How to Start a Private Dental Practice

Rene FloresOctober 20, 2020

Reviewed By: Amplify

If you are a dentist, you’ve probably considered becoming a dental practice owner someday. The steps needed to create a successful business may seem daunting – the process is neither cheap nor quick. But if you are determined to strike out on your own, learning how to start a private dental practice is a smart first step.

Even if your private practice is still years away, the work you do today can help set the stage for your business. 

Why Start a Private Practice?

Corporate dental offices tend to be very large, which does have its advantages. Corporate practices often come with more freedom from priorities outside the office and comprehensive benefits packages.

Dentists also benefit from having a back office to deal with insurance claims. That said, corporate dentistry tends to be heavily focused on the bottom line and hitting the numbers. This approach can often lead to high stress and turnover.

Private dental practices, on the other hand, get to benefit from a more tight-knit workplace. They are less focused on generating new business and more focused on providing exceptional patient care to existing clients. This leads to a consistent client base and allows staff to develop patient-doctor trust, making clients more open to various treatment options. There is often a high level of investment in continuing education for private practice dentists.

The Beginning Steps

No small business comes together overnight. Before you get serious about opening your own practice, start laying the groundwork by building the connections and experts you’ll need to be successful.

Build a network of trusted advisors

Some people like to manage every aspect of their first business. Others prefer to let the experts handle the little details. The good news is that there are professionals who specialize in working with private dental practices.

Researching, pricing, and purchasing all the equipment you need can be daunting. Find a dental equipment specialist who will look out for your best interests instead of upselling you as much as possible. It is not uncommon for a dental practice to form a long-term relationship with a dental equipment specialist.

Look for contractors with previous experience building out dental practices. Your dental equipment specialist can likely send you some recommendations. Find a specialized CPA, ideally one who works with at least 25 dental clients. They will have a much better understanding of the ins-and-outs of your finances.

Finally, look for a lender who understands the dental market as you try to secure start-up funding. Experienced lenders will understand the actual cost of starting a private dental practice and are prepared to help you break down the related expenses and fees. 

Once you have done your research, spend time putting together your business plan. Business plans are not just for lenders but really challenge you to make sure that you put down on paper all aspects of launching a successful practice. Think of it as doing your homework for a big exam.

Determine space requirements and location

When considering the location, you must also determine your space requirements.

Consider which types of spaces you want in your private dental practice. Does this include a waiting area? A reception area? These are all things to decide before scouting locations. 

It’s a good idea to do some research about other dental practice layouts so you can begin to envision your own space. Look for accessible areas that are within your budget and surrounded by your target patients. Avoid sites that are overly saturated with practitioners offering the same services.

Be aware of the average costs

The typical range of costs to start a dental practice is between $350,000 and $550,000.

One of the most significant factors is the related real estate costs. If you build in a lower-cost area, you can reduce costs by 20% or more. That being said, you need to make sure that the region you select is in line with your goals. Your future success is partially contingent on your choice of area, so you want to be sure you’re choosing a region with high growth potential or a previously untapped clientele.

Another critical factor is your square footage. Of course, if you want to save money, you could build a smaller office. But just as you did with location, you want to make sure your office’s size can accommodate your goals. Are the savings worth it if you can’t properly practice in a way that meets your standards or if you leave yourself no room for growth?

Consider a partner or buying the practice of a retiring dentist

Teaming up with a partner is an excellent way to offset the costs and risks of starting a private dental practice. Of course, the flip side is that it can be hard to find someone that shares your vision. Work closely with your existing network to decide if there is another dentist you can trust and work very closely with for the foreseeable future. Buying into an existing practice may allow you to walk into an existing book of clients’ day one.  

Consider maintaining an associate position as you grow your practice

It can take some time for a practice to get off the ground. Maintaining an associate position at another practice, even if it is just a day or two a week, gives you the chance to predict cash flows and pay bills. It also buys you time to build up new patients through advertising and word of mouth. You can reduce the days as an associate at another practice as you add days to your workload.

Securing Financing and Licensing

As you work towards a business plan, one question remains: how will you finance your new practice? There are many options available to experienced dentists, but it is important to know what to expect before you submit a loan application. Investigate any loan options equipment vendors may be able to offer you along with what your local lender can do regarding real estate financing and working capital needs.

Secure a loan

As you would with a home mortgage, aim for a longer loan term. Lower payments give you much more wiggle room as you are growing your revenue. As your practice takes off, you can pay down your loan in advance, but be sure you will not incur prepayment penalties.

You can pay down most loans penalty-free after three to five years. Consider conventional, SBA, or USDA financing options.

Consider the interest rate

Commercial loans can be fixed-rate loans or adjustable-rate loans with prime or other rate indexes. Payments may initially be lower with an adjustable-rate loan, but those rates will eventually rise. If the current market is in your favor, try to lock in a reasonable rate for the next seven five to 15 years.

Be responsible with finances

Be extra diligent about maintaining sound finances. That includes maintaining a high level of creditworthiness and being sure not to overextend yourself with debt.

It is a good idea to have a business plan with a financial section, where you can establish professional goals and lay out the potential costs of the growth required to meet those goals.

Secure licensing

One of the final steps is to secure the necessary permits and licenses to practice in your area. The laws and regulations vary from state to state, so be sure to set aside time to do your research and leave budget and time aside to obtain permits and licenses before opening.

You should also determine if you need to register with the DEA. Any dentist who plans to prescribe substances in Schedules II, III, IV, or V must do so. You must also select a legal structure for your business and register for state and local taxes.

Sign a lease

Dentists typically sign a ten-year lease to start. That may seem long, but it locks in your monthly rent and helps you avoid rent increases. Some landlords are open to offering discounts or free rent for the first few months, which is how long construction can take. Also, inquire about leasehold improvement reimbursements that landlords may offer you for improving the property.


No matter where you are in your career, you may ultimately decide that private practice is right for you. The sooner you start to research and build relationships, the better off you will be. Take this time to meet potential partners, research lenders, and educate yourself on the costs associated with a dental practice. Then, when you’re finally ready to pull the trigger, you’ll have everything you need to be successful.

Thinking About Starting a Business?

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Rene Flores

When it comes to commercial lending, nothing beats first-hand knowledge of the local market. It is important to craft a business plan that allows business owners to succeed and scale, and that kind of long-term thinking only comes with years of market knowledge. With almost a decade of work in the Central Texas market, I am able to provide my clients with direct insights into the markets they hope to capture.

As a member of the Round Rock City Council, I am afforded a unique viewpoint on how local businesses impact our communities. I work closely with each client to ensure the successful launch of their business – including helping them navigate the underwriting process – but my real values lies in future-focused strategic planning. Thanks to the community of Round Rock, I am able to see the demands a community places upon businesses as they scale. As a result, I work to put my clients in the best possible situation to succeed both now and in the future.

In my free time, my family and I donate our time to assist local non-profits such as the Round Rock Rotary Club and the El Amistad Club. My role as both an elected official and a commercial loan officer has shown me the importance of building sustainable communities, and I’m grateful for the opportunities to impact the long-term health of Round Rock, Texas.