Industry content

How to Start a Dental Practice

Date Posted: 10.05.21

While starting a dental practice can seem overwhelming initially, the benefits of opening a dental practice can pay dividends. Becoming your own boss, managing your own patients, and maximizing profits are highly rewarding and is the definition of true freedom.

Figuring out how to start a dental practice is far from straightforward. Cloud 9 Software is the industry leader in cloud-based specialty dental practice management software, and is one of the top choices among new graduates or start-up practices in orthodontics and pediatric dentistry.  Here’s what you need to know about the steps and cost of opening a dental practice.

How to start a dental practice

How to Start Your Own Dental Practice

Opening a dental office for the first time is daunting. Understand that running your own dental practice means you are no longer just a dentist but a businessperson.

It can take years to repay the initial start-up costs of launching your own practice. This is not for the fainthearted, and you need to be as excellent a financier as you are a dentist.

Follow these steps to begin the process of owning and operating your own dental clinic.

Step One – Establish a Budget

Before you can begin looking at locations and hiring staff, you need to establish a budget. The average cost of opening a dental practice is $25,000, but these costs could be higher depending on where you’re opening your practice or your specialty. Building a dental practice could cost anywhere from $350,000 to $500,000 on average.

Once you’ve assessed your finances, will you be paying your dental practice start-up costs out-of-pocket or securing external financing?

Financing options could include:

  • Bank loans
  • Releasing home equity
  • Credit cards
  • Borrowing from family and friends
  • Finding an investor

Alternatively, you may choose to use a combination of financing options to cover your costs. Figuring out how much does a dental practice cost requires significant planning and research before acting.

Whether you get approved for financing depends on your personal credit score and the quality of your business plan.

Create a business plan

Step Two – Create a Business Plan

Whether you approach a bank for a loan or pay your costs out-of-pocket, a business plan is a defining document that helps to direct and strategize your new venture.

The U.S. Small Business Administration (SBA) offers free online templates to help you fill out your initial business plan. It should cover everything from staffing, cash flow, and attracting new patients.

Before you can create your business plan, you’ll need to take the time to research what you can offer and what the community you want to serve needs. Establish your ideal patient profile now to work out whether your own office is even viable.

Remember, this is a living document that will continue to evolve.

Step Three – Finding a Space

Now you have a plan; it’s time to find the perfect location for your new practice. There are multiple considerations to take into account, including:

  • Traffic – Is your office visible and easy to access?
  • Competition – How many other practices are in the local area?
  • Space – Does your space provide you with the area needed to offer a great dental experience?

Finally, you have to consider the costs. Working out how much does it cost to open a dental office is not only about whether you can afford it but also whether you can generate the revenue needed to turn a profit.

Step Four – Handle the Legal Side

The biggest mistake dental professionals make when opening their own practice is not handling the legal aspects until the last minute.

It can take months to get the necessary credentials to accept health insurance policies and obtain appropriate licensing. You also need to be registered with the DEA and may even need to comply with additional local regulations.

Finally, have you consulted a professional on the legal structure of your business?

It’s best to address these issues the moment you secure a location for your dental office.

Step Five – Purchase Equipment

When opening a dental office, you need to figure out what equipment you need. Securing your supplies can be a lengthy process, so do your research.

Basic equipment, such as masks and chairs, are relatively simple to source, but more advanced equipment may be required, depending on the services you want to offer.

Hire a dental team

Step Six – Hire a Dental Team

Part of knowing how to start a dental practice is hiring the right dental team. This step plays into your business plan.

Smaller operations may require nothing more than an assistant and a receptionist. Opening a dental practice on a larger scale may require additional dental professionals and administration staff.

The personnel you hire will make or break your business.

Considerations Before Opening a Dental Practice

The six main steps for how to open a dental office merely touch upon the fundamentals of going from a qualified dentist to opening the doors of your own clinic.

There are other considerations to account for before making a final decision, including the following:

Start a Practice or Buy an Existing Practice?

Starting a new business from scratch isn’t for everybody. You may also want to consider buying an existing practice.

Figuring out how much to buy a dental practice is key to making the right decision for you. Consider that purchasing a new practice is usually more expensive as everything is already in place, including an existing patient list.

On the other hand, it’s much less work to purchase an existing business.

Are You a Marketer?

Any business owner must wear many hats. Ask yourself whether you are willing and able to market your business. Successful dental practice owners are excellent at branding themselves and attracting new patients.

Regardless of your specialty, dentistry is a hypercompetitive industry, and without a talent for marketing, your business will struggle.

Which dental services will you offer?

Which Services Will You Offer?

Not every dental practice offers the same range of services. When creating a business plan, think about the services you’re qualified to provide, such as:

  • Orthodontics
  • Pediatric dentistry
  • Cosmetic dentistry
  • Prosthodontics

Only the largest practices cover every area. Research the local area and figure out the dental needs of the local community.

Dental Practice Start-Up Costs

To help you understand how to start a dental practice, here’s a breakdown of the main costs involved:

  • Space – $25,000 for an existing office or up to $500,000 to build a new dental office
  • Equipment and Supplies – $190,000
  • Working Capital – $70,000 (but can be lower)
  • Loans – 5% per year
  • Licensing – $600 per year

None of these costs take into account the ongoing costs of credit card processing fees, replenishing clinical supplies, paying your staff, or self-employment taxes. There are also the costs of repairs and insurance policies to consider.

In short, it’s not inconceivable that startup costs could result in a $500,000-$750,000 loan unless you buy an already established practice.

Most costs are also dependent on the location. For example, opening a dental office in California or New York will always be more expensive than starting one in rural Missouri.


These are the steps for how to start a dental practice, but maintaining a successful practice requires innovative solutions.

If you are starting an orthodontic or pediatric dentistry specialty dental office, improve staff productivity, increase efficiency, and minimize workflow within your practice with Cloud 9 Software. Our dedicated practice management software will help you to take your practice to new heights.

To learn more about how Cloud 9’s specialty dental practice management software can support your new practice, request a free demo now.