Due Diligence in a Practice Sale: What Buyers Ask For and When

Due diligence in a practice sale is the stage where the buyer checks everything it has been told before it commits to closing. It usually starts after you sign a letter of intent, and it covers your financials, production, staff, lease, equipment, compliance and patient or client data. Most of what buyers ask for is predictable, which means most of it can be prepared in advance.

It’s also the stage owners worry about most: how intrusive it will be, who will see what, and how painful it gets. This guide explains, for veterinary and optometry owners, what buyers ask for and in what order, who sees it, and what slows a deal down.

When due diligence starts

Information is shared in stages, so the most sensitive details come last, when both sides are committed.

1. Before an introduction: the basics. With Right Fit Capital, that’s the size of your practice, property, goals and timing. No financials.
2. After a first conversation: if you both want to go further, the buyer usually asks for 2 to 3 years of P&Ls and a practice overview, shared confidentially, to decide whether to make an offer.
3. After the letter of intent: full due diligence. You’ve agreed the main terms, usually with a period of exclusivity, and the buyer now verifies the details while the attorneys draft the agreements.
4. Before closing: final confirmations, employee offers, and any third-party consents, such as the landlord’s.

What buyers ask for

Requests vary by buyer and by practice, but most fall into the same areas.

Area	What buyers usually ask for
Financial	Three years of P&Ls, balance sheets and tax returns; this year’s monthly figures; a list of add-backs with support; debts and liens
Revenue and production	Revenue by service; production by doctor; active client or patient counts, new clients or patients, and visit frequency
Team	A roster with roles, pay, tenure and benefits; associate employment agreements; licenses
Facility and equipment	The lease or property documents; an equipment list with ages; service contracts and equipment leases
Legal and compliance	Entity documents; permits and registrations; insurance policies; any claims, complaints or disputes
Operations	Vendor and supplier contracts; practice-management or EHR software; phone numbers, website and online listings

Veterinary practices

Expect questions about DVM coverage and production by doctor, controlled-substance registrations and logs, in-house lab and imaging equipment, wellness-plan revenue if you offer plans, and any after-hours or emergency arrangements.

Optometry practices

Expect questions about payer mix and vision-plan contracts, the credentialing of each OD, optical sales and frame inventory, medical versus routine eye care revenue, and billing and coding practices.

Who sees what, and when

“How private is private?” is a fair question. In most deals:

• The buyer’s deal team sees the financials: a few people from acquisitions or finance, their accountants, their attorneys, and their lender if one is involved.
• Patient and client data is shared in summary first: counts, visit patterns and revenue mix. Individual records come later, if at all, and must follow the privacy rules that apply to your practice, such as HIPAA for optometry patient records and state rules for veterinary records.
• Employee details can be shared without names until late in the process, with names and individual terms once closing is near and offers are being prepared.
• Your staff don’t need to be involved during most of diligence. Key people sometimes need to be, for example an associate whose agreement is a condition of closing.

Agree these stages with the buyer at the start, and ask who will see each set of documents. Our guides to selling a veterinary practice or an optometry practice confidentially cover staged disclosure in more detail.

How long due diligence takes

Usually weeks to a few months rather than days. Three things decide it: how large and complex the practice is, how ready your documents are, and how the buyer works. Groups that buy often tend to run a well-practiced process; first-time buyers and their lenders can take longer.

The single biggest factor you control is preparation. If the documents are organized before you sign the letter of intent, most requests can be answered within days.

What slows or breaks a deal in due diligence

• Surprises. An unpaid liability, a dispute, or a problem the buyer finds on its own. Raise known issues yourself, early.
• Add-backs that don’t hold up. Personal expenses claimed as add-backs need support. Unsupported ones reduce the earnings the price was based on.
• A dip in performance. Revenue that falls while you’re distracted by the sale can reopen the price.
• The lease. A landlord who won’t consent to an assignment, or a lease that ends too soon.
• A key associate who won’t sign. If the buyer’s offer depends on an associate staying, that associate’s agreement becomes critical.
• Compliance gaps. Billing and coding issues in optometry, or controlled-substance records in veterinary practices.
• Slow answers. Delays raise suspicion and drain momentum on both sides.

The deal terms you agreed in the letter of intent shape how these are handled. See optometry practice sale terms for holdbacks, earn-outs and the other terms that come into play.

How to prepare for due diligence in a practice sale

Start a year ahead if you can:

1. Build a folder now. One organized set of documents, by the areas in the table above, updated monthly.
2. Reconcile the financials. Have your accountant tie the P&Ls to the tax returns and document every add-back.
3. Update agreements. Make sure associate agreements are current and signed, and check what they say about a change of ownership.
4. Review the lease. Check the term, renewal options and assignment clause, and talk to the landlord early if you need to.
5. List the equipment. Make, model, age and condition, plus any leases or service contracts.
6. Check compliance. A billing review in optometry, or a controlled-substance audit in veterinary practices, finds issues while you can still fix them.
7. Decide who helps. A transaction attorney and a CPA who know practice sales, engaged before the letter of intent.

Our checklist for preparing to sell lists the documents buyers ask for at each stage. For where due diligence fits in the full process, see our step-by-step guides to selling a veterinary practice and an optometry practice.

How Right Fit Capital helps

We introduce veterinary and optometry owners to qualified buyers who fit their goals, one introduction at a time. You share the basics first; financials come only when there’s a fit and you choose to go further. We stay available throughout due diligence to answer questions and keep things moving if talks stall. There is no cost to the seller.

Learn more about how matchmaking works, or get introduced to a buyer on a 15-minute call.