Published October 22, 2026
Pedro Oliveira, Founder & Principal, Renova Strategy
Investors are paying closer attention to professional practices: steady demand, repeat patients, and revenue that renews with every cleaning cycle. In a small dental practice, though, the most important asset is usually not the equipment or the lease. It is the dentist who owns it. If you are buying as an investor, that changes how you have to look at almost everything, starting with who is allowed to own what.
A buyer engaged us to find and evaluate an established general dental practice. The profile was typical for this kind of search: owner-operated, one or two dentists, and a loyal patient base built over many years. Real estate owned by the dentist was a plus, but a stable, transferable lease was acceptable.
The buyer is not a dentist. The plan was to take over the business side of a practice and keep the selling dentist treating patients for several more years, with a clinical successor in mind for the longer term.
That plan can work. It is also a very different acquisition from buying a service company or an agency, for three reasons: the law, the earnings, and the financing.
In Florida, only a licensed dentist, or a professional corporation or LLC made up of dentists, may employ dentists and dental hygienists. A non-dentist may not control treatment decisions, the use of dental equipment during patient care, patient records, pricing, advertising, office staff, or office hours. Contracts that cross that line are void, and the consequences for violations are serious. Many other states have similar rules.
What a non-dentist can do is provide management services. A separate management company can supply office space, staff administration, billing, marketing, technology, and financial services to a dentist-owned practice under a practice management agreement. Larger dental groups use versions of this model. The rules are specific, though. The agreement cannot restrict the dentist’s clinical judgment or control clinical staff, and the management fee has to reflect fair market value rather than a share of the practice’s profits. Non-compete agreements between a dentist and a non-dentist are restricted as well.
That changes what “buying a practice” means for an investor. The clinical practice stays owned by a licensed dentist, often the seller during the transition, and the investor’s return is shaped by what a compliant management arrangement can pay, not by the practice’s profit line. How to structure that for a given deal is a question for a healthcare transactions attorney, working alongside your CPA.
Small practices are usually presented like most owner-operated businesses: on seller’s discretionary earnings, with the owner’s pay added back to profit. For a dentist buying a practice to work in, that is fair. The buyer takes the seller’s place in the chair and earns the same income.
For an investor, it is not. A selling dentist who stays on has to be paid a market rate for the clinical work, typically a share of what he or she produces or collects. That pay is a real, recurring expense, not an add-back. Once it is in the model, along with a compliant management fee, the earnings available to an investor can be substantially lower than the listing figure.
That does not mean the practice is worth less. It has one market value. What changes is how the business fits an investor’s goals, and the analysis has to follow the investor’s plan rather than the listing.
Key-person risk follows directly. In a small practice, patients are loyal to their dentist. If the selling dentist leaves earlier than planned, revenue can follow them out the door. The deal has to be built so that staying is in the seller’s interest.
How the deal is paid for shapes what is possible. Lending programs, including SBA loans, have their own requirements, and they can address who may borrow, how the buyer is expected to be involved, and how long a seller may stay with the business after closing. Those requirements change, and so do the state rules around professional practices. A cash buyer avoids lender conditions but not the ownership rules, which apply either way.
If you are financing, talk to the loan officer early. Confirm that you are eligible and that your plan, including the seller’s role after closing, fits the program before you spend on diligence. If you are paying cash, confirm the structure with your attorney just as carefully. In both cases, check again before closing, because what was true when you started may not be true when you sign.
Some situations do not fit this model, and we say so early. If the selling dentist wants to leave at closing, an investor structure carries most of the risk and little of the protection. If the seller’s timeline and the buyer’s succession plan do not overlap, no price will fix it. If the structure your state requires leaves you without the control or returns you are counting on, a professional practice may not be the right vehicle for your capital. We would rather tell you that before a letter of intent than after you have paid for diligence.
If you are an investor, confirm the ownership structure with counsel before you search, and if you are financing, talk to the loan officer before you spend on diligence. Model the selling dentist as a paid professional, not an add-back. Choose the seller as carefully as you choose the practice.
If you are a dentist thinking about the next few years, selling and stepping away are not always the same event. Understand the structures buyers use in your state, and have your own attorney and CPA review any offer that asks you to stay on.
Renova Strategy provides buyer-side M&A advisory and business brokerage services. We coordinate with your attorney, CPA, and lender; we do not replace them.
Considering a professional practice as an investment? We can help you work through how the structure, the earnings, and the seller’s plans fit your goals. An initial consultation is free.