Have you ever thought about practice ownership? Perhaps you’ve exhausted all options in trying to purchase a practice and came to the realization that getting the practice of your dreams means having to create it!

While it can be very exciting to be your own boss, the process of starting a practice can also be nerve wracking. Where do you begin? Can you get approved? Does the bank require a business plan and projections? What does the industry landscape look like?

Great questions. First, let’s look at industry trends and challenges.

Industry Trends and Challenges

According to the American Dental Association, there are 170,694 dentists in the U.S., of which: 59% are sole practitioners, 23% are in partnerships with two or more dentists, and 18% are in partnerships with one dentist.

Independent dental practitioners in the U.S. dropped from 100% in 1977 to 59% in 2016. That means that dental service organizations (DSOs) are developing a market share. The ADA Health Policy Institute reports out of the 154,000 dental practices in the United States, 4.6% (7,134) are affiliated with The Association of Dental Support Organizations (ADSO).

In addition to the “DSO effect,” dental student loans are up 210% over the past 20 years, with 32% of dental school graduates reporting more than $300,000 in debt. If that didn’t get your attention, this most certainly will: income for a general dentist decreased by 12% in the past 8 years, while income for specialists decreased by 11% over that same period.

Opening a successful dental practice in 2019 involves a great deal of preparation and dental-specific expertise. A dental-specific team approach is imperative to creating a solid foundation for a thriving practice; from picking the right location (demographics) and negotiating proper terms (lease agreement) to getting the right technology and repayment terms on your loan.


The first step to starting a practice is making sure the funding is in place. An average dental startup loan is $500,000 for general dentists and $550,000 for specialists. The approval amount and what’s actually used can be two different numbers. While dental-specific banks don’t require a business plan, projections or tax returns, it’s recommended to create a business plan and go through the exercise to mentally prepare for becoming the CEO of your business.

Dental-specific lenders are looking for the “Three Cs”: credit, capital and capacity. Does the credit report reflect great payment history? (my fico.com says 29% of applicant scores range from 750-799.) Capital translates to “How much liquidity does an applicant have?” (10% of request amount is ideal.) Capacity speaks to an individual living within their means.

Startup dental loans include funding for (but aren’t limited to) construction, equipment, working capital, and marketing; 100% financing with flexible terms, no required payments during the construction period—often referred to as the “project phase”—and up to 24 months of interest-only payments. Important factors to think about include loan terms, pre-payment, interest rate, and lender service levels, to name a few.

A Team of Advisers

The bank has given you an approval for a whopping $500,000, what next?

When starting a new practice, it’s not uncommon to start speaking with colleagues, friends, and family members, among others. In doing so, you meet many people. As you filter through the advice and relationships you establish, it’s important to team yourself with industry-specific advisers who will help you with the many crucial decisions you’ll make.

Your team of trusted advisers should include a (preferably dental-specific) realtor, building contractor, specialized CPA, dental equipment specialist, lender and an attorney. Working with a team that’s industry specific will make the process move very efficiently, and with advisors working together on your behalf (understanding goals, budgets, timetables, etc.), you’ll be able to focus on marketing and brand awareness for your new office—all the while maintaining your full-time job in the interim!

Staying Within Your Budget

You’re almost there. You’ve secured financing, found a location and signed a lease; what next?

While the construction has just begun, it’s important to maintain a high level of credit-worthiness, stay away from big purchases, and keep your liquidity strong. Stay on budget personally and professionally. Don’t overextend yourself, and make sure to maintain a manageable debt load. Bank approval will include budgets for construction, equipment and working capital; working with the “team” will ensure you’re not making decisions outside your budget parameters.

A Business Plan

One of the biggest keys in preparing for success is to have a business plan. You can get a business plan template from the ADA Resource Center, or from a lender who specializes in working with dental practices.

Advice From Other Dentists

In addition to the business plan, it’s important to learn the business side of dentistry. Speak with experienced dentists who run successful practices, explore what type of business model and practice philosophy you’d like to incorporate in your practice. You may be surprised by a colleague or school alum who had the same anxieties you have about starting a practice, and is willing to share advice. These contacts already live the dream of practice ownership, and can help you save time and money as you begin your journey.


Establish professional and practice goals; short, moderate and long-term. By setting realistic goals, you’ll be able to quantify your successes (or failures). Professional goals can set the bar for a certain number of new patients per week or month, the number of hygiene appointments, a dollar amount for monthly production or collections, and so on.

Having the right team to help guide you through the process is incredibly comforting. But making sure you stay on course during the project and maintain an associate position as you grow your business is equally if not more crucial. Your practice could very well be one of the largest investments you control. If managed properly, it can significantly improve your return on investment and help you secure a dignified retirement.

Bank of America Practice Solutions is endorsed by TDA Perks program. Practice Solutions understands the dental industry; and offers expert guidance, personal attention, and real solutions when you need financing for your practice. Association members receive a 50% reduction in loan administration fees. To learn more about Bank of America Practice Solutions, visit tdaperks.com (Programs: Practice Loans), or speak with a practice specialist at 800-497-6076, and mention TDA member code INA0107A.

All programs subject to credit approval and loan amounts are subject to creditworthiness. Some restrictions may apply. Bank of America may prohibit use of an account to pay off or pay down another Bank of America account.
Bank of America, N.A. provides informational articles for your discussion and review purposes only and not responsible for the information and materials third parties present. Please consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice. Bank of America Practice Solutions is a division of Bank of America, N.A. ©2018 Bank of America Corporation