Guide

The 47-step pre-sale checklist every dental practice owner should run before a buyer sees their numbers

The specific, boring, high-leverage operational housekeeping that separates a 5x multiple from a 7x multiple.

By Blane Jackson, DDS/MBA · Former owner of 8 practices · Updated April 2026

Most of the work that decides a practice's sale price is not strategic. It is operational housekeeping that nobody is excited to do. The items below are unglamorous. They are also the items that distinguish a buyer's quality-of-earnings adjustment from a buyer's valuation bump.

Run this list ninety days before you engage a broker. Everything that is still red at the end of those ninety days becomes a diligence risk. Everything that is green is a diligence non-event, which is exactly what you want.

Financial (items 1–12)

  1. Accrual-basis books, reconciled monthly, for the trailing 36 months.
  2. Dental-specific chart of accounts — not the QuickBooks default.
  3. Doctor compensation broken out separately from operating expenses.
  4. Owner personal expenses run through the practice identified and quantified (add-backs).
  5. Related-party transactions disclosed and documented (lab, real estate, management entity).
  6. Depreciation schedule current and tied out to the tax return.
  7. Inventory of equipment with serial numbers, purchase dates, and depreciation status.
  8. Trailing 12-month P&L with month-by-month detail.
  9. Monthly AR aging for the last 18 months.
  10. Collections percentage (actual dollars collected vs. billed) calculated and trending.
  11. Cash on hand and working capital needs documented.
  12. Bank statements and merchant processing reports ready for diligence.

Revenue and production (items 13–22)

  1. Production report by provider, by procedure code, monthly, trailing 24 months.
  2. New-patient count by month, with referral source attribution.
  3. Hygiene department production per hour, per hygienist.
  4. Hygiene reappointment percentage (target: 90 percent or higher).
  5. Case acceptance rate for presented treatment.
  6. Payer mix with aging, FFS vs. PPO vs. Medicaid percentages.
  7. Top 10 PPO plans ranked by production, with contracted fee schedules documented.
  8. Medicaid participation status clean, with no outstanding audit issues.
  9. Cancellation and no-show rates by provider.
  10. Recall system documented and tracked (patients due/overdue).

Legal and contracts (items 23–33)

  1. Practice lease reviewed. Remaining term, rent escalations, assignability, consent requirements.
  2. Landlord relationship assessed for closing cooperation. (Landlord consent can kill deals.)
  3. Associate and staff employment agreements current and signed.
  4. Non-compete agreements with associates in place and enforceable in your state.
  5. PPO and insurance contracts current, assignable, and documented.
  6. HIPAA compliance documented. BAA agreements in place with every vendor.
  7. OSHA compliance documented. Most recent inspection results and any corrective actions.
  8. State dental board record clean. Any complaints or actions resolved and documented.
  9. Malpractice insurance claims-made vs. occurrence confirmed. Tail coverage planning done.
  10. Corporate governance clean. Minutes, resolutions, registered agent current.
  11. Any outstanding litigation disclosed and documented (even patient complaints that did not become suits).

Human resources (items 34–40)

  1. Personnel files complete. Signed handbook acknowledgment, I-9, W-4, direct deposit authorization.
  2. Compensation structure documented. Hourly vs. salary, bonus formulas, benefits accrual.
  3. PTO policy documented and current balances reconciled.
  4. Wage and hour compliance reviewed (especially overtime for staff classified as salaried).
  5. Employee retention risk assessed. Who leaves if you sell? Document conversations.
  6. Key employee retention agreements in place. Bonus contingent on 12-month post-close tenure.
  7. Payroll vendor relationship transferable or replaceable.

Clinical and operational (items 41–47)

  1. Practice management software current and data extractable. If Dentrix G4 or Eaglesoft 17, upgrade before the sale process.
  2. Imaging system vendor relationship transferable.
  3. Patient chart completeness sampled and verified. SOAP notes current, signed, and backed up.
  4. Referral relationships with specialists documented. Warm handoff plan for post-close.
  5. Website, phone numbers, Google Business Profile, and all digital assets owned by the practice entity (not personally).
  6. Lab vendor relationships reviewed and transferable.
  7. Supply ordering consolidated and under practice entity name.
Every yellow or red item on this list becomes a line item in the buyer's diligence report. Every line item in the diligence report becomes a negotiation point on price, terms, or holdback. Do the work before the diligence, not during it.

Priority order if you are short on time

If you have less than 90 days before the process starts, triage in this order:

  1. Financial items (1–12): Nothing else matters if the books are not clean.
  2. Legal items (23–33): Landlord consent and non-competes are the two items that kill deals in the last week before close.
  3. Revenue items (13–22): You cannot fix these quickly but you can document them. Documentation alone moves you forward.
  4. HR items (34–40): Lower priority only because fewer deals fail here, but still meaningful.
  5. Clinical and operational (41–47): The cleanup buyers forgive if the rest is clean.

By Blane Jackson, DDS/MBA. Related: the five-year exit timeline, practice valuation basics, how to read a DSO offer.

Other guides

Educational only. This site reflects general industry information and the author's personal experience as a practicing dentist who has bought and sold practices. It is not legal, tax, or financial advice. Every transaction is unique — engage a CPA, attorney, and qualified broker familiar with your jurisdiction before acting on any guidance here. We have no commercial relationship with any DSO unless explicitly disclosed on the relevant page.