Various form of money and financial tools

Starting your dental practice can provide you with freedom and flexibility as a dentist to achieve your professional and financial goals. However, this courageous, crucial step in your professional life also comes with its challenges.

One of the major challenges is the financial aspect of your new venture. The high cost of setting up and running a private dental practice in California may seem daunting at first, but this feeling can be mitigated through proper research and planning.

Startup Costs

The American Dental Association (ADA) estimates that dental practices generally require an initial investment of approximately $500,000. This amount may seem low for those who have heard that opening a dental practice can run up to 7 figures, or it may seem high for those who have purchased a practice for $150,000. Nonetheless, it’s a general average to use as a starting point because other factors, like location, can play into the true cost of opening your practice.


Construction is one of the most significant expenses involved in setting up a new dental practice. Prepare to spend around $240,000 on designing your space, getting building permits, and the costs of renovating the space to meet your specific needs, including adding the required plumbing and improvements.

The actual cost of construction will depend on various factors, including the current condition of the building and how large your new space is.

Equipment and Supplies

Set aside about $190,000-$200,000 to purchase the office furniture, dental equipment, and supplies that you will need to provide dental services to your patients. You must also reserve a budget to buy computers, software, and other office supplies for the administration side of your new practice.

Legal Services, Practice Management Consultation, IT, Website Design, and Marketing Services

Startups can spend approximately $50,000 for third-party support services, including hiring a practice management consultant to help you with your growth plan, legal consultation, IT support, marketing, and website design. You will need the services of professionals from these fields to prepare for the launch of your new practice.

Ongoing Monthly Costs

Keep in mind that you will need to continue to finance the monthly operations of your dental practice, even after you complete your initial investment.

Staff Salary

The salary of your dental team and staff is the biggest expense of your dental office. While you are the backbone, you also need the services of dental allied professionals like a dental assistant and dental hygienist, and front office staff such as a receptionist, office manager, and treatment coordinator to operate efficiently.

If you have a big practice, you may even require more than one dental assistant to facilitate faster services for your patients.

While the specific wages in the dental industry may vary per practice, expect that the salary expenses of your dental practice will be roughly equivalent to 25% of your total revenue.

Dental Supplies

Even after you purchase your initial stock of dental supplies, you will constantly need to replenish your supplies as you operate your practice daily. Take note that the more dental services you offer and the more patients you treat, the more often you will need to restock your supplies.

The dental supply expenses will cost around 5% of the revenue of your practice.


If you are not buying a building to house your new practice, part of your operating expenses will include your rent payment, along with common area maintenance expenses which vary greatly between different properties. In addition, you will be required to carry general liability insurance, and possibly other types of insurance under your commercial lease.

Lab Fees, Malpractice Insurance, and Dental Association Dues

Expect to pay for lab fees as your patients increase and your services expand. On average, the lab fees for dental practices amount to 10% of your revenue.

Malpractice insurance expenses are based on the plan you select. It will remain the same every month regardless of the number of your patients, but the cost may increase every year. Take note that you are likely to pay more for insurance costs if you offer specialized services, aside from general dental services.

Dental association dues, license renewals, and continuing education expenses are part of maintaining your dental practice as well. The respective amounts for these expenses are usually constant over the years.

Next Steps

You need to be diligent in financial planning and expense monitoring to effectively launch and maintain a dental practice. Effective planning doesn’t stop with finances, though. You will need to be knowledgeable of dentistry’s legal and business aspects to be successful.

Feel free to reach out to us for help with legal support to start your new dental practice. We concentrate on the legal needs of dentists and provide strategic legal counsel to mitigate risk and empower you with confidence and peace of mind as you start your new venture.