Guide to Starting a Dental Practice

If you've worked as a dentist for a while, you might be considering the next big step—starting your own practice.  Owning a dental practice requires balancing patient care with  the operational and administrative tasks of running a business. While this can seem overwhelming, breaking down the process into manageable steps can make it feel much more achievable. In this guide, we'll outline the key considerations and steps in starting your own dental practice.

Key Considerations

• Starting your own dental practice can mean more autonomy, financial opportunity, and greater control over the patient experience, but there are also risks to consider when shifting to self-employment. 
  
• During the planning stages, it’s important to outline your career goals, create a detailed business plan, and understand your current financial picture. 
  
• A dental practice can be expensive to open, but financing tools like small business loans or taking on investors are viable options to consider to secure funds.

Why start your own dental practice?

The “why” behind opening a dental practice is different for every dentist, but there tend to be common motivations, which include:
 

• A desire for more autonomy: When you work under another dentist, you're often bound by their processes and standards of care. Running your own practice means you have full control over every aspect of patient care, from the way you treat patients to the policies and procedures you implement. 
  
• Financial opportunity: As an employee, your income is limited to your salary. Owning your practice allows you to earn a salary and take a share of the profits. While you’ll likely reinvest much of your earnings back into the business in the first few years, the long-term financial benefits can be substantial. 
  
• Control over the patient experience: When you own your practice, you control the end-to-end patient experience, including how you market and sell to your target audience, who that target audience is, and how their experience is in the office. You are in complete control of how your patients are treated and can implement ideas that make your dentist's office stand out from the rest.

Steps to starting a dental practice

If these benefits resonate with you, here are the steps you'll need to take to start your own practice.

Outline your career goals

As you've progressed through dental school and your early career, you've probably formed a vision of what you want your future to look like. Whether you aim to specialize in a specific area of dentistry, build a multi-location practice, or create a community-focused office, defining your career goals will help guide your decisions as you start your practice.

For example, if you want to focus on a specific dental specialty, like orthodontics or cosmetic dentistry, you'll need to consider how that impacts your practice's setup, marketing, and patient base. Alternatively, if you're passionate about mentoring new dentists, you might want to create an environment that fosters learning and growth.

Choose whether to start from scratch or acquire an existing dental practice

There are two main routes to opening a dental practice: starting from scratch or buying an existing one. Each option has its pros and cons, depending on your goals.
 

• Starting from scratch: Starting fresh allows you to build your practice exactly as you envision it without inheriting any existing issues. However, you'll need to build a patient base from the ground up, which can take time. 
  
• Acquiring an existing practice: Buying an existing practice means you’ll have an established patient base and existing staff from day one, which may make it easier to make the transition financially. However, you'll need to carefully evaluate the practice's current reputation, financial health, and any operational challenges to ensure you won’t inherit existing issues that may impact your success.

Ultimately, the route you choose depends on your goals. For example, if you’re aiming to establish a cutting-edge practice with the latest technology and procedures, starting from scratch might be the better option. On the other hand, if you’re eager to get started with an existing patient base and infrastructure, buying a practice could save you time and effort.

Create a detailed business plan

Your business plan is the roadmap for your practice. It outlines your goals, the market you plan to serve, and how you’ll operate. A comprehensive business plan should include:
 

• Market analysis: It’s important that you identify your target market and assess local competition. What services are similar dentist’s offices providing? How will you differentiate your practice? For example, if you're in an area saturated with general dentists, offering a specialized service like pediatric or senior dentistry could set you apart. 
  
• Pricing strategy: Outline how you’ll set prices for each service you offer, which should include what insurance plans you’ll accept and how you’ll handle out-of-pocket payments. 
  
• Marketing plan: As you create your marketing plan, consider if you’ll focus on digital marketing, physical marketing like mailers, local community events (or a combination), as well as the costs associated with each. 
  
• Financial projections: Forecast and outline your monthly expenses and expected revenue. This includes every business expense you’ll incur, from rent and utilities to salaries and supplies. Be realistic about how long it might take to reach profitability, and make sure you have a plan for managing cash flow during the startup phase.

If you’re not sure what to include in a business plan, the American Dental Association offers a business plan template for purchase, or you can reach out to a business attorney who specializes in dentistry.

Obtain financing

Starting a dental practice requires a significant upfront investment. From leasing space and purchasing equipment to hiring staff and covering initial operating expenses, you'll need a substantial amount of capital. While some dentists have savings set aside, many will need to seek financing.

• Dentist loans: A dentist loan is a specific loan designed for dental professionals that can cover everything from equipment purchases to working capital. For example, BHG Financial provides dentist loans with  fixed interest rates, generous repayment terms of up to 12 years,¹ and funding amounts up to $500,000^1,2  — all designed specifically with dentists in mind. 
  
• Personal savings: If you’ve been saving for this moment, now’s the time to put that money to work. However, be cautious about dipping into retirement accounts like a 401(k), as there are short-term and long-term financial consequences. 
• Investors: If you're planning on creating a larger practice or multi-location business, you might consider bringing on investors. This can provide additional capital but may also mean giving up some control over your practice.

When seeking financing, it's essential to have your business plan ready, as lenders and investors will want to see that you've thought through your strategy and understanding the financial aspects of running a practice.

Officially set up your business

With your business plan and financing in place, it’s time to navigate the legal steps to establish your practice. Consider the following.
 

• Decide on a legal entity: Decide on the structure of your business, whether it’s a limited liability company (LLC), S-corporation, partnership, or sole proprietorship. Each has different tax implications and levels of personal liability. 
  
• Apply for an Employer Identification Number (EIN)/Tax ID: Apply for an EIN from the IRS, which you’ll use for tax purposes and when dealing with vendors and employees. 
  
• Explore insurance: You may need a range of insurance policies to protect yourself, your business, and your employees. Look into various types of insurance, including malpractice, liability, and workers' compensation. 
  
• Secure the right licensing and permits: Depending on your location, you’ll need to comply with state and local regulations, which might include health department permits, zoning approvals, and a business license. If you’re starting a practice in a city with strict zoning laws, you might need to bring in a local attorney to ensure your location is compliant before you open.

Find the right space

The location of your dental practice can significantly impact its success. Work with a real estate agent who understands the specific needs of a dental office, such as patient accessibility, parking, and space for specialized equipment. Specifically, consider the following as you search for your ideal office space.
 

• Budget considerations: Ensure the rent or purchase price fits within your financial plan. You’ll also need to factor in the cost of renovations, utilities, and ongoing maintenance.
• Compliance: The space must meet healthcare compliance standards, including proper sanitation facilities and accessibility for patients with disabilities. 
  
• Size and layout: Consider the flow of patient traffic, the number of treatment rooms you’ll need, and space for administrative tasks. If you plan to expand your services in the future, choose a location that can accommodate growth.

Hire and train staff

Your staff is the backbone of your practice, so it’s crucial to hire the right people and provide thorough training. Think about how to staff the following teams for your practice.

• Administrative staff: Unless you plan to handle it yourself, you’ll need someone to manage patient scheduling, billing, and insurance claims. Look for candidates with experience in healthcare administration and strong customer service skills. 
  
• Clinical staff: Depending on the size of your practice, you may need dental hygienists, dental assistants, and possibly another dentist. When you find the right team, ensure they are well-trained and aligned with your practice's philosophy of patient care. 
  
• Support team: Also consider the professionals you’ll need outside the office, such as a bookkeeper, accountant, and marketing specialist. These experts can help manage the financial and operational aspects of your practice, freeing you to focus on patient care.

Launch and grow your dental practice

With everything in place, it’s time to open your doors. The launch phase is critical for building your patient base and establishing your practice in the community. In the first weeks and months post-launch, focus on:
 

• Marketing your practice: Before you open, make sure your marketing efforts are in full swing. This might include online advertising, social media campaigns, and local community events. A grand opening event can also be a great way to introduce your practice to the community. 
  
• Patient retention: Once you start seeing patients, focus on delivering exceptional care to build loyalty. Word-of-mouth referrals are incredibly valuable, so maybe consider a referral program
• Monitoring and adjusting: Regularly review your practice’s performance against your business plan. Are you meeting your financial projections? Is your patient base growing as expected? Be prepared to adjust your strategy as needed. For example, if you find that certain marketing strategies aren’t bringing in new patients, it might be time to pivot to different tactics, such as  partnering with local businesses.

How BHG Financial can help you open your dental practice

BHG offers highly specialized commercial financing just for dentists up to $500,000^1,2, which you can use to acquire an existing dental practice or start a brand-new business. With repayment terms of up to 12 years¹, you can start your business affordably with low monthly payments. Our dedicated concierge service understands the needs of the dental industry and works around your schedule -- you can rely on our team to serve your needs every step of the way.

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