How to Start a Dental Practice

Dental practices are important to any community, ensuring the oral health of children and adults. Dentistry is also a huge industry, worth more than $170 billion in the U.S. alone. If you’re a dentist and want to strike out on your own, a dental practice has huge profit potential. You’d also be providing a valuable service, even though your practice may not be a favorite place to go for most people!  

But before you get started, you need to understand the business side of things. Fortunately, this step-by-step guide has all the information you need to start a lucrative dental practice.

Step 1: Decide if the Business Is Right for You

Pros and cons

Dental practice industry trends

Industry size and growth

• Industry size and past growth – The U.S. dentists industry is worth $171.7 billion in 2023 after growing 1% annually for the last five years.((https://www.ibisworld.com/united-states/market-research-reports/dentists-industry/))
• Growth forecast – The U.S. dentists industry is expected to decline 2.7% in 2023.
• Number of businesses – In 2023, 199,508 dental businesses are operating in the U.S.
• Number of people employed – In 2023, the U.S. dentists industry employs 1,140,861 people.

Trends and challenges

Trends

• Emotional dentistry which focuses on the mental wellbeing and comfort of patients is an emerging trend.
• Laser dentistry is allowing for minimally invasive dental treatments.

Challenges

• Staffing is an ongoing issue for dental offices and is particularly difficult now.
• Regulations regarding the dental and medical industries are constantly changing, forcing dental practices to continuously evolve.

Demand hotspots

• Most popular states – The most popular states for dentists are Alaska, Michigan, and Nevada.((https://www.zippia.com/dentist-jobs/best-states/))
• Least popular states – The least popular states for dentists are West Virginia, Kentucky, and Nevada.

What kind of people work in dental practices?

• Gender – 54% of dentists are female, while 46% are male.((https://www.zippia.com/dentist-jobs/demographics/))
• Average level of education – The average dentist has a bachelor’s degree.
• Average age – The average dentist in the US is 46.2 years old.

How much does it cost to start a dental practice business?

Startup costs for a dental practice range from $180,000 to $260,000. The largest cost is equipment. 

You’ll need a laundry list of items to successfully launch your dental practice business, including: 

• Sanitation and sterilization equipment
• Separation tanks, compressors, amalgam separators, and vacuums to provide pressurized water, suction, and air for your handpieces
• Floor mats
• X-ray imaging equipment
• Computers and monitors
• Dentist and assistant carts
• Ergonomic chairs
• Adjustable light mounted to the wall or ceiling
• Cabinets
• Compressor unit
• Tray materials
• Mixing bowls
• Milling blocks
• Stones
• Spacers
• Belts
• Buffs
• Clasps
• Bars
• Torches
• Cleaning alcohol
• Pressure pots
• Trap replacement materials
• Excavators
• Cements
• IV supplies
• Thermometers
• Drills
• Intraoral cameras and cheek retractors
• Cleaning paste
• EKG supplies
• Scaler
• Burs
• Whiteners
• Veneers
• Blades and cutters
• Laparoscopic equipment
• Small mirrors for the mouth
• Acrylic liquid and powder
• Curettes
• Scissors
• Autoclaves
• Dental dams
• Grommets
• Alloys
• Ceramics
• Needles
• Molds
• Burnishers
• Prophy angles
• Electric handpieces
• Fiber optic handpieces
• Air-driven handpieces
• Syringes and local anesthetic
• Resins and composites
• Probes
• Tweezers
• Trays and cassettes
• Pliers
• Forceps
• Crowns and bridges

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$100 - $500	$300
Business licenses and permits	$100 - $300	$200
Insurance	$100-$500	$300
Website	$500 - $1,000	$750
Office space rental	$5,000 - $10,000	$7,500
Space preparation and equipment	$150,000 - $200,000	$175,000
Operating budget	$30,000 - $50,000	$40,000
Sales and marketing budget	$500 - $1,000	$750
Total	$186,300 - $263,300	$224,800

How much can you earn from a dental practice business?

What you charge for dental services will depend on the service. An average price per patient will likely be about $200. Your profit margin should be about 40%. 

In your first year or two, you could have 40 patients a week, bringing in $416,000. This would mean $166,400 in profit, assuming that 40% margin. 

As you gain traction, you might have 80 patients a week. With annual revenue of $832,000, you’d make a tidy profit of $332,800.

What barriers to entry are there?

There are a few barriers to entry for a dental practice. Your biggest challenges will be:

• Funding the startup costs
• Breaking into a competitive market

Step 2: Hone Your Idea

Now that you know what’s involved in starting a dental practice, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research could give you the upper hand even if you’ve got the perfect product. Conducting robust market research is crucial, as it will help you better understand your customers, your competitors, and the broader business landscape.

Why? Identify an opportunity

Research dental practices in your area to examine their services, price points, and customer reviews.

• Make a list of dental practices that offer similar services. 
• Review your competitors’ services – their features, pricing, and quality – and marketing strategies
• Check out their online reviews and ratings on Google, Yelp, and Facebook to get an idea of what their customers like and dislike.
• Identify your competitors’ strengths and weaknesses. 

This should identify areas where you can strengthen your business and gain a competitive edge to make better business decisions.

You’re looking for a market gap to fill. For instance, maybe the local market is missing a private dental practice that offers wisdom teeth removal. 

This could jumpstart your word-of-mouth marketing and attract clients right away. 

Your best bet is to offer a wide variety of services for both children and adults. That will bring in the most revenue.

Here are some of the most common dental services:

1. Routine Check-ups and Cleanings: Essential for preventive care, they are a steady source of revenue.
2. Fillings and Restorations: Common due to the prevalence of cavities.
3. Crowns and Bridges: Regularly needed for tooth restoration.
4. Dental Implants: Growing in popularity as a long-term solution for missing teeth.
5. Orthodontics: Including traditional braces and clear aligners for teeth straightening.

If expanding your practice is a priority, consider these six dental services that are often the most profitable:

1. Cosmetic Dentistry: Includes veneers, whitening, and bonding. These are high-demand services with significant profit margins.
2. Implant Dentistry: High cost of materials and procedure, but also high demand, especially among older patients.
3. Oral Surgery: Such as wisdom tooth extractions and complex surgical procedures.
4. Orthodontics: Especially clear aligner treatments like Invisalign, which are popular and carry high fees.
5. Periodontal Therapy: Treatments for gum disease, which can be quite lucrative, especially for advanced cases.
6. Endodontics: Root canal treatments, which are technically demanding and therefore priced higher.

Who? Identify your target market

Your target market will largely depend on the services that you offer. Different services appeal to different demographics. For example, pediatric dentistry targets children and their parents, while cosmetic dentistry may appeal more to adults concerned about aesthetics.

Understand the population in your practice area. Tools like census data can provide insights into age groups, family sizes, and income levels. For instance, a suburb with many families might need more pediatric and orthodontic services.

Conduct surveys or focus groups to understand the needs and preferences of potential patients in your area. For example, if there’s a high number of elderly individuals, services like dentures or implants might be in demand.

Once you know your target market, tailor your marketing efforts. Use social media, local advertising, community events, or partnerships with schools and businesses to reach your audience. For example, if targeting families, consider advertising in local schools or family magazines.

How much should you charge for dental services?

Your prices should depend on market prices in your area, but also on your costs. Calculate the total cost of providing each service, including materials, labor, equipment depreciation, and overhead expenses. This forms the baseline for your pricing.

Once you know your costs, use this profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Where? Choose the best location for your dental office

Choosing the right location for your dental office is critical as it can significantly impact your business. Here are some factors to consider when choosing a location:

1. Demographics: Do research on the demographics of the areas you’re considering. This includes considering age distribution, income levels, family sizes, and more.
2. Competition: Check the existing competition in the area. Setting up in an area already saturated with dental offices could make it more difficult to attract patients unless you offer a unique service that isn’t currently provided.
3. Visibility and Accessibility: Your office should be easy to find and accessible. A location with high visibility, perhaps on a well-traveled road or in a busy shopping center, can help attract walk-in customers. Consider factors like parking availability, proximity to public transportation, and ease of access for people with disabilities.
4. Community and Development: Choose a location in a growing community. An area that is under development or has a rising population can offer a steady stream of potential new patients.
5. Proximity to Other Health Services: Being close to other health services, such as a hospital or pharmacy, can be beneficial. Also, being near schools or family-friendly services might be useful if you’re focusing on paediatric dentistry.
6. Office Space Requirements: Make sure the location can accommodate your needs in terms of office size, number of treatment rooms, and other specific requirements you may have. If you’re planning to expand in the future, consider this in your initial choice of location.
7. Regulations: Check with local zoning laws to make sure you can legally operate a dental office in your chosen location.

You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

Step 3: Brainstorm a Dental Office Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “dentist” or “dental”, boosts SEO
• Name should allow for expansion, for ex: “OralHealth Oasis” and “Dental Spectrum Care” over “Children’s Smile Studio” and “Cosmetic Dental Artistry”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead and reserve your business name with your state, start the trademark registration process, and complete your domain registration and social media account creation. 

Your business name is one of the key differentiators that sets your business apart. Once you pick a name, reserve it and start with the branding, it’s hard to switch to a new name. So be sure to carefully consider your choice before moving forward. 

Step 4: Create a Dental Practice Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: A snapshot of your dental practice, outlining its mission, services, and business goals.
• Business Overview: Overview of your practice offering general and specialized dental services, including preventive care, cosmetic dentistry, and orthodontics.
• Product and Services: Description of dental services such as routine check-ups, cleanings, fillings, braces, implants, and cosmetic procedures.
• Market Analysis: Insight into the local dental market, including patient demographics, healthcare trends, and regional dental health needs.
• Competitive Analysis: Examination of other dental practices in the area, their services, pricing, and patient base.
• Sales and Marketing: Strategies for attracting and retaining patients, such as online presence, community outreach, and patient referral programs.
• Management Team: Information about the dental professionals and administrative staff, highlighting their qualifications and roles in the practice.
• Operations Plan: Outline of the practice’s daily operations, including patient scheduling, treatment planning, and office management.
• Financial Plan: Financial projections including cost of equipment, staff salaries, pricing strategy, and revenue expectations.
• Appendix: Supplementary materials such as dentist certifications, patient testimonials, and partnership agreements with dental product suppliers.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to dental practices. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your dental practice will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.  Here’s how to form an LLC.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation. Read how to start a corporation here.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have. 

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a dental practice business. 

Step 8: Apply for Dental Practice Business Licenses and Permits

Starting a dental practice business requires obtaining a number of licenses and permits from local, state, and federal governments.

You’ll need to check dental practice licensing requirements in your state.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your dental practice business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

You may want to use industry-specific software, such as Planet DDS or Henry Schein, to manage your appointments, insurance claims, billing, and payments. 

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Create a website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Your customers are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. Optimize your website with relevant keywords to rank higher in search results for dental services in your area.

Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Schedule Now”. This can sharply increase purchases. 

Online Marketing Strategies

To effectively capture the attention of the digital audience, here are key online marketing strategies tailored for your dental practice:

1. Social Media Marketing:
   • Facebook: Use for paid advertising, targeting demographics relevant to your dental services, such as families in your local area.
   • Instagram: Leverage its visual platform to showcase before-and-after photos of dental treatments, and engage with a younger audience.
   • TikTok: Create engaging, informative videos to reach a younger demographic. Consider short clips showing dental tips or debunking dental myths.
   • LinkedIn: Network with other professionals and share industry insights, targeting B2B opportunities like partnerships with local businesses.
2. Google My Business & Yelp Listings: Ensure your practice is listed with accurate details, encouraging satisfied patients to leave positive reviews.
3. Email Marketing: Send personalized emails or newsletters with dental care tips, special offers, and appointment reminders.
4. Blogging: Create a blog on your website with informative articles on dental health, new treatments, and patient education.
5. Paid Ads: Utilize targeted ads on social media and Google AdWords to reach potential clients actively searching for dental services.
6. Content Marketing: Share engaging and educational content across multiple platforms, including your website and social media.
7. Video Marketing: Use platforms like YouTube to post educational videos, office tours, or patient testimonials.

Traditional Marketing Strategies

In addition to online methods, traditional marketing remains vital for local and tangible engagement with potential clients:

1. Competitions and Giveaways: Engage the community with contests, offering dental care packages as prizes.
2. Signage: Invest in high-quality, visible signage for your practice to attract passersby.
3. Flyering: Distribute flyers in high-traffic areas or during local community events.
4. Referral Programs: Encourage word-of-mouth referrals with incentives for existing patients who refer new clients.
5. Testimonials: Display positive patient testimonials in your office and on your website.
6. Local Partnerships: Collaborate with nearby businesses to offer joint promotions or sponsor local events.
7. Community Involvement: Participate in local health fairs or school events to increase visibility and offer free dental check-ups or consultations.
8. Direct Mail: Send postcards or informational brochures to local residents offering introductory deals or highlighting services.

Integrating Strategies

To maximize the impact of your marketing efforts, it’s crucial to seamlessly integrate online and traditional strategies:

• Cross-Promotion: Link your online and offline strategies. For example, promote your blog articles on social media and mention your social media contests in your email newsletters.
• Consistent Branding: Ensure your brand’s message and aesthetic are consistent across all platforms, from your website to your office décor.
• Patient Engagement: Engage with patients both online (via social media comments and reviews) and offline (in your practice) to build a community around your brand.
• Tracking and Analysis: Regularly analyze the effectiveness of both online and traditional marketing strategies, making adjustments based on customer feedback and engagement metrics.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your dental practice meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your dental practice business could be: 

• Transforming smiles and boosting confidence with personalized dental care
• Providing exceptional oral health solutions for a brighter, healthier you
• Delivering gentle, comprehensive dental services for the whole family

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a dental practice business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in dental practices for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in dental practices. You’ll probably generate new customers or find companies with which you could establish a partnership.

Step 12: Build Your Team

You will need workers to fill various roles. Potential positions for a dental practice business include:

• Receptionist – greet clients, make appointments
• Dental Hygienists – X-Rays, cleanings
• Billing Specialist – send bills, handle insurance claims, take payments
• Marketing Lead  – create and implement marketing strategies
• Office Manager – manage staff, accounting

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Dental Practice – Start Making Money!

Dentists have a rewarding job, helping people maintain their oral health. A dental practice can also be a very financially rewarding business with huge profit potential. More importantly, you’d be an important provider of services in your community. Eventually, you could add partners and expand your practice, even to new locations.

You understand the business side of things now, so you’re ready to get your successful dental practice up and running!