Are you a dentist who is thinking about how to start a dental practice, or has recently opened a private practice of your own? If so, you might be clutching your head and wondering if you’ve wandered into deep waters without being fully prepared.
Running a successful dental practice isn’t as simple as setting up shop and waiting for patients to flock to your door. If you want to actually turn a profit as a new dental practice while providing superlative care to your patients and developing a team of committed, loyal team members to support you, you need a step-by-step plan.
The good news is that the Scheduling Institute has worked with thousands of dental professionals in every specialty to help them take their dental practice to the next level—and we can do the same for you.
We’ve even created this helpful dental practice checklist so you can see what needs to be done to get your own practice off the ground and pull in collections beyond your wildest dreams in the shortest time frame possible. Whether you’re buying a dental practice or starting your own, here’s everything you need to know about getting started with practice ownership.
Ready for your new dental practice to start making money? Here’s how:
1. Create a Comprehensive Business Plan
A dental practice is a business, and must be run like one to turn a profit. This means creating a business plan. If you’re applying for financing, this is a critical step to approval. If not, you’ll still need a clear, well thought out business plan to help you set goals and achieve them. Your business plan should include:
- A business overview that lays out the goals for your practice
- Your chosen legal business structure (sole proprietorship, limited liability company, professional corporation, etc.)
- Your proposed business model and organizational structure
- All products and services you plan to offer
- Current market research
- Competitor overview (including pros and cons)
- Your practice differentiators (unique sellings points, or USPs)
- Sales and marketing strategy
- Startup costs and five-year financial projections
Starting your own dental practice is really starting a dental business, and you now wield two roles: dentist and business owner. Starting up a small business is a lot of hard work, so if you want to create a successful practice, really thinking through your business plan is an important first step. Because remember, even if you don’t need major financing, you still need this information to help you set business goals and ensure you are achieving them over time.
2. Choose a Strategic, Suitable Location
The distance people are willing to travel to see a dentist depends on multiple factors: whether they live in a rural or highly populated urban area, which dentists are “in network” for their plan, and need for specialty care.
If your practice is in a metro center, securing the right location is critical. You’ll have to consider local traffic, available parking, demographics of your customer base compared to local demographics, and more. In rural areas, where patients have fewer options, you’ll have fewer rigid parameters to adhere to.
You’ll also have to decide whether to lease or buy your own office. Leasing can be less expensive up front but more expensive in the long run, as your cost per square foot can rise over time. If you lease, you also run the risk of being forced to move in the future—perhaps right when you’ve just managed to get your practice established.
Buying a dental office can be a great long-term decision, but you want to spend time (and get real estate expertise) to ensure it’s an ideal location. Otherwise, you risk a new problem if the location you chose doesn’t work out for one reason or another. It’s easier to not renew a lease than it is to offload an undesirable property.
3. Seek Guidance for Legal Compliance
Different municipalities have different permitting and zoning requirements you’ll have to take into consideration when setting up our dental practice.
If you offer anesthesia/sedation, you may need additional permits. Make sure you investigate the regulations in your chosen area, or seek professional guidance to ensure you’re getting started on a clean slate.
You and everyone who works for you will also need the appropriate licenses, certifications, and training. These range from local and municipal requirements to state and federal mandates.
For dentists, nearly all states require a D.D.S. or D.M.D. degree from a university-based dental education program accredited by the Commission on Dental Accreditation (CODA). All U.S. licensing jurisdictions require licensure candidates to pass the Integrated National Board Dental Examination (INBDE).
Licensing and/or certification requirements for dental assistants and hygienists vary from state to state. All of your staff must hold the correct licensing and/or certification for their position. Practicing without the appropriate licensure can land you in a lot of hot water, so make sure you and your staff are covered and that renewals are always done on time.
Everyone on your team must also undergo mandated training to ensure compliance with HIPAA (Health Insurance Portability and Accountability Act) and OSHA (Occupational Safety and Health Administration) standards and requirements. The U.S. Equal Employment Opportunity Commission (EEOC) also requires that employers periodically provide harassment prevention training to all employees.
4. Buy Comprehensive Insurance
Part of understanding how to start a new dental practice is comprehending the risks involved with running any sort of business, let alone a medical one. You’ll want to consider purchasing insurance coverage for:
- Your premises
- Your business itself
- Your equipment
- Yourself as a medical professional
- Your employees
Starting with a Business Owners’ Insurance policy can help get you started, as it should include general liability insurance and cover your practice’s property and employment practices liability. Additionally, purchasing Entity Malpractice Insurance can help protect yourself against any potential patient claims. With dental practices now a hot target for hackers looking for personally identifiable information (PII), Data Breach Insurance is another plan to consider for your practice. Finally, as an employer, you’re required to have Workers Compensation Insurance in case a staff member is injured at work.
5. Purchase Equipment
All of the equipment required to run a safe, legal, and effective dental practice must be taken into account. You’ll need the following:
- Reception area furnishings (including calming, welcoming decor)
- Administrative furniture, including desks, chairs, and computers
- Dental treatment room chairs, stools, and tools
- Storage shelving and sterilization equipment
- Software for scheduling, billing, accounting, and metrics scoring
If you see patients whose dental care is funded by state or federal programs, such as Medicaid or Medicare, you may need additional software to track those patients, their care, and costs associated with program participation. As for furniture and equipment needs, you may be able to find a practice that is closing down and manage to secure these items at a lower rate than for brand new equipment.
6. Secure Financing
Whether you’re starting a new practice from the ground up, buying a practice right out of dental school, buying into a dental practice, or purchasing an existing dental practice from a retiring or relocating dentist, you’re probably going to need financing. Start-up costs for a new dentist can be tremendous. Financing needs can include:
- Physical space for your dental office to occupy
- Renovations and/or redecorating (don’t skimp!)
- Furnishings for the reception and administration areas
- Dental equipment and tools (including autoclave)
- Ventilation and piping required for on-premise anesthesia and oxygen use
If you’ve been smart with your business finances, you should be able to compare loans from banks and select one, but don’t do this without proper guidance and a solid business plan. Scheduling Institute has the experience and resources to secure the best loans and interest rates to ensure you can manage the costs associated with financing as you grow. Our consulting and coaching services will elevate your practice’s operational capabilities and increase its revenues.
7. Build an All-Star Team
A good team will make or break a dental office. Patients want to see dental specialists who treat them the same as they would their own family. Your practice should present as one big happy family—staff and patients alike.
Start with your front-line staff: the receptionist who greets your patients as they walk in the door and takes their information. Your practice office manager should be confidently on top of everything that’s going on in your office, from the front desk to behind the scenes. Your appointment coordinators need to be passionate about customer service, as they are often a key point of contact with patients.
Payments coordinators should be experts at creating payment agreements and compassionately but firmly handling collections. Treatment coordinators need to be patient and able to break down complex treatment options for patients to understand.
All dental assistants and dental hygienists should be thoroughly trained in manner and language to use around patients. The patient experience must be the all-consuming day-to-day goal of every single staff and support member on your team.
If you’re completing a dental practice acquisition, some or all of the staff may agree to stay on—but don’t count on it. If you’re opening a dental practice of your own, you’ll need to consider staffing needs well in advance of your launch date.
Identify immediate staffing needs and prepare to pay a premium for highly-qualified dental staff—but don’t forget the benefits of training up your own employees. Hiring candidates with high potential and giving them career development opportunities can lead to heightened employee loyalty and low turnover.
Scheduling Institute can help with hiring staff, and provide dental team training that is focused on excellence in patient care and maximizing profits—delivering an incredible ROI in relationship to their salaries and helping you make your practice a success.
8. Determine Pricing
You’ll need to set your pricing at a rate that is competitive among your local competition but still profitable. Owning a successful practice all comes back to having healthy cash flow, after all.
As you build your practice’s reputation, you can raise your prices in sync with your popularity, new demand, and patient satisfaction.
Setting prices is easier if you know the market rate in your local community. Most dental practices operate in a radius between five and fifty miles, depending on the geographic population density, dental office density, and specialty they are in.
Calculating profitability means taking into account direct expenses such as the dentist commission, assistant hours, hygienist hours, lab expenses, and supplies. Then you’ll have to add indirect costs, like overhead and marketing.
Some treatments will be more profitable than others. Some procedures will repeat while others are more likely to be a one-and-done affair. Depending on your target patient base, you can make a list of your most profitable and most frequently performed procedures.
Estimate patient lifetime value (LTV) and how much money you’ll potentially lose when a patient leaves your practice to compare it to the cost of new patient acquisition. (Hint: it’s almost always cheaper to retain a patient than to acquire a new one.)
However, if your practice is attracting only low value patients, it might be time to reevaluate how you are marketing your practice and what other factors are impacting pricing, such as insurance restrictions.
9. Insurance vs Self-Pay
Should your dental practice take insurance? If so, which insurance plans will you work with, and how will you communicate expectations clearly to patients?
For most dental practices, the decision of whether or not to accept insurance hinges on profitability. In some areas, the costs of treating patients on traditional Medicaid or Medicare plans are higher than the permitted reimbursement.
The same goes for many other traditional insurance plans. If most of the patients you see under a specific insurance carrier only require inexpensive treatment with a low reimbursement rate, and your office is responsible for all the paperwork, it might not be worth your while.
If you operate in a larger urban area that has plenty of employers who offer high value dental insurance as part of their employees’ benefits packages, you may find specific insurance plans to be profitable as your patients will build practice loyalty and see you for more than basic care.
Otherwise, it could be best to develop a marketing plan to attract your own private-pay patients who understand the value of high-quality dentistry and are willing to pay for excellence in dental services.
Regardless of what you choose, it’s important that you don’t let insurance become a barrier for potential new patients. At the Scheduling Institute, we offer training to help your staff navigate the insurance conversation with patients to increase new patient numbers all while delivering an exceptional experience for your patients. We also offer consulting services to help you navigate big decisions, such as whether or not your dental practice should take insurance.
10. Develop a Marketing Plan
Your marketing plan should be multifaceted and carefully budgeted for. While word-of-mouth still brings in the most desirable patients, it may take time to build a strong patient referral network.
So when it comes to marketing, start with the basics:
- Have a professional website created
- Set up social media pages on Facebook and Instagram, at a minimum
- Claim your business name and location for Google My Business
- Select a strong practice name, tagline, and logo
Once you’ve established yourself on major digital marketing channels, start developing campaigns. If you don’t know anything about search engine traffic (SEO) and social media advertising, this is where you hire a pro to manage some of your marketing.
Expect to iterate many different versions of ads and to A/B test messaging on website landing pages. Digital marketing can be a process of figuring what the right message is and the best way to get that message in front of the right people (aka, your target market).
In addition to digital marketing efforts, it’s also a good idea to consider forms of traditional marketing. For example, mailers with coupons can be effective, or you might want to consider a short commercial on local radio stations.
Always keep your ideal patient top-of-mind in regard to marketing. You want to attract patients with a high LTV and the willingness to pay out-of pocket for out-of-network services. This means being the solution to more than just their basic dental needs.
Today’s dental patient is less receptive to hardline marketing and more focused on finding accurate information about their dental issues and the best solutions. Focus on providing information-based “soft” marketing delivered via accessible channels, like social media.
More direct sales channels include Google Ads, which can be targeted for specific conditions, specialists, and locations. Internet users are likely to search for terms like “dental implants Denver Colorado” or “orthodontist Silver Springs MD”. A marketer who specializes in paid advertising and search engine optimization (SEO) should be able to set up campaigns and report to you measurable results.
11. Build a Plan That Puts Patients First
Optimizing ads for high-value keywords is useless if you don’t have correctly trained staff in place to respond immediately to any interest. An unskilled inbound phone receptionist can lose you more bookings than they make.
Likewise, poor follow-up when it comes to reminders or patient rescheduling can mean those hard-won patients don’t show up for their appointment, costing you time and money. Patients who do show up need to be greeted and carefully handled by compassionate, engaging staff who make patient comfort their #1 priority.
Long wait times at the office can hurt the patient experience, ultimately impacting your practice and your bottom line. 30% of patients have arrived at their appointment but walked out before being seen or completing the appointment due to a long wait. Additionally, 97% of patients have reported frustration about having to wait too long before seeing their doctor. Those frustrated patients are much less likely to refer friends and family. Mitigating these potential issues boils down to your practice’s efficiency.
Post-appointment care is just as important. Did a patient come in for a root canal or extraction? A personal follow up by phone from the doctor or dental assistant the next day can make a patient feel cared for and important. While dental practices should embrace automation to streamline repetitive tasks in the back office, patient engagement is still an area best handled by other humans. Patients who get individualized care tend to stay loyal to their dentist because they believe they will never find the same attention to detail and personal service anywhere else.
Need Help Getting Started? Partner With the Scheduling Institute
The Scheduling Institute was created specifically for medical professionals, such as dentists, orthodontists, endodontists, chiropractors, and many more.
Whether you’re interested in how to buy a dental practice or how to open a brand new dental office, we’ll help you maximize profits and maintain growth for the future you’ve always dreamed of. Check out reviews from some of our satisfied clients, including those in the dental industry.
Starting up and building your own dental practice is a mighty feat—but you don’t need to do it alone. Schedule your free 15-minute consultation to see how the Scheduling Institute can help you build a successful, thriving private practice—or you get your money back.