By Director and Practice Integration Advisor Thomas Bodin, CFA, CFP®, TPCP®
The purchase of a practice is an exciting, career-defining moment. The potential is significant, the excitement is high, and the questions and concerns are numerous.
At its best, a practice transition—particularly between two clinicians—should result in a true win-win outcome. The seller captures appropriate market value while seeing their legacy continue within the patient base and community. The buyer secures a permanent professional home and begins to benefit from the financial and professional rewards of ownership.
This Perfect Scenario Is Not Always the Case.
Having worked with many new practice owners over the years, we have seen several common mistakes that can materially impact both the financial success of the practice and the owner’s personal experience. These are not typically the result of poor intent, but rather a lack of preparation for the realities of ownership and the financial dynamics of a practice. The following are some key questions to consider before you proceed.
Is Ownership the Right Path?
Before the purchase, one of the most important questions to answer is whether you are truly ready to be a business owner. While dental service organizations (DSO) and management service organization (MSO) models and long-term associate tracks have become more common across both dental and medical professions, there remains an underlying assumption that clinicians will eventually own a practice.
Ownership, however, introduces a very different set of responsibilities. You are no longer solely accountable for patient care—you are liable for the operations of the business, the performance of your team, financial decision-making, and the long-term sustainability of the practice.
For clinicians who enjoy the associate model based upon focusing on patient care and leaving operational concerns at the office, this transition can be more challenging than expected. Without a clear understanding of what ownership entails, an opportunity can begin to feel like a burden.
Are Your Eyes Bigger Than Your Appetite?
Closely related to this is the tendency for new owners to overreach in their initial acquisition. Bigger is not always better, particularly early in your ownership journey. Practice value is directly tied to financial performance, and larger practices often appear more attractive on paper. It is critical to understand what level of clinical production you are stepping into.
If a selling doctor has been producing at a level significantly higher than your current pace, you may be acquiring a volume of patient flow that you are not yet prepared to support. This can lead to declining collections while still carrying the debt burden associated with the original valuation. In many cases, purchasing a practice that fits your current capacity is often more sustainable and financially wise than trying to keep up with production levels you can't manage.
Do You Have a Goodwill Transition Strategy?
Approximately 70% to 80% of a practice’s value is tied to goodwill. This represents the patient relationships, reputation, and continuity of care built by the selling clinician. The successful transfer of those values requires a coordinated and intentional transition plan.
Whether the seller exits immediately or remains involved for a period of time, communication with patients and alignment with staff are critical. Without this structure, patient attrition can occur quickly, directly impacting the cash flow that supports the purchase.
Do You Understand the Numbers and the “Why” Behind Them?
Another frequent misstep is overlooking the need to fully understand the practice’s financials—not just the figures themselves, but the reasons driving them. Most buyers will review production reports, collections, profit and loss statements, and tax returns. However, the quality and structure of that data is often overlooked. Many practices operate with financial statements that are not organized in a way that allows for meaningful analysis.
Before relying on this information, it often needs to be cleaned and restructured to reflect how a practice actually operates. This includes separating major clinical cost categories—such as staffing, lab expenses, clinical supplies, and facility costs—from back-office expenses like administrative support, technology, and general overhead. Without this level of clarity, it becomes difficult to identify where the practice is performing well and where adjustments are needed. As an owner, your ability to understand and manage these financial drivers will ultimately dictate your personal financial outcomes. It is often appropriate to involve professionals in this process to ensure the data is translated into actionable insight.
If Changes Are Needed, Do You Have a Plan?
Many new owners feel an immediate need to implement changes. There is often a clear vision for how the practice should look, operate, and grow. While this vision is important, the timing and sequencing of change are equally critical.
One of the most effective initial strategies as a new owner is often to pause before making significant adjustments. Taking time to operate the practice in its current state allows you to observe workflows, understand team dynamics, and identify what is truly working versus what needs to evolve.
This period of observation can be structured through a gap analysis, evaluating the current state of the practice relative to your desired future state. By identifying the gap between the two, you can prioritize changes in a way that is manageable for your team, sustainable for your cash flow, and less disruptive to the patient experience. Thoughtful, phased implementation tends to produce far better outcomes than immediate, sweeping change.
Do You Have the Right Team?
Finally, one of the most overlooked aspects of ownership is the need for a coordinated advisory team. As a practice owner, you are effectively the CEO of your business, and successful CEOs do not operate in isolation. The quality of your decision-making is directly influenced by the quality of the team supporting you. This includes accountants and bookkeeping professionals who understand the nuances of clinical practices, advisors who can integrate practice performance and opportunities with personal financial planning, and legal professionals who are experienced in health care and business ownership. Without this structure, owners often find themselves reacting to issues rather than proactively planning for opportunities.
Conclusion
Purchasing a practice is one of the most meaningful transitions in a clinician’s career. When approached thoughtfully, it creates significant opportunities for both professional fulfillment and long-term wealth creation. By avoiding common oversights—misaligned expectations, overextending on acquisition, failing to protect goodwill, lacking financial clarity, and implementing change too quickly—you can position yourself to fully realize the benefits that ownership can provide.
About the author
Thomas provides comprehensive financial advisory services to dental and medical offices, including tax, pension, and retirement planning. He leverages the practical application of his talents into designing wealth-generating and wealth-preservation strategies tailored to his clients’ individual needs and goals.
The information provided is educational and general in nature and is not intended to be, nor should it be construed as, specific advice. The content does not purport to present a complete picture, but Focus believes the information is representative of issues and needs facing some clients. This reflects the opinions of Focus or its representatives, may contain forward-looking statements, and presents information that may change. Nothing contained in this communication may be relied upon as a guarantee, promise, assurance, or representation as to the future. Services are offered through Focus Partners Wealth, LLC (“Focus”), an SEC registered investment adviser with offices throughout the country. Registration with the SEC does not imply a certain level of skill or training and does not imply that the SEC has endorsed or approved the qualifications of Focus or its representatives. Focus has been part of the Focus Financial Partners partnership since 2011. ©2026 Focus Financial Partners, LLC. All rights reserved. RO-26-5477507