Posted by Amy Carbone on Apr 10, 2025 11:20:49 AM
One of the most common questions surrounding opening a practice is: how much does it cost to start a dental practice?
Starting a practice requires capital, recurring revenue, employee salaries, a significant amount of time, and more — altogether, it can feel overwhelming. However, by calculating a general price range ahead of time, you can make the best decisions for your career.
Here’s an overview of the factors that contribute to the overall cost of a dental practice and why it can fluctuate:
What Is the Average Cost of Starting a Dental Practice?
According to the ADA, you can expect to invest about $500,000 into starting a dental practice. This is an average number, and it’s possible for your practice to cost more or less than this.
6 Factors That Impact the Cost Of Opening a Dental Practice
Whether you are planning a dental practice startup or purchasing an existing practice, there are a number of components that go into the cost of opening a dental practice, including:
1. Loan Payments
Many dentists who start their own practices need to obtain some form of financing to secure a location, purchase equipment, start hiring, market their practice, and open the business. Depending on your lender, amount, and the market interest rate (among other factors), your loan payments are likely to be a sizable part of your expenses.
Regardless, you should know the sum of loan repayments you can expect every month and when you need to make them.
If you’re considering opening a dental practice and searching for loan options, you can speak with different lenders to find the loan terms that work best for you.
2. Insurance Policies
You will need appropriate insurance to protect yourself, your practice, and your team. In addition, some banks may require that you carry life and disability income insurance as a condition of lending; if you secure financing, you’ll likely need business loan protection.
To protect yourself, you may decide to have personal insurance policies designed to protect you and your assets, such as:
To protect your business, you will likely consider coverages, including:
- Business loan protection policy
- Business owner’s protection policy
- Business overhead expense disability insurance
- Employment practices liability insurance
- Entity malpractice insurance.
Due to the widespread occurrence of data theft, you may consider:
To protect your employees, your dental practice may need — and your state may require:
It’s important to know what coverages you will be required to purchase and any recurring charges to expect, such as an annual fee to maintain your business license.
3. Physical Location
Regardless of whether you lease or purchase your space, you’ll often find this will be an ongoing cost for a significant period of time. There are a number of factors that contribute to the overall cost of a dental practice’s physical location, including real estate, utilities, amenities, federal, municipal, and state taxes, and more.
Also, you’ll need to consider the cost of buying a dental practice and personalizing it, building from the ground up, or retrofitting an existing building. The ADA provides a variety of resources on practice design, with topics ranging from ways to make your practice more environmentally friendly to determining your office footprint.
4. Payroll
When opening a dental practice, you’ll need to put together your team.
You’ll be hiring a variety of people with different skill sets, including dental hygienists and assistants, front-office staff, and other team members. The salary range for these varies quite a bit, with a dental hygienist earning the most and front office staff members earning the least.
You’ll also need to consider payroll taxes, the employer’s share of Social Security and Medicare, and potentially unemployment. Salaries and associated costs, even before the addition of benefits, can amount to several hundred thousand dollars annually. Make sure you consult with your accountant or CPA for more details.
5. Licensing and Legal Requirements
To start your own practice, you’ll need to decide on the legal structure of your business and register it as a legal entity with the appropriate state authority, obtain an Employer Identification Number (EIN) from the IRS, and register for state and local taxes. Depending on the legal structure, you may need to create internal documents such as a partnership agreement or bylaws.
State and local requirements also apply. You’ll need to obtain a business license and may also need other specific permits, such as health and safety inspections, fire department permits, and local zoning compliance inspections.
You’ll be required to pay any applicable up-front charges required by your state, county, and locality, including registration fees, which vary depending on your location.
Consult with your own attorney as you navigate these requirements; you may also incur legal fees for this.
6. Practice Equipment
Practices require a mix of standard office equipment and specialized dental equipment. When planning on dental equipment, make sure you add to your planning budget any items needed for specialized services or advanced technology equipment.
Many practices also purchase dental management software to provide data storage for patient records, appointment bookings, and other essential information.
Running a Successful Dental Practice
Once you’ve launched your new practice, it’s time to get to work.
A critical step will be to create and grow your patient list. There are a number of ways you can do this, including:
- Developing and targeting your ideal patient type.
- Receiving and utilizing patient reviews.
- Using marketing, promotion, and advertising to grow your practice.
For more tips on growing your patient list and running a successful practice, access our complimentary Ebook, Strategies To Grow Your Dental Practice Patient List, today!
About Treloar & Heisel
Treloar & Heisel, an EPIC Company, is a premier financial services provider to dental and medical professionals across the country. We assist thousands of clients from residency to practice and through retirement with a comprehensive suite of financial services, custom-tailored advice, and a strong national network focused on delivering the highest level of service.
Insurance products offered through Treloar & Heisel, LLC.
