Whether you are just leaving dental school or have worked in an existing practice for years, you are considering starting a practice. Starting a dental practice can be extremely rewarding, but it can be costly.
To help you decide whether opening your own dental office is right for you, we share the costs you will need to get it up and running over the course of a year. This is especially helpful for dentists creating business plans for loan applications!
The Start-Up Expenses Of Dental Practices
Dental Equipment
Before getting patients in the door, you will need to have your equipment ready. You will need to purchase a dental chair for every treatment room and a light and computer. You will need several complete sets of dental tools. Other equipment like x-ray machines will also be necessary.
Don’t forget the waiting and reception area! You will need a desk and chair for your receptionist and chairs for your waiting area.
Furniture and equipment can cost new dental practices tens of thousands of dollars. In the past, we have found that most dental practices spend anywhere from $25,000 to $400,000 on their equipment, depending on the vision and type of treatment options that they want to provide.
Hiring Staff
You cannot run your dental practice alone! In your business plan, you will need to estimate the cost of hiring staff like a dental hygienist, dental assistant, and receptionist.
To help you get a better idea of these costs, we have pulled the average salaries for each position from Indeed:
- Dental receptionists: $22.43 per hour
- Dental assistants: $24.57 per hour
- Dental hygienists: $43.41 per hour
Other factors will affect how much you pay your staff, including whether you are providing benefits, the stage of their career, etc.
Finding A Location
One of the highest costs of starting a practice is real estate. You need to find a location for your dental office. Otherwise, you will never get your practice off the ground.
Before you jump into purchasing or renting, you should evaluate the location. Are there many dental offices nearby? How much demand is there for a dental clinic? The future success of your small business relies on selecting a market without too much competition for your new office.
The average dentist’s office has a square footage of 1,500 ft. The average cost per square foot will vary depending on the province and city that you are renting or buying in.
We recommend looking for a smaller office or a business where there was once an existing dental practice. If you sign a lease or buy an office where a previous dentist worked, you will likely be able to save money on renovations.
Getting Insured
If a specific situation arises where a claim has been filed against you, your dental practitioners, or your office, you need to be covered. Professional Liability Insurance (PLI) will cover the high costs of any claims like malpractice.
PLI will cost a few thousand dollars annually, but it could save you millions in the long run. It is essential during the first year of your business, as one claim could make or break the success of your business.
Marketing Your Practice
Too many dentists fail to include marketing expenses in the cost of starting up a dental practice. They forget to include marketing to get the word out, leaving them with little to no new patients. The result is that they have their practice set up and running but no patients to treat.
Remember to include the costs of marketing in your business plan. Professional marketing will run from several hundred dollars every month, but it will help get the word out about your office before you open. Plus, the more patients you attract, the more you will have to pay off your business loan.
What Is The Real Cost Of Opening Your Own Practice?
A dentist will spend anywhere from $200,00 to $1.5 million during the start-up process. Don’t worry! Many banks offer business loans with a low rate to help you afford to open your private dental practice and have some working capital.
We know that starting a new practice can take a lot of work, especially when it comes to finances. Our dental accountants have years of experience helping new and experienced dentists manage their finances. As a result, we can help you understand the real costs you can expect when starting your own practice.
Please call or send us an email today to get in touch with one of our professionals. We are happy to help and offer more tips.
Adam has an MBA from the Richard Ivey School of Business in London and also holds a Chartered Investment Manager designation.
