It Costs $170,000 to $550,000 to Start a Dental Practice

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Are you looking to start your own dental practice? As part of your business plan, make sure to consider the startup and operating costs to start and run a dental practice.

We’ve identified that it costs anywhere from $170,000 – $550,000 to start a typical dental practice with 2 dentists, as well as $67,500 – $70,000 in operating costs per month to run the business the first few months.

Want to know more? In this article we’ll go through all the different costs you will need to incur to start your own dental practice. Read on!

What are the Startup Costs for a Dental Practice?

According to Amplify, the cost of starting a dental practice can be anywhere between $350,000 and $500,000. There are two main types of costs you need to consider: one-off setup costs and operating (or recurring) costs.

Logically, the costs to start a dental clinic vary significantly depending on factors like the size of the clinic, its location and the services you offer (because of the equipment you will need to lease or purchase).

So we’ve decided to give you below a clear overview of all the key expenses you can expect for a typical practice with 2 dentists (note that these costs are for illustrative purposes and depend on a number of factors as explained earlier).

Startup costRenovate existing buildingBuild from scratch
Building from scratch or refurbishing existing space$120,000$480,000
Equipment$50,000 – $70,000$50,000 – $70,000
Total$170,000 – $190,000$530,000 – $550,000

Dental Practice Financial Model

Download an expert-built 5-year Excel financial model for your business plan

Dental Practice Financial Model

Download an expert-built 5-year Excel financial model for your business plan

Let us now quickly go through the different types of costs you will incur to start a dental practice.

Dental practice building costs (or refurbishment)

This is the first major investment you need to make. You will need office space. The location or the region where you set up your office is important. The location plays an important role in determining how profitable your dental practice will be.

You will have an option of either building your dental practice from the ground up, but most dentists decide to rent a commercial property to set up their clinic.

When it comes to space, a 6-chair dental practice range anywhere from 1,800 to 2,400 square foot.

Safety Net Dental Clinic estimate the cost to build and/or refurbish a dental practice to be around $100 to $200 per square foot. So, assuming a 4-chair dental practice (2 dentists) at 1,200 – 1,600 square foot, the total cost typically ranges between $120,000 (refurbishment) to $480,000 (building).

Whether you decide to rent or purchase, unless you buy an existing practice you will have to hire professional to set up the layout. For example, ASI Dental Specialists offer a complete guide on room design and setup. Incorrect selection of layout and square footage can lead to problems and irregularities as there are norms to respect.

Dental practice equipment costs

The next major cost you need to consider is the equipment cost. Amplify suggests looking for dental equipment specialists who will sell you only the equipment that you need instead of trying to upsell those that you will never need or rarely use.

In general, expect to pay approximately from $50,000 for a 3-chair to $70,000 for a 6-chair dental practice.

Dental practice license fees

You will need a dental license from your relevant state agency. Additionally, there may be certain state license and permit requirements. You can learn all about the licenses in your state by visiting SBA’s reference to state licenses and permits.

You will also need a Certificate of Occupancy to ensure that your dental office conforms to zoning laws, building codes, and government regulations.

What are the Operating Costs to run a Dental Practice?

Once your dental practice setup is complete, you will need to budget for operating costs: expenses required to run the business. Of course, these expenses vary based on a number of factors, such as the size of your clinic, the number of employees, etc.

On average, it costs $67,500 to $70,000 to run a 2 dentists, 6-chair dental practice.

Operating costAmount (per month)
Rent$2,500 to $5,000
Lab fees$7,000
Variable costs$5,000
Other costs$8,000
Total$67,500 – $70,000

Dental Practice Financial Model

Download an expert-built 5-year Excel financial model for your business plan

Dental Practice Financial Model

Download an expert-built 5-year Excel financial model for your business plan

Dental practice staff costs

The main expense by far you will incur is payroll.

Logically, the total cost will depend on the size of your clinic, and the number of part-time and full-time employees you need.

Assuming the same 2 dentists, 6-chair dental practice example above, you may need to pay for:

  • 2x dentists (including yourself): average annual gross salary of $180,000
  • 2x dental assistants: average gross salary of $40,000
  • 1x dental hygienist: average gross salary of $77,000
  • 1x receptionist: average gross salary of $32,000
In total, you should set aside $45,000 in salary expenses each month.

Dental practice rental costs

Assuming you rent the office space where you have set up your 1,600 square foot dental practice, you should expect to pay anywhere from $20 to $40 per square foot per year.

In total, you could spend approximately $2,500 to $5,000 per month in rent for a 1,600 square foot practice.

Lab fees and variable costs

Another significant expense for dental practices are the outsourcing of certain services to laboratories. For example, an orthodontist would ask a laboratory to work on custom dental prostheses.

In addition to lab fees, there are variable costs associated to the procedures themselves. Indeed, even a regular checkup requires a number of expendable supplies. These expendable supplies are single-use items such as: stationery, local anesthetics, dental cements and gypsum products.

According to Dental Economics, you must try to stick to the following benchmarks:

  • Lab fees – 8% of total revenues
  • Variable dental costs – 6% of total revenues

Assuming 2 dentists with 4 patients each in the first few months per day, this represents 160 patients per month. Assuming an average procedure of $540 (with some procedures like surgery and dentures costing up to $5,000), the monthly revenue stands at $90,000. Therefore we could reasonably assume $7,000 in lab fees and $5,000 in variable costs.

Other expenses

In addition to the expenses discussed above, there are a number of other operating expenses you should budget for. These expenses include for example: advertising, marketing, office supplies, professional fees, uniforms, laundry, telephone, electricity, etc.

Make sure to budget ~10% of your total revenues for these other operating expenses.