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This Dentist Made $1.1M His First Year After Buying This Dental Practice
Description
📋 Free Download: Practice Evaluation Checklist https://practiceown.com/pdf
A dentist I worked with made $1.1 million in his first year as a practice owner, at an office his CPA and ChatGPT both told him not to buy. In this episode I go through the actual numbers for that practice (adjusted by about 10% and renamed to keep it confidential), give the same documents to ChatGPT to see what it says, and then walk through the report I put together for him and exactly why I told him to strongly consider it.
What we cover:
- The profit and loss statement: $1.2 million in collections, $1.1 million in expenses, and only $118,000 of net operating income
- After add-backs the seller was taking home roughly $175,000 to $200,000, about what an average associate makes
- The one number on the production report that a CPA, a bank and AI all glide past: 4,384 adult cleanings in a year
- What ChatGPT said when I gave it the same three documents: do not buy at the $936,000 asking price, and expect about $56,000 a year after the loan payment
- Why its six red flags (payroll, rent, revenue drifting down, five new patients a month, almost no perio, "dependent on restorative") do not hold up
- How I estimate active patients: about 800 per full-time hygienist, and cleanings counted at a nine month interval, which put this office at roughly 3,000 patients
- Past 2,200 to 2,400 patients you are in group practice territory, and this was one older doctor doing three hygiene checks an hour
- The seller collected $405 per patient per year against a median of $916 across the 500+ practices I have evaluated
- 47% of production came from hygiene, the 89th percentile, which means the dentist was producing only about $200 per patient
- Crowns 32% below average, fillings 45% below, zero endo, one implant and 45 extractions on 3,000 patients
- My cash flow model for the buyer: $115,000 conservative, about $700,000 moderate, $1.3 million strong. He landed at $1.1 million after debt service
- Why cutting expenses was the worst advice he got, and why a $134,000 a year loan payment works like a retirement contribution
💼 Work with me: I help dentists evaluate dental practices before they buy. Every practice I evaluate gets compared against my database of 500+ evaluations.
📬 Questions? Reach out directly: chris@practiceown.com
0:00 The Practice His CPA And ChatGPT Said Not To Buy
2:20 The Documents You Need To Evaluate A Practice
4:26 The Profit And Loss Statement And Production Report
8:35 Asking ChatGPT If I Should Buy This Practice
11:39 ChatGPT's Six Red Flags
15:07 My Evaluation Report And The Real Patient Count
21:17 Collections Per Patient And Production Analysis
28:36 Cash Flow Modeling And Wh