Blind Spots Are Silent. Until Closing. Then They Detonate.

Most practice owners first meet their blind spots in dental practice due diligence. That’s the worst possible place to meet them. 

A blind spot is a fact about your practice that a buyer will find and you haven’t dealt with. It doesn’t hurt day to day. The schedule fills and the rent check never changes. Then someone else looks at your practice for the first time. 

Start With What’s True

A buyer sees what might stop working after you leave. And they look after the letter of intent, which usually comes with exclusivity. By then, your other buyers have moved on. So whatever they find, you negotiate without alternatives. 

The Arithmetic of a Silent Lease

Take an illustrative practice in 3,000 square feet at $24 a foot, or $72,000 a year. Three years remain, with no renewal option. Assignment requires the landlord’s consent. 

Then you sell. The buyer’s lender wants a lease as long as the loan, often ten years. As a result, the landlord now holds a vote in your sale. He offers ten years at $28 a foot. 

That’s $12,000 more a year, or $120,000 over the lease. Usually the seller absorbs it, through a lower price or a longer work-back. 

Five years earlier, the landlord worried about an empty building. You had the leverage. You just didn’t need anything yet. 

Where Blind Spots Hide in Dental Practice Due Diligence

The lease. Remaining term, options, and assignment. 

Equipment liens. The buyer’s lender wants every lien cleared, so financed equipment gets paid off at closing. 

One key person. The office manager who holds the practice in her head. 

Credentialing. Insurance contracts tied to your name may not transfer. 

You. If you produce most of the dentistry, the buyer [prices your absence](link to Issue #1). And if the practice needs you daily, you may own [a job with equipment](link to Issue #2). 

Where This Model Breaks

Not every blind spot waits for a sale. A key employee can quit next month. In addition, buy-ins, disability, and death all force a hard look at your practice. That’s why this is ownership advice, not just sale advice. 

The Blind Spot Test

First, how many years remain on your lease, and can it be assigned? Second, what do you still owe on financed equipment? Third, whose departure would hurt most, besides yours? 

That’s the core of dental practice due diligence: fixing a blind spot now costs a conversation, while fixing it at closing costs leverage. 

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David Darab, DDS, MS, MBA, CEPA
The Cash Flow Surgeon™ | darabadvisors.com