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How To Start a Private Dental Practice

Starting a private dental practice is one of the most exciting business moves you can make. However, before jumping into private practice ownership, prepare yourself with the information you need to find individual success. Knowledge is key, and going out on your own means not regularly leaning on another doctor’s advice. 

You can find all the necessary steps and essential information about starting a private dental office here, including: 

  • Past non-compete clauses
  • A solid business plan
  • Local market research
  • Access to start-up capital

Review Non-Compete Clauses

First, you may need to square away an area or two before diving into your private dental practice. For example, if you were employed at another dental office, perhaps you signed a non-compete clause. Read the clause closely and familiarize yourself with the specifics. For example, are you not to compete with your current employer within a specific mile range? Are you required to avoid soliciting patients away? 

It’s worth noting that the legal status of these clauses is based on state jurisdiction, and not all states enforce or recognize non-compete agreements, too. But in short, be clear on what you can and cannot do during the term length of the contract. 

Write a Business Plan

Next, create a solid business plan, which includes:

  • Business name, mission, and objectives
  • Outgoing expenses for the company
  • Your target market and customer acquisition strategy
  • Specific products and services offered
  • Costs of products and services you will provide to patients (with and without insurance)
  • Your financial plan and initial annual budget 

While drafting your business plan, research the local market and make sure it has a substantial customer base. “Location, location, location” is cliché, but it makes sense. For instance, can the area you’re interested in handle another dentist, or are there already too many? 

Also, consider the flow of people in and out of the area. Ideal towns for setting up a private dental practice include areas with shopping, cultural events, and restaurants. These are busy places where people can take notice of your practice.   

After choosing a good place for your business, research how to fund your start-up and how much you need to keep it going until you see profits. The average start-up costs for a private dental practice run between $250,000 and $500,000. You could come up with this money in various ways: 

  • Apply for a start-up business loan or financing from a bank
  • Withdraw invested capital from any stocks  
  • Access personal funds
  • Apply for private, federal, or state grants 

Make Your Business Legal

Go through your “legal checklist” and tick off all boxes before opening your doors or pumping too much money into your practice early on. 

Decide on a Business Entity

Legalize your private practice by filing your business as a business entity with local and state government agencies. 

Depending on your business plan and goals, you can choose from a few options:

  • Sole Proprietorship
  • Partnership
  • Limited Liability Company (LLC)
  • Corporation

Each of these entities carries legal responsibilities regarding tax options, lawsuits, and financial losses. Therefore, consider the benefits and downsides to each when determining which is in your best interest. 

After you’ve decided on which legal entity is right for you, apply for an employer identification number from the IRS.

Business Permits 

Your business can’t legally operate without the necessary permits that comply with city ordinance regulations. If you bypass this step, you could suffer severe consequences, such as hefty fines or shutting down.

At the local level, you will need to check for business regulations and permits with your town or city hall and county clerk’s office.

Some towns require your building to have a certificate of occupancy (CO) to be up to fire code before opening your doors to patients. A CO ensures that your business meets all building codes, government regulations, and zoning laws.

If you’re renting space, it’s your landlord’s responsibility to handle the CO. However, if you own your space, you must take care of this step. 

Ensure Patient Compliance and Safety Standards

Follow best practices on all safety standards before opening your doors to staff and patients. Stay compliant to avoid legal trouble throughout your practice’s operation.


Your IT systems should be top-of-the-line for handling patient information or communicating with patients, ensuring HIPAA compliance. Violating HIPAA regulations can result in legal ramifications from $500 fines to jail time. When you start drafting a business plan, specify the details on who will set up your systems, what programs you will use, and how you’ll proceed with quality control. 


Your private dental practice will have a few or many employees staffing it, so be sure your working environment is compliant with the Occupational Safety and Health Administrations (OSHA) guidelines. You can save yourself a lot of added financial expense upfront if you are familiar with the policies and implement them while setting up your business. 

Separate Your Finances

Keep your private practice finances separate from personal finances, and set up a separate bank account for your business. The benefits of having individual accounts include:

  • Easier tax filing
  • Asset protection, like your home and vehicles
  • Credit score improvement

Additionally, consider applying for a separate business credit card. 

But suppose you don’t want to use your business credit card for every purchase, and you also don’t have the immediate funds to pay for supplies right away. Another option is using a net-30 dental vendor, allowing you to get supplies for your business and then repay within 30 days interest-free. In addition, working with a net-30 vendor can improve your credit score over time because these vendors report to major business credit bureaus. 

Once you have a financial plan in place, consider if you need an accounting team to manage it. Depending on your practice, you can hire internally for this position or outsource the work.  

Obtain Malpractice Insurance

Insurance policies protect you should something go wrong while in practice. Fortunately, you can combine some insurance policies into one, as many insurance companies will bundle with a Business Owners Policy. 

However, if you cannot bundle your insurance, look for policies such as:

  • General liability insurance: protects against patient claims against your office.
  • Business income insurance: replaces your lost income if your building is damaged and you cannot open for a long time.
  • Business property insurance: helps to protect your space and equipment.
  • Malpractice insurance or professional liability insurance: protects against patient injury lawsuits due to negligence or procedures that went wrong. 

Before You Open Your Doors

Once you have done your due diligence and procured all appropriate insurance, legal documentation, funds, and location, it’s time to settle into your new place. But before you officially start your practice, make the space your own and decorate the way you want. Decorating your office may be a style choice for you, or it can fully extrude your brand. 

Branding may be your best bet because it helps you stand out to your new patients and makes your business look more professional. Branding consists of a theme representing your business across your paperwork, interior, and social media presence. 

But is it worth putting in the effort into branding your business after all of the other upfront work? Absolutely. New patient acquisition can be challenging and competitive, and you want to stand out. 

Launch a Successful Private Dental Practice

In summary, many preparations go into opening your dental practice to set you on the road to success. You want to make sure to arm your business with the correct legal documents, permits, and insurance. You also want to set your brand up for success by cultivating a solid company culture and a safe working environment for your employees. 

These preparations are not a one-time deal. Make changes and tweaks as you see necessary. Maintain consistency and keep compliant in all of these areas of your private dental practice. Patients will notice and remember the care you put into your practice, prompting them to no longer need to shop for a new dental office.

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