DSO RESOURCE GUIDE

Factors That Made Me Walk Away From Dental Practices: Part 1 – Financial & Valuation Killers

buying a dental practice

Posted By: GroupDentistryNow February 4, 2026

By Dr. Kartik Antani, DMD

When I first started looking at dental practices to buy, a mentor told me three things I’ll never forget:

1. Learn to walk away.
2. Look at a lot of practices before choosing one.
3. Find the flaws first – then decide whether they’re worth fixing.

At the time, I didn’t realize how important those three rules would become. But once you start evaluating real practices, you understand quickly:

Most deals fall apart long before you ever step inside the building. They die in the numbers.

So let me walk you through the biggest financial red flags I’ve seen – the same ones that made me close the folder, thank the broker, and move on.

Think of this as the conversation I wish someone had with me earlier.

1. The Price Didn’t Match Reality

Here’s something no one tells you: Sellers often price their practice based on emotion, not economics.

Many are thinking about retirement, their legacy, or “what the practice used to produce.” But as a buyer, you’re thinking about one thing:

Can this practice support me?

I’ve walked away when I saw:

  • A $900K asking price on a practice making $200K in true profit
  • Brokers stacking “adjusted EBITDA” with unrealistic add-backs
  • Valuations based on the seller’s best year, not the average reality

If I had to convince myself the price might make sense, I already knew it didn’t.

2. The Profit Looked Good on Paper… but Not in Real Life

A practice can collect $1M and still be a terrible buy.

I’ve passed because:

  • Overhead was 72–78% and the seller insisted “that’s normal”
  • Staff costs were so high I’d basically work for free the first year
  • Marketing spend was inconsistent – $10K one month, $500 the next
  • Add-backs were more imaginative than factual

If profitability required “optimism,” I moved on.

3. Collections Were Declining or Unpredictable

Consistency is everything in acquisitions.

When I see numbers bouncing up and down, here’s what I think:

If the seller can’t stabilize the practice they know best, how am I supposed to?

I walked away when:

  • Revenue declined for three years straight
  • Hygiene shrank with no explanation
  • Adjustments ballooned suddenly (“We wrote off some old stuff…”)
  • Monthly swings of 20–30% made the practice feel chaotic

If the seller couldn’t explain why the numbers looked the way they did, I didn’t spend more time on it.

4. PPO Write-Offs Were Quietly Killing the Dental Practice

This one is sneaky.

Some practices look busy until you calculate the collection percentage.

I’ve said no when:

  • Collection rate was under 60%
  • They were in-network with 15+ PPOs
  • Fee schedules were so low I’d lose money doing crowns
  • The seller shrugged and said, “We’ve always done it this way”

If working harder meant earning less, it wasn’t a deal worth pursuing.

5. The Financials Were Too Messy to Trust

Messy books are a flashing red warning sign.

Here’s what made me walk:

  • Missing months in the P&L
  • Payroll numbers that simply didn’t add up
  • Personal expenses hidden in business categories
  • Production reports that didn’t match bank deposits
  • Sellers saying, “My CPA will explain it”

If I needed forensic accounting to understand the financials, I wasn’t buying it.

6. The Owner’s Production Was Impossible to Replace

This one catches a lot of buyers off guard.

A practice might look great but only because the owner is working at an unsustainable pace.

I’ve passed when:

  • The doctor worked 5–6 days a week
  • They performed specialized procedures I wasn’t going to replicate
  • Their production mimicked two full-time associates
  • Hygiene underperformed but the doctor overproduced to compensate

If the practice would shrink the moment I stepped in with a normal schedule, the risk wasn’t worth it.

The Bottom Line I Learned After Evaluating Dozens of Dental Practices

The practices worth buying – the ones that sell fast and at strong valuations all share three things:

✔ Clean, believable financials
✔ Consistent profit year over year
✔ Replaceable production that doesn’t require superhuman output

Everything else is negotiable.
These three are not.

Written by Dr. Kartik Antani. Dr. Antani is a practice owner in New Mexico. His goal is to initiate and sustain a meaningful dialogue about the growth from small practices to small groups, addressing both clinical and administrative perspectives. He can be further reached at kantani@gmail.com or 848.565. 5070.

Read Kartik’s other articles:

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