This post was originally published March 24, 2023 and updated on April 17, 2024. Setting up a new dental practice involves combining the challenges of starting a business with additional dentistry-related challenges, which can be overwhelming. A lot of work goes into establishing any business, from deciding if a partner is right for you to how many employees you will hire to how you will market your dental practice. This post will cover all these and more to help you set yourself up for success. By completing a simple “starting a new dental practice” checklist, as outlined in this post, you can ensure you have everything in order before opening your dental practice.
Starting a dental practice is a big step, and it's not something to be undertaken lightly. Before moving forward, consider whether starting a dental practice makes sense for you. There are many factors to keep in mind, including the personal and financial impact that being a business owner will have on your life. Here are some important considerations to keep in mind.
A recent survey conducted by DentalPost analyzed over 13,000 dentists across the country to compare salaries, working hours, and job satisfaction among dentists in different positions and levels of experience. The survey findings show minimal disparity in the weekly working hours between practice owners and employees, with most individuals working between 31 and 40 hours per week. However, practice owners are more inclined to work over 40 hours weekly — 19% compared to 14% of associate dentists.
Regardless of experience, dental practice owners earn an average of $100,000 more per year and are likelier to receive salary raises than associate dentists. The most significant pay gap is observed among early-career dentists with less than 5 years of experience, where practice owners earn an average of $300,000 annually while associates earn $175,000.
Dentists who own a private practice are approximately twice as likely as dental employees to enjoy a range of benefits such as retirement plans, health insurance, tuition reimbursement for continuing education, coverage for attending dental conferences, and paid time off for vacation and holidays.
Finally, practice owners exhibit greater job security than associates, with the majority remaining at the same practice for over 15 years. Conversely, 85% of associate dentists switch to new employers before completing 7 years at a single practice.
If you're going to open and run your own dental business, you must be comfortable working independently. As an employee of an existing practice, you probably work fixed hours and have nights and weekends to yourself. You draw a salary. Going out on your own means that you'll have more responsibility. You’ll work longer hours than you do as an employee and may not have the same freedom that you had before. It may be difficult to predict your income on a weekly or monthly basis. On the other hand, you’ll reap the rewards of setting up the practice the way you want, creating a welcoming environment for patients, and ultimately, if you're successful, earning more money than you would if you were working for someone else. If you are comfortable with the idea of being the one who calls the shots and you're willing to put in the time and effort required to build your new dental office from scratch, then you may be ready to open a new practice.
Starting a dental practice requires working capital, often as much as $500,000. You’ll need to have cash at hand or good credit and collateral to qualify for a loan or line of credit. You need money to rent or buy office space, invest in equipment and supplies, hire employees, pay their salaries and benefits, and advertise to attract new patients. If you lack money or the means to finance your new venture, you may need to put your plans on hold until you do.
New dental practice owners commonly underestimate how much work they’ll need to do to get their practice up and running. You’ll need to make a significant investment of your time, energy, and creativity to attract new patients and be successful. It's essential to be realistic about the investment you will be making and be sure that you are at a place in your life where you can meet the challenges associated with striking out on your own.
The only way to be successful with a new venture is to create a roadmap. Business plans serve as templates to help entrepreneurs navigate the challenges of their new ventures. You'll need to understand how you plan to meet the challenges you'll face before you get started. Your plan should include details of:
Your plan will make it easier to achieve your goals and can help attract financing if you need it.
Market research is necessary for a business plan, but it deserves a separate mention because of its importance. It's important to know about the local market where you plan to set up your office.
What is the population of the area? How many other dentists are practicing there? What services do they offer? You’ll need to take these things into account before you move forward with your plans. You will need a different strategy in an area with only one competitor than in a location with multiple competitors, including national dental care chains. Market research can help you identify what makes your practice unique.
Unless you just graduated from dental school, you probably have an existing employment contract. Before going out on your own, you should review your contract with a lawyer, if necessary, to ensure you are not in violation of any non-compete clause.
Non-compete clauses can prevent you from opening a new practice within a specified time frame after you leave your existing job or within a certain geographical area. They may also impede your ability to bring existing patients to your new dental office. It’s vital to understand your legal obligations before you finalize your plans.
One of the questions we hear a lot is the question that gives this section its title: How much does it cost to open a new dental practice? The numbers can be daunting, but it’s essential to understand how much it will cost before you start.
By following our step-by-step guide and completing our simple Dental Practice Launch Checklist , as outlined in this post, you can be sure that you have everything in order before opening your dental practice .
The cost to start a new dental practice can range from $200,000 to $500,000. Many variables can impact the cost, including the proposed size of your practice, the location of your dental office, and the equipment you need to provide the services you want to offer. For example, opening a practice in an area where rents are reasonably affordable will cost less than opening in a high-cost-of-living city.
In addition to the money needed to open your practice, you should have about six months’ worth of overhead expenses on hand. It may take a while to attract enough new patients to meet your financial obligations, so you’ll need working capital to pay the bills. Here are some spending categories to include when you calculate your overhead expenses:
According to the American Dental Association Policy Institute, the annual cost of running a dental practice is $443,000 or more, just under $37,000 monthly. Despite varied costs based on your location and other factors, it’s essential to be realistic about your monthly costs and be prepared to pay them.
Before making any final decisions regarding your dental practice, take the time to review your options and obligations thoroughly.
Before you start a new practice, take notes and keep them in a centralized place. Keep organized with a notebook set aside only for notes when you open your practice. You can also create a Google Doc or use a notes app to keep track of your thoughts.
When all the information is in your head, it is easy to overlook one or two steps. Use a word processing program to jot down your step-by-step plan and any additional thoughts you think might be important down the road.
Now, onto your Starting a New Dental Practice Checklist . When starting a business, you must be prepared. Here are the major essential tasks you must complete to start a dental practice.
We’ll explore these items in further detail, along with final pre-opening tasks. While this list doesn't cover every single factor involved in opening a new dental office, it should help you create a detailed outline for moving forward with your goal of setting up a dental practice.
Some of the action items below involve financial planning. It’s vital to research and include detailed financial information in your business plan. This includes your lease, salaries, equipment, website creation, licensing fees, and other costs.
Keep in mind that your progress through these steps may be fluid and non-linear. You may complete them out of order, start a step and need to table it for a while before returning to it later in the process, or complete some of these steps concurrently. As long as you address all of them, you will be ready for the challenges ahead.
The first step to opening a new dental practice is creating a business plan: a detailed, living document that will help you get up and running. Your business plan should include your business strategy, standard operating procedures, costs, earnings, and other financial information. To obtain a business loan for your practice, you'll need a thorough business plan.
There are many online resources available to assist you in developing a business plan. You can even find business plan templates. We suggest creating a general outline of the information you want to include before choosing a template.
As you follow this checklist, you will find items to include in your business plan. If the information you gather does not apply to any of the categories in your outline, you can place additional details in the appendix.
One important thing to include in your plan is your exit strategy. It might seem unnecessary to consider an exit strategy before your new dental office opens, but there may come a time when you want to sell your practice. Having a well-planned exit strategy now will prepare you for the future. Your business plan should include details about your brand and your marketing strategy.
Are you going to open a dental practice on your own or partner with one or more associate dentists? Teaming up with a partner can offset the costs of opening your dental practice and make obtaining a loan easier. It’s essential to choose a partner who shares your vision and mindset since these will impact your ability to work together to make your new practice a success.
If you find a partner, choose a business structure that protects all partners. Your partnership agreement and/or operating agreement should include details about what will happen if one partner wants to leave the business.
Going into business with someone is a big commitment, so give any prospective partnership careful thought. Even if you decide not to choose a partner now, you can revisit the option in the future.
One of the most crucial decisions you will make is choosing a location for your dental practice. This step requires extensive research.
You may want to consider several towns and cities in the early stage of research. After that, you’ll need to look at the population, cost of living, and competition in the area. These are some of the most important factors because they will impact your ability to attract patients and build your practice.
The average number of dentists per 100,000 citizens is about 55. However, this number will vary from state to state. Factor in the total dentists per capita in your region and then determine where the other dental practices are located within your city. Consider the services other providers are offering and how you will differentiate yourself from them.
When choosing a location, you should also consider the potential for walk-ins. As you establish your dental practice, it helps to be in an area that receives a lot of pedestrian traffic. On a related note, choose a location where parking for your staff and patients is readily available. If you’re opening a practice in an urban area, proximity to public transportation is also mandatory.
Rents can vary greatly depending on your location. Compare costs for ground-floor and upper-floor suites in the same building or consider different types of space, including office suites, office parks, or even strip malls.
One of the biggest expenses when starting a dental practice is the up-front cost of equipment. In addition to dental equipment, you need furniture, computer systems, dental practice management software, and other items.
Find a reputable equipment salesperson early on in the process. You want to find someone who you can work with to obtain affordable, quality equipment. Be sure to research all of your options before making any large purchases. It may be less expensive to lease equipment initially and then buy new equipment when you’re ready to upgrade. If you want to buy equipment outright, you’ll need to find a lender that provides equipment financing.
Keep in mind that the word “equipment” can include an array of things you’ll need to set up your practice, including your instrument management system, dental practice management software, call tracking systems , laptops, tablets, and even furniture. When choosing software, it’s a good idea to read some dental software reviews and test out any programs you are considering using.
Before beginning your search for office space, determine how much actual square footage you need. How much space do you need for your waiting room, bathroom, reception area, and exam rooms? Will an X-ray room, storage space, and a break room also be needed? These are things to figure out before you start looking for an office.
Depending on your preferences, you may want to include a private office, a consultation room, or even a sterilization area. Of course, the number and type of rooms will vary from one practice to the next, but it’s a good idea to research other dental practice layouts so you can begin to envision how you want your office to look.
Once you have envisioned your perfect practice layout-- keeping things on the conservative side, unless you’re in the position to build a palace--make a list of the number of rooms needed and come up with approximate square footage for each room. When you total the figures, you will have a general idea of how much space you require.
In most cases, any dentist setting up a new practice will need an infusion of money to pay for start-up costs. After reviewing your business plan, you can apply for a loan or line of credit from a bank or lender. If you’re unable to obtain the financing that you require, then you might have to think about joining a dental partner, even if you originally planned on opening a dental practice alone.
You may have to wait on getting a lease, hiring employees, or any of the other steps that require financing, depending on your situation. As noted above, the average cost of opening a new dental practice ranges from $200,000 to $500,000.
Applying for and obtaining business financing can be a long process. You’ll need to research lenders and learn about their lending requirements. After narrowing your choices, you’ll apply and provide any necessary supporting documentation. We suggest having your attorney review all loan offers before you sign on the dotted lines.
Some dental practice owners prefer an all-in-one loan to pay for start-up costs, including equipment and overhead. We suggest comparing costs since it may be more advantageous to get a business line of credit and then apply for equipment financing as needed.
With financing in place, it’s time to begin your search for office space in earnest. In most cases, you may need to find an experienced practice real estate broker to help you with your search. Make sure to communicate your location preferences, square footage requirements, and anything else that’s important to you.
Keep in mind that it may take a while to find the right space for your needs. You may need to compromise on some requirements, so make sure you know where you’re willing to adjust your preferences.
You already know this, but it’s so important that I’ll remind you once again: opening a dental practice is a bogus investment. You may be tempted to splurge if you find something great that’s a little outside your budget, but it’s important not to spend too much on the lease. Remember that you can build your dream practice at a future date once you have an established patient base and regular income.
Many commercial leases have 10-year terms, making them easy to budget for. However, some may include built-in rent increases. Ensure you read the fine print and have your lawyer review the lease before you sign it.
You will not be able to do everything alone, so you should start thinking about your staffing needs sooner rather than later. Even if you don't plan to bring another dentist into your practice immediately, you’ll need to hire a receptionist, dental assistant, and billing specialist, or office manager. You may not be able to hire a full-time IT person, but you should look for a contractor to have on call when the need arises.
Finding employees for your dental practice isn’t always the easiest task, so set yourself up for success by planning ahead. Decide how many employees you need to get your practice off the ground. Then, research salaries in your area and determine an average salary for each position to create your personnel budget. Make sure to include personnel costs in your financial projections and include them in your business plan.
As it gets closer to when you’ll open your office, you can start to put your personnel plan into place and hire the staff you need.
To get your new dental practice off the ground, you'll need a marketing strategy. At a minimum, you’ll need an engaging website, a well-thought-out social media presence, and a Facebook business page. Your website will increase brand recognition, attract new patients , and serve as a hub for your digital marketing.
There are many different ways to create a website. You can go at it alone using a website builder platform such as WordPress, Squarespace, or Wix. Though this is an affordable option, it can be considerably time-consuming, especially if you’ve never set up a website before. Unless you have marketing and SEO experience, you also risk having a website that doesn't generate leads as well as it could.
The alternative is to seek the help of a web design or dental marketing company . There are many SEO and online marketing firms that include dental websites as a part of their services.
In addition to creating a website, you should employ the services of an SEO firm to help your dental practice attract potential patients and become more profitable. You do not need to wait for your doors to open. It can take several months to begin seeing results from an SEO campaign. For many, it can take a year to see a positive return on investment. Keep in mind that you'll get the best results from a firm that specializes in dental SEO and marketing.
By getting started early, you begin attracting attention before your dental practice is fully operational. Once you are up and running, you can increase your SEO investment and online marketing efforts.
Nearly all new practices will want to consider paid digital advertising to bring in patients quickly. PPC for dentists could be one of the most effective ways to attract new patients and build your practice.
One of the final things you need to do when opening a new dental practice is to ensure you have all the necessary permits, licenses, etc., required to practice dentistry in your area. You will need:
Consider buying memberships in professional organizations if you think it is necessary or beneficial to your practice. As a dentist, you may join dental organizations and your local Chamber of Commerce to get to know other local entrepreneurs. Laws and regulations vary from state to state, so be sure to research this final step carefully and to leave sufficient budgeting and time before opening to obtain these required permits.
These ten steps cover the most important decisions you’ll need to make when opening a dental practice. Note that you don’t need to complete all the steps in the order we’ve listed here. For example, try to obtain financing earlier in the process so you have money to set up a website and build your brand.
Once you have plotted out and executed the above ten steps, you can complete your final pre-opening checklist, which includes some smaller details and many final pre-opening tasks. Keep reading to find a refined checklist with the smaller steps in between, including the final pre-opening tasks.
Uncertain about when to carry out all these steps? Here is a timeline of when to complete each of these steps, with the additional smaller steps to complete in between and the final pre-opening tasks you need to execute before your Grand Opening.
As we noted above, you may need to switch the order of some of these items to fit your needs. We have put each step in the spot where most practice owners will want to complete it.
The process of opening a new dental practice is not easy. You’ll have a lot of major decisions to consider, some of which come up unexpectedly, but you can use this guide as a starting point.
Many of the decisions that you make will be crucial to the success of your dental practice. Once you move forward with your plans, it’s hard to make changes. For example, it can be costly to back out of a lease once it is signed. Therefore, ensure that you do everything right the first time around.
Take your time when planning your new dental practice. Also, do not be afraid to reach out for help. If you have any contacts in the dental industry , use them to gain additional information and helpful tips.
Running a dental practice is a difficult job that requires practice owners to wear multiple hats in a day. Understanding how to run a dental practice is a must, particularly if you’re fresh out of dental school or have never been in a management position. Here are some pointers:
These tips can help you understand how to run a dental practice. Keep in mind that choosing the right staff or partners who can handle tasks that you don’t know how to do or would rather not do is a big part of the solution to proper practice management.
Here are some tips from experienced dentists that may help you as you start your new dental practice:
We hope reading this post has helped you learn the steps to opening your new dental practice. Remember that despite all the hard work, running your practice can be very rewarding. You can be your own boss while performing a job that you love. We wish you the best of luck on your journey.
Do you need help setting up your dental website and establishing an online presence? Contact us today to learn how we can help!
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