What It Costs To Open A Dental Practice

August 26, 2020

As exciting as it feels to have made the decision to build a new office or buy an existing dental practice, the process from planning to the first day you're seeing patients can feel daunting. To help things go as smoothly as possible, you need to take an organized approach every step of the way. Doing your research not only involves choosing the right location, and developing a business plan, it also requires careful consideration of the involved costs and wise financial planning. 

Financial considerations when building a new office

According to the American Dental Association, if you're building a new practice, your initial investment can run upwards of $500, 000.  While about half of that amount will go towards construction, outfitting the office with computers, software, dental equipment, and supplies will account for much of the balance. It's also essential to keep in mind that other variables, including the existing site's condition and whether you're renting space or own the building, affect your costs. You'll also need to have funds on hand to pay any attorney's fees along the way as well as money to promote and market your practice. 

What it costs to buy an existing practice

If, on the other hand, you've decided to purchase an existing practice, the costs involved differ from establishing a new one. The purchase price is subject to negotiation and typically hovers around 60-80% of the annual gross.

Many factors influence the cost of buying an established office, including:

  • Location
  • Size of the practice
  • Annual gross and profitability
  • Overhead and operating costs
  • How many other dental offices are serving the community
  • The seamless transfer of the patient base
  • Renovations, repairs, equipment upgrades or purchases
  • Transition and marketing costs

How to fund your practice

Whether or not you're building your own dental practice or buying an existing one, funding this endeavor most often requires applying for a loan. Lending institutions require a lot of detailed information to determine that your office is a worthwhile and reliable investment. You need to have a detailed business plan in hand and make sure your credit report indicates financial health and trustworthiness. Pay close attention to interest rates, and if you are able, shop your loan around for the most favorable rates and terms. You want to be sure your debts will be manageable and can eventually be paid off without incurring any additional financial hardship. You may want to consider consulting a financial planner. 

Bottom line: Opening a new dental practice and maximizing the success of this endeavor depends on doing your research and making informed decisions. At, we offer practice management guidance along with the website and online marketing tools you'll need to get your new practice noticed.

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