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I am considering buying a general dental practice where the lab expenses are only 4% of collections. What should laboratory expenses be?

Laboratory expenses should be approximately 8% of annual gross collections for an average, but well-run, fee-for-service general dental practice. A low percentage such as the 4% of annual gross revenues you asked about indicates that this seller probably has so many active patients in this practice that he is working too hard just to keep up with this high patient count and he does not take the time to offer more comprehensive services to those patients. This type of practice would be considered a "Diamond in the Rough" and would be considered a great buy if it is located in an area that you find desireable. There will be a lot of work that can be done in this practice (as a rule) for the purchaser with good case presentation skills.

On the other extreme, if you are looking at a general dental practice with laboratory expenses in the 10% to 12% range, you are most likely dealing with a lower active patient count whereby most (if not all) of the comprehensive dentisry has already been completed on those patients. This is usually a beautiful office and is visually desirable and located in a high-end demographic market, but you should approach this practice with great caution. It might be a good buy for a prosthodontist or someone who has completed some Panky or LVI courses, but the doctor taking over a practice like this will need extraordinary clinical and case presentation skills in order to make a living.

So remember, the lower the laboratory percentage, the greater the opportunity is as a practice acquisition; the higher the laboratory percentage, the greater the clinical and case presentation skills will be needed by the purchaser. This is just one of many considerations to review when considering acquiring a general dental practice. See Less

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"My AFTCO Analyst was very professional and excellent at explaining everything. The contracts were well written which caused much less involvement to be required from the dentists' attorneys. The transaction went smoothly because of my AFTCO Analyst."

Peter K. Pang, D.D.S.
Asheville, NC

"My AFTCO Analyst was very personal and attentive to the needs and negations of both parties. He was very instrumental in the process, I had a lot of questions in which he took his time to answer or if he did not know the answer would get back in contact with me very quickly after he found out. I would definitely recommend working with him. My first impression of my AFTCO Analyst was that he looked very young and he was just another broker trying to make a sale, that was not the case at all, he is very knowledgeable and guided me through the transition process better than some of these brokers who have way more years in the field. Thank you very much my AFTCO Analyst and I look forward to working with you again and buying more practices."

Martial I. LaVant, D.D.S.
Glendale, AZ

"My AFTCO Analyst was exceptionally talented, knowledgeable and proficient!"

Anthony J. Warren, D.D.S.
Alamogordo, NM

"My AFTCO Analyst seemed to be caring and looked out for me. What was impressive to me that she was available to me at any time, day or night, weekday or weekend. I enjoyed working with her and felt safe to put my practice in her hands."

Laudan A. Adkinson, D.M.D.
Chester, SC