A Breakdown of the Costs Associated with Starting a New Dental Practice

Starting a dental practice isn’t as easy as turning a key. On top of state laws, ownership structure, and buyer representation to guide you through the process, there’s also that pesky detail of startup costs. It typically costs between $350,000 to $500,000 to start a new dental practice from the ground up, but where does all that money go toward? Here, we break down how to allocate your dollars leading up to starting the dental practice of your dreams.

Working capital

A big chunk of your expenses will go toward working capital because you are not profitable to start out with. Operating expenses, such as paying your staff, insurance, marketing to get patients in your door, and literally keeping the lights on, can run between $50,000 to $100,000.

Build-out

Chances are, your office won’t come equipped with everything you need to get your dental practice off the ground as you see fit. $150,000 to $250,000 should be put toward the build-out of tenant improvements, including plumbing, adding walls and bays, and any other layout designs to make it a real dental practice.

Equipment and sales

While it may seem fun to pick out all new equipment, it will, of course, come with a price tag between $150,000 and $250,000. But used equipment can prove to be costly, too. Consider that equipment and technology might be outdated and in need of a little sweat equity to get the office up and running in terms of software and even aesthetics. However, with a new practice, time must be spent negotiating pricing for equipment and construction based on national pricing.

Dental school graduates

New dental school graduates especially are in a good position to establish a startup. Rather than taking on an existing client base, you would start your own practice from the ground up. Although the ultimate dream for most, it’s worth mentioning that between dental school and bank loans, you have the potential to be $1 million in debt before seeing your first patient, which may not be an issue for you since the success rate for a dental practice is so high. Start by assessing your debt load and making sure you aren’t overextending yourself.

What’s next?

Contact the experts at Professional Transition Strategies to set up a buyer profile and view the new interactive map with available dental practices for sale to help narrow down your search to make your dream a reality, based on the type of practice, number of operatories, collections, and among other factors.