How To Start A Dental Practice: Costs Involved And Checklist

April 19, 2022

Adam Hoeksema

Although some dentists are content with earning a salary as an associate, some dream of starting their practice. If you're thinking of opening a dental practice, you're in for a lot of hard work - but the rewards can be great! 

From conceptualizing your venture to bringing it to life, there's a lot that you need to do. Some of the challenges you'll face include growing your business to the point that it's profitable and sacrificing some leisure time. 

It's important to do your research and understand the costs involved before taking the plunge. This article will give you a detailed breakdown of how to start a dental practice - the costs involved and the checklist to help make sure you haven't missed anything. 

How Profitable Is A Dental Practice?

One of the questions dentists want to be answered before starting their own practice is how profitable the business is. The average net income for a general dentistry practice, according to the ADA, is $190,440 per year. However, this number will differ based on the type of dental practice, location, and the number of patients seen. 

There are a few things that you need to take into account when trying to determine how profitable your dental practice will be: 

  • The size of your market - this includes the number of potential patients and the competition.
  • The type of dental practice - some procedures are more profitable than others.
  • Your business model - how you run your business will impact your bottom line. 

Should I Start My Own Dental Practice?

If you are still on the fence on whether to start your dental practice, here are a few things to consider: 

  • Do you have enough capital to get started? You'll need to factor in the cost of leasing or buying a facility and the cost of outfitting it with dental equipment. If you suspect that you do not have enough funds, consider getting a bank loan.
  • Can you handle the administrative and business responsibilities that come with owning your practice? In addition to being a great dentist, you'll need to wear many hats as a business owner.
  • Are you prepared for the long hours? You may have to work longer days to build up a client base when you first start.
  • Do you have a solid business plan? This is essential for any new business and will help you secure loans and investments.

Answering these questions will help you determine if your own practice is the way to go. During this process, you also need to consider if you will 

How To Start A Dental Practice

Now that you've determined that you want to open a dental practice, it's time to start putting your plans into action.  But before we jump in, this article is meant for general dental practices, if you are a surgeon or specialist you might find our article on How to Start a Medical Office to be a better fit.

Create a business plan

The first step is to develop a business plan. This document will outline your goals, strategies, and how you plan to make your dental practice successful. 

Your business plan should include: 

  • An executive summary: this is a brief overview of your business plan. The executive summary should include the name and location of your practice and your business model. For example, will you be a solo practitioner, or will you have partners? 
  • A description of your business: this is where you'll describe the services you plan on offering and any unique selling points that will set you apart from the competition. For instance, if you're planning on opening a pediatric dental practice, you'll want to highlight your experience working with children. 
  • Your target market: who are your potential customers? What are their needs, and how will you be able to meet them? You should also include an estimate of the potential number of patients you can attract. 
  • Your marketing strategy: how do you plan on getting the word out about your dental practice? Will you use traditional advertising methods or rely on word-of-mouth? 
  • Your financial projections: this is where you'll need to do some research to come up with realistic numbers. You'll need to estimate your start-up costs and your ongoing expenses. Be sure to include a buffer for unexpected costs. Once you know some of your input numbers and assumptions, you can use our financial projection template built specifically for Dentists to get your polished projected financial statements which will be crucial for obtaining financing.

Consider a partner

If you are not comfortable with running your practice independently, consider working with a partner. This can be another dentist, a business partner, or even a family member. 

There are several benefits to having a partner: 

  • You'll have someone to share the workload with. This can be especially helpful if you plan to open a larger practice. 
  • You can pool your resources to save on start-up costs. 
  • You can split the responsibility of making decisions, which can be helpful if you're struggling with decision fatigue. 

Of course, there are also some drawbacks to having a partner. It's important to have a clear understanding of your roles and responsibilities and a plan for what happens if one of you wants to leave the practice. 

Obtain financing

If you do not have capital, you'll need to obtain financing to run your dental practice. A few options are available, such as bank loans, private investors, or government grants. 

You'll need to put together a strong business case to secure funding. Your business plan will come in handy here, as it will provide potential lenders with an overview of your plans. 

You should also be prepared to provide collateral, such as your home or other assets. 

Since it can be difficult to predict exactly how much you will need, you might need professional help. A professional service (like us here at ProjectionHub) can help you get started on something like accurate dental office financial projections. Their projections are industry-specific. Thus you can rest assured that they will offer the best estimates. To get your projections, all you have to do is fill out a template, upload it, and wait for expert review. 

Determine the size and layout requirements

Ask yourself how much square footage you require and what type of layout will work best for your dental practice. Do you need a reception area? How many treatment rooms do you plan on having? 

You should also think about the type of atmosphere you want to create. Do you want a modern and sleek design or a more traditional look? 

Find a location

Once you've determined the kind of space you want, the next step is to find a suitable location for your dental practice. 

Location is one of the things that greatly affect starting costs and the success of a venture. For instance, if you choose a low-cost location, you'll save on initial costs, but the area might not be the easiest for customers to access. In the end, such a location will limit your business growth. 

When choosing a location, there are a few things you should keep in mind: 

  • The size of the space: you'll need enough room for a reception area, dental chairs, and storage. 
  • The layout: the space should be functional and allow for a smooth flow of patients. 
  • The lease: be sure to negotiate a fair lease agreement that fits your budget. 
  • The neighborhood: you'll want to choose a location that's easily accessible and in a safe area. 
  • The competition: try to avoid areas where there are already many dental practices. 

Get insured

Having insurance is essential for any business, but it's especially important for healthcare businesses. There are a few different types of insurance you'll need to consider: 

  • Professional liability insurance: also known as malpractice insurance, this type of coverage will protect you if a patient sues you for negligence. 
  • Property insurance: if you own your own building, you'll need to insure it against damage from fire, theft, or natural disasters. 
  • Workers' compensation insurance: if you have employees, you'll be required to have this type of coverage in most states. 
  • Health insurance: as a healthcare provider, you'll need to have health insurance for yourself and your employees. 
  • Disability insurance: this type of insurance will provide you with an income if you cannot work due to an injury or illness. 

Outfit dental equipment

Once you get insured, it's time to start outfitting it with dental equipment. The type of dental equipment you'll need will depend on the services you plan on offering. For instance, if you're planning on doing x-rays, you'll need to purchase an x-ray machine. 

You should also make sure that your dental equipment is up-to-date and meets all the necessary safety standards. 

In addition to dental equipment, you'll also need to stock your office with supplies, such as gloves, dental instruments, and cleaning materials. You'll also need to purchase furniture for your waiting room and reception area. 

Hire staff

Now that you have all the equipment you need for your practice, you can start hiring staff. The size of your staff will depend on the size of your practice. For example, a solo practitioner may only need one dental assistant, while a larger practice may need several. 

When hiring staff, be sure to take your time and find employees that are a good fit for your business. In addition to dental assistants, you may also need to hire a receptionist and an office manager. 

You should also consider hiring a marketing consultant to help you promote your practice. 


Start marketing your dental practice a few days before opening to get people excited about it. You can hold a small opening party and send invites to friends and family. Create business cards to hand out to potential patients during the party.

There are several ways you can market your dental practice. You can place ads in local newspapers and magazines or create a website and use search engine optimization to attract new patients. 

Do not forget to establish a strong social media presence to help with social media marketing. Advertising on social media is critical to the success of your business, as you can create hyper-specific ad campaigns that target your ideal patients. 

You can also offer promotions and discounts to attract new patients. For instance, you could offer free teeth cleaning for new patients.

If you've been wondering how to open a dental office, follow the steps discussed above. Just do your research, create a solid business plan, and market your practice effectively. 

The Costs Of Starting A Dental Practice

Of course, one of the most important considerations when starting a dental practice is the cost. The initial investment can be significant, but there are ways to reduce the cost. Here are a few of the biggest expenses you'll face: 

Leasing or buying a building 

Leasing is relatively cheaper compared to buying a building outright. You'll need to factor in the cost of renovations, as you'll likely need to make some changes to the space to suit your needs. 

For renovations, choose a contractor who is experienced in dental office construction. Ensure that the building you choose to buy or lease is compliant with all the necessary safety and health regulations. 


The size of your dental office will greatly influence your start-up costs. A smaller space will be cheaper to lease or buy, but you'll need to make sure it's large enough to accommodate all your dental equipment and staff. 

You should also consider the location of your office when determining the size. If you're planning on opening a practice in a busy downtown area, you'll need to make sure that you have enough space to accommodate a large number of patients. 

Dental equipment

The cost of dental equipment can vary greatly depending on the type of equipment you need and the brand you choose. You'll need to purchase basic dental equipment, such as chairs, lights, and x-ray machines. You should also factor in the cost of dental supplies, such as gloves, dental instruments, and cleaning materials. 

You can either buy new or used equipment. If you're on a tight budget, you can look for used equipment. However, be sure to have the equipment inspected by a professional before purchasing. Consider purchasing your supplies in bulk to save money. 


You'll need to purchase furniture for your waiting room and reception area. The type of furniture you choose will depend on your budget and the style of your office. 

You should also consider purchasing a few art pieces to hang in your office. This will help make your office more inviting and comfortable for patients. 

Computers and software

You'll need at least one computer for your office and dental practice management software. The cost of the software will vary depending on the features you need. 

You should also factor in the cost of setting up a website for your practice. Setting up a website will require paying for hosting and domain name. 


You'll need to purchase liability insurance for your practice. The cost of the insurance will vary depending on the coverage you choose. 

Consider purchasing malpractice insurance. This type of insurance will protect you in the event that a patient files a lawsuit against you. 


Dental practitioners need to hire at least one dental hygienist and one dental assistant. The cost of salaries will vary depending on the employees' experience and your practice location. 

When budgeting, factor in onboarding costs, such as the cost of training your employees. You should also consider the cost of employee benefits, such as health insurance and retirement plans. 

Licenses and permits

Like with all physical businesses, you'll be required to obtain a business license and a dental license. The cost of the licenses will vary depending on the state in which you're practicing. When creating your budget, include the cost of any permits you'll need, such as zoning permits.


Marketing your dental practice can also be costly. You'll need to budget for advertising and marketing materials, such as business cards and flyers. It would help if you also considered hiring a marketing consultant to help you develop an effective marketing strategy. Soon as you open your business, you'll realize that you cannot do it all. Hiring a marketing consultant will help you to free up time that you can use to focus on other aspects of your new venture.

Market research

Set aside some funds for market research as it helps to ensure the success of your dental practice. Before opening your practice, you should conduct market research to determine the needs of potential patients in your area. 

This will help you tailor your services and marketing strategies to attract new patients. You can also use market research to determine the most effective way to price your services.

To nail down your startup costs and have an air-tight understanding of how long your investment will take to put money back into your pocket, be sure to have realistic dental office financial projections completed. 

How To Reduce The Cost Of Opening A Dental Practice

You can reduce the cost of opening a dental practice by leasing rather than buying a building and purchasing used rather than new dental equipment. It will help if you hire recent grads or dental assistants willing to work for a lower salary. However, do not compromise the quality of your services by hiring under-experienced people. At least one year of experience is required to guarantee excellent quality services. 

If you're wondering how to open a dental office, there are several things you need to consider, including the cost. Opening your practice can be costly and time-consuming. However, you can open a successful dental practice with careful planning and execution. 

About the Author

Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 40,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.

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