Industry guide for buyers
Goodwill, chairs and imaging, sterilisation, fit-out, associates and handover — every dental-specific line to budget before you buy.
Earnings-based or replication-cost pricing changes your due diligence.
Plan a three-to-five-year replacement schedule from the asset register.
Their willingness to stay matters as much as the patient list.
Equipment and freehold may be financed separately from goodwill.
Quick answer: A dental practice acquisition budget should cover goodwill, the condition and replacement cost of chairs, imaging and sterilisation equipment, any fit-out or compliance upgrades, patient records and software transfer, stock, staff entitlements, associate retention, professional fees, working capital and a handover buffer. Several of these may be financed separately, subject to lender assessment.
This guide covers the costs specific to dentistry. For the general cash picture of any business purchase — stock at settlement, day-one working capital, duty and tax — see our guide to how much cash you really need to buy a business.
Start with the worksheet. Each line is explained below it.
| Budget line | Own cash or may be fundable? |
|---|---|
| Goodwill | May be fundable via acquisition finance, subject to assessment |
| Chairs, imaging, sterilisation equipment | May be fundable via equipment finance |
| Fit-out and compliance upgrades | Depends on lender and structure |
| Freehold (if buying) | May be fundable via a commercial property loan |
| Stock and consumables | Usually own cash |
| Software and records transfer | Usually own cash |
| Professional fees | Usually own cash |
| Working capital and buffer | Own cash or a working-capital facility |
Before filling it in, work out how the practice is being priced, because that changes where your due diligence effort goes.
Many established practices are priced on earnings, using EBITDA. Others — especially newer or under-used practices — are priced on what it would cost to set up the same fit-out and equipment from scratch. An earnings-priced practice needs close review of patient numbers and the selling dentist's role. A replication-cost practice needs close review of the equipment and fit-out you are effectively buying, and a realistic plan to build patient numbers.
Goodwill reflects the patient base and earnings. Before accepting the figure, review active patient numbers, recall and hygiene appointments, new-patient trends, fee schedules, health-fund preferred-provider arrangements and how much revenue depends on the selling dentist personally. A practice where most high-value treatment is done by the seller carries more handover risk than one where associates and hygienists drive a large share of the book.
Dental equipment is expensive and has a working life. Ask for an asset register covering chairs, OPG and CBCT imaging, autoclaves and sterilisation equipment, CAD/CAM units and compressors — with ages and service history. Build a three-to-five-year replacement schedule into your budget so a major replacement soon after settlement isn't a surprise.
Equipment may be funded through equipment finance, which can help preserve cash, subject to lender assessment. Check whether any existing equipment is already under finance or lease before you agree what is included.
Check whether the sterilisation room, surgeries and accessibility meet current standards and your own clinical requirements. Upgrades you will need soon after settlement belong in the budget now, not in year two. Ask whether any work has been deferred in the lead-up to sale.
Review lease term, options, rent reviews, make-good and assignment consent. Some sales offer the business on its own or with the option to buy the premises. Buying the freehold changes the size of the transaction and the funding structure, since the property may be financed separately from the business — see buying a business and its premises.
Budget for transferring the practice management software, imaging archives and patient records, and confirm how records will be handled lawfully on transfer. Licence transfer fees and data migration can add cost and time.
Staff entitlements may transfer with the business — check how they are treated in the contract and whether the price is adjusted for them. If associate dentists or hygienists produce a large share of revenue, their willingness to stay matters as much as the patient list. Factor in wage increases: modern award rates rose 4.75% from 1 July 2026.
Consumables are often added to the price at valuation on settlement. Confirm whether the price is "plus stock" and budget for it separately.
Allow for legal, accounting, valuation and any equipment inspection fees. These are usually paid from your own cash, so they belong in the plan from the start.
Payment plans, health-fund claims and a possible dip in appointments during the handover all affect cash flow. A working capital allowance and buffer reduce pressure in the first months, when you are also learning the practice's systems and team.
Patients choose a dentist as much as a practice, so the handover period carries real cost and real risk. Agree the details before you finalise the budget:
Any cost that comes out of these answers — paying the seller to stay, extra hygienist hours, recall campaigns — belongs in the working capital and buffer line of your worksheet.
Most Australian dental practices are bought by dentists, but corporate groups are also active. Corporate transactions can include part of the price paid after settlement, subject to handover or performance terms, and may require the dentist to stay for several years. These are contract terms to review carefully with your solicitor and accountant, because they affect both risk and cash flow.
For the factors lenders commonly assess in any acquisition, see our due-diligence guide, and model repayments with our acquisition calculator.
We look at the deal structure early, so finance is considered before you commit to a price or settlement date.
Acquisition, equipment and working-capital options laid out side by side, so you can see how each part of the purchase could be funded.
Our founder's background on the lending side of major Australian banks shapes how we help you prepare the evidence lenders look for.
Budget for goodwill, equipment condition and replacement, sterilisation and fit-out upgrades, patient records and software transfer, stock, staff entitlements, professional fees, working capital and a handover buffer. Listing each line separately shows which costs need your own cash and which may be financed.
Often, yes. Chairs, imaging and sterilisation equipment may be funded through equipment finance, subject to lender assessment. Separating equipment from the goodwill purchase can help keep more cash available for working capital, but the right structure depends on the deal and your circumstances.
Dental practices are commonly valued on earnings, using EBITDA, adjusted for factors such as patient numbers, hygiene and recall activity, equipment condition, lease terms and dependence on the selling dentist. Some newer practices are priced on replication cost instead. An independent valuation helps you test the asking price.
Corporate deals may pay part of the price after settlement, depending on handover or performance terms, and often require the dentist to keep working for a period. These terms affect risk and cash flow, so review them carefully with your solicitor and accountant.
Ask for an asset register with the age, condition and service history of chairs, imaging, autoclaves and other major items. Estimate replacement timing and cost over the next three to five years, and include upgrades you will need soon after settlement in your budget.
Some practices are offered with the option to buy the freehold. Buying both changes the size of the transaction and the funding structure, since the property may be financed separately from the business. Lender assessment and requirements differ for each, so consider both parts early.
Considering buying a business? Speak with Probiz Finance about your finance options before committing to the transaction.
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This information is general in nature only and does not take into account your objectives, financial situation or needs. Consider your circumstances and seek appropriate professional advice before making a financial decision.
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