Buying a practice: diligence past the chart count
A vendor's cash flow statement answers almost none of the questions that decide whether a purchase works. We rebuild the numbers before you price: how much production sits in the selling dentist's own hands and leaves with them, what share of revenue is recurring hygiene versus one-off treatment, how active the active-patient count really is, and what the team costs once accrued vacation and long-tenure termination exposure are on the table. Sticker price is the last number we look at; per-chart and per-operatory value only mean something after the recast.
The lease gets equal weight. GTA practices increasingly sit in buildings with redevelopment potential, and a demolition clause or a short remaining term can erase the value of everything else in the deal. We read the lease as a financial document, then recast vendor earnings to what the practice looks like under your ownership, with an associate's percentage or your own clinical days priced in.
Financing: the package wins the terms
Every major Canadian bank runs a health-care lending team, and dental cash flow is among their favourite collateral. That does not mean the first term sheet is the right one. Walla Assaf spent years in banking and corporate finance before founding Tauro, so our Business Financing Advisory work builds the file a credit committee actually wants: recast earnings, debt service coverage with honest room in it, projections tied to chair capacity rather than hope, and covenants you can live with after the equipment order. We also run the process competitively where it helps: two or three health-care lending teams quoting against the same package routinely improves rate, amortization or covenant terms.
Lenders also want statements with a CPA's name on them. Compilation engagements for the corporation slot into the same package, so the bank reads one coherent story instead of a folder of PDFs.
Associate buy-ins without the fallout
Most buy-in disputes are priced in at the start, when nobody wrote down how the value would be set. We fix the method early: an agreed valuation approach, tranches tied to dates or production milestones, and a shareholder agreement that answers disability, death, exit and patient non-solicitation before any of them happens, drafted with your lawyer.
Structure matters because DPC voting shares can only be held by dentists. A true partnership means the associate buys shares of the DPC; the alternative is a cost-sharing arrangement where two professional corporations split facility and staff costs while billing separately. The right answer depends on succession intent, and the financing for either side is a bankable file we know how to build.
Operatory math before location math
Growth decisions in dentistry come in a specific order, because capacity is physical. The cheapest production is usually hiding in rooms and hours you already pay for:
| The move | What the model must show |
|---|---|
| Add an operatory | Incremental production covers equipment carrying cost and added hygiene payroll, and the recall backlog actually fills the room |
| Extend hours instead | Same chairs, marginal staffing only; often the cheapest capacity available |
| Second location | Contribution survives duplicated rent, admin and an associate's percentage, with your management time priced honestly |
| Bring specialty in-house | Referred production kept exceeds the financing and training cost of CBCT, implant or aligner capability, case by case |
We build these models with your real numbers and keep them alive, so when the equipment rep quotes a quarter-end discount or a nearby practice comes up for sale, the answer takes days, not a season.
The monthly rhythm
The Fractional CFO engagement is a standing cadence, not a one-off model. Each month we maintain a rolling 13-week cash flow, track covenant headroom while acquisition or equipment debt is outstanding, and review a short scorecard: production per operatory-day, collection ratio, hygiene reappointment, overhead percentage, and progress against whichever growth move is live. Twice a year we reforecast the full year so the instalment schedule, the draw plan and the bank are all tracking the same numbers.
Our brand line is literal here. Your accountant files your taxes; we help you decide whether the next dollar goes to a fourth operatory, a second location or the loan principal, and we bring the lender along with the decision.
