year.  A statement as to what each employee’s future plans are likely to be.

15.  The name of the computer software, the date the software was last updated, and the transfer fee for the software (seller usually pays this item).

16.  A list of items that will be excluded from the sale.

17.  A complete office inventory