Buying an Established Dental Practice vs. Starting from Scratch

The decision to start a dental practice is one of the most significant choices a dentist can make in their career. One of the biggest dilemmas is whether to buy an established dental practice or start a new one from scratch. Both options come with unique advantages, challenges, and risks.

Choosing the right path depends on several factors, including financial considerations, risk tolerance, personal and professional goals, and the local market. This article will explore the pros and cons of each option to help you make an informed decision.

Buying an Established Dental Practice

Purchasing an existing dental practice can be an attractive option for many dentists, especially those who want to step into a business that is already running and generating revenue. Below are the key benefits and challenges of buying an existing practice.

Advantages of Buying an Established Dental Practice

• Immediate Cash Flow and Patient Base
• Established Reputation and Brand
• Experienced Staff in Place
• Proven Business Model
• Faster Loan Approval

Immediate Cash Flow and Patient Base

One of the biggest benefits of buying an established dental practice is the immediate access to an existing patient base. Unlike a startup, where you need to build your clientele from scratch, an existing practice already has a steady stream of patients and revenue. This ensures a predictable cash flow from day one, allowing you to cover expenses and even make a profit sooner.

Established Reputation and Brand

A dental practice that has been operating for years often has a strong reputation within the community. Patients already trust the practice, reducing the need for aggressive marketing efforts. If the previous owner has maintained good relationships with patients and provided excellent service, you inherit that goodwill.

Experienced Staff in Place

Buying an existing practice often means inheriting a trained and experienced staff, including hygienists, dental assistants, receptionists, and office managers. This helps ensure a smooth transition and allows you to focus on providing dental care rather than hiring and training new employees.

Proven Business Model

An established practice has a proven track record, making it easier to assess its profitability. You can review financial records, patient demographics, and operational processes to determine whether the business is viable.

Faster Loan Approval

Banks and financial institutions are often more willing to provide loans for buying an existing practice than for a startup. Lenders see established businesses as lower-risk investments because they have historical financial data to evaluate.

Challenges of Buying an Established Practice

• Higher Initial Investment
• Potential for Outdated Equipment or Technology
• Transitioning Patient Trust
• Inheriting Existing Problems
• Limited Customization

Higher Initial Investment

Buying a successful dental practice typically requires a large upfront investment. The purchase price depends on factors such as location, patient base, revenue, and equipment. Some dentists may struggle with securing the necessary financing.

Potential for Outdated Equipment or Technology

Some established practices may have outdated equipment or office management software that needs upgrading. Modernizing the practice can be costly, adding to the financial burden.

Transitioning Patient Trust

Patients may have strong loyalty to the previous dentist, and some may leave the practice when ownership changes. It is essential to handle the transition carefully by reassuring patients and maintaining service quality.

Inheriting Existing Problems

An existing practice might come with hidden problems, such as poor financial management, high overhead costs, or an inefficient team. If the previous owner was struggling with profitability, you might inherit those same challenges.

Limited Customization

When buying an existing practice, you may be limited in making major changes to branding, location, and office culture without disrupting existing patients and staff.

Starting a Dental Practice from Scratch

For dentists who prefer complete control over their business, starting a practice from scratch can be an appealing option. However, it comes with its own set of challenges and risks.

Advantages of Starting a New Dental Practice

• Full Control and Personalization
• No Inherited Problems
• Modern Equipment and Technology
• More Affordable in the Beginning
• Building a Unique Brand and Reputation

Full Control and Personalization

When you start your own practice, you have the freedom to design and build it exactly the way you want. You can choose the location, office layout, technology, branding, and service offerings that align with your vision.

No Inherited Problems

Unlike buying an existing practice, you don’t inherit any financial issues, staffing problems, or outdated processes. You can establish your own workflow and implement best practices from day one.

Modern Equipment and Technology

A startup allows you to invest in the latest dental technology, including digital imaging, laser dentistry, and modern practice management software. This can improve efficiency, enhance patient experience, and set your practice apart from competitors.

More Affordable in the Beginning

Although starting from scratch requires initial investments, it can be more affordable than buying an existing practice. Instead of a lump-sum purchase, you can gradually invest in equipment, staff, and marketing as the business grows.

Building a Unique Brand and Reputation

A startup gives you the opportunity to create your own brand identity. Whether you want a family-friendly atmosphere, a luxury dental spa, or a high-tech modern practice, you can shape your reputation from the ground up.

Challenges of Starting a New Dental Practice

• No Immediate Revenue
• Difficulty in Attracting Patients
• High Marketing and Advertising Costs
• Securing Financing Can Be Harder
• Operational Challenges

No Immediate Revenue

Unlike buying an established practice, a startup does not have an existing patient base, meaning you will have zero revenue at the beginning. It may take months or even years to reach profitability.

Difficulty in Attracting Patients

Gaining patient trust and loyalty takes time, and you will need an effective marketing strategy to build awareness. Competing with established dental offices in your area can be challenging.

High Marketing and Advertising Costs

Since you are starting from scratch, a significant investment in marketing is necessary. This includes digital marketing, social media, website development, local advertising, and community engagement efforts.

Securing Financing Can Be Harder

Banks and lenders see startups as riskier investments because there is no financial history. You may need to provide a solid business plan and personal financial guarantees to secure funding.

Operational Challenges

Managing all aspects of a new dental practice—from hiring staff to setting up insurance billing—can be overwhelming. Many dentists struggle with the business side of things, which can lead to burnout.

Which Option is Better?

The answer depends on your individual goals, financial situation, and risk tolerance. Below are some key decision factors to help you determine which path is right for you:

If you want a low-risk, stable income with a ready-made patient base, buying an existing practice is the best choice. However, if you prefer building your own brand and practice from the ground up, then starting fresh is the way to go.

Ultimately, your decision should be based on your financial position, career aspirations, and willingness to take risks. If needed, seek advice from dental industry consultants, financial advisors, and experienced colleagues before making your final decision.

Final Thoughts

Both options have their pros and cons, and what works best for one dentist may not be ideal for another. Take the time to evaluate your long-term goals and carefully weigh the financial and operational implications before deciding. Regardless of your choice, success will depend on strategic planning, financial discipline, and commitment to patient care.

Frequently Asked Questions

Is dental practice ownership worth it?

Owning a dental practice can be highly rewarding both financially and professionally. It allows dentists to have full control over their work environment, implement their own treatment philosophies, and build long-term relationships with patients. The financial potential is typically higher than that of an associate dentist, as owners can generate revenue through services, staff efficiency, and business expansion. However, ownership also comes with challenges such as managing business operations, handling finances, ensuring regulatory compliance, and maintaining a steady patient base. The decision should be made after careful consideration of one’s willingness to take on business risks and leadership responsibilities.

How much money can you make owning your own dental practice?

The income of a dental practice owner varies significantly based on factors such as location, patient demographics, services offered, and operational efficiency. On average, dental practice owners in the U.S. earn between $150,000 to $300,000 annually, with some specialists and highly successful practice owners making well over $500,000 per year. The ability to scale the practice, offer high margin procedures, and implement effective marketing and operational strategies can significantly boost earnings.

Which dental procedure makes the most money?

High-revenue dental procedures typically include:

• Dental implants – Due to their high cost and necessity for skilled placement, implants are among the most profitable services.
• Full-mouth reconstructions – Combining multiple restorative and cosmetic procedures, these treatments generate substantial revenue.
• Orthodontics (Invisalign, braces) – The demand for orthodontic treatments remains strong, and clear aligners have boosted profitability.
• Cosmetic dentistry (veneers, teeth whitening, smile makeovers) – Elective cosmetic procedures often have high profit margins as they are not insurance-dependent.
• Endodontic procedures (root canals) – These are frequently needed, have high billing rates, and can be efficiently performed in a well-equipped practice.

What is the toughest thing about owning a dental practice?

While owning a dental practice has financial and professional benefits, it also presents challenges such as:

• Business management – Dentists must handle financial planning, marketing, and administrative tasks.
• Staff management – Recruiting, training, and retaining qualified staff can be challenging, as employee turnover impacts patient care.
• Insurance and billing complexities – Navigating insurance reimbursements and claims processes can be time-consuming and frustrating.
• Work-life balance – Many practice owners struggle to balance clinical duties, business responsibilities, and personal life.
• Patient acquisition and retention – Competing with corporate dental chains and ensuring a steady flow of patients requires strategic marketing and excellent service.

What is the average value of a dental practice?

The value of a dental practice is typically calculated as a percentage of its annual revenue, ranging from 60% to 80%. Several factors influence valuation, including:

• Location – Urban practices may have higher demand but also more competition.
• Revenue and profitability trends – A practice with steady revenue growth and strong patient retention will be valued higher.
• Equipment and technology – Up-to-date technology and modern office setups increase practice value.
• Lease agreements and property ownership – Favorable lease terms or owning the office space can enhance valuation.

A general rule of thumb is that a practice generating $1 million in annual revenue could be valued between $600,000 and $800,000, but exact figures depend on market conditions and buyer demand.

Is dentistry becoming oversaturated?

The dental market can be highly competitive, particularly in urban areas where multiple practices operate in close proximity. Oversaturation can lead to lower patient acquisition rates, reduced pricing flexibility, and increased marketing costs. However, rural and underserved areas still offer significant opportunities for new practice owners due to a shortage of dental providers. Dentists willing to practice in these areas often benefit from lower overhead costs, higher patient demand, and potential incentives such as student loan forgiveness programs.

What to look for before buying a dental practice?

Before purchasing a dental practice, prospective buyers should consider the following factors:

• Location – Accessibility, competition, and local demand for dental services.
• Financial records – Revenue trends, profit margins, and overhead expenses.
• Patient demographics – The existing patient base’s age, insurance type, and treatment needs.
• Technology and equipment – Condition and modernity of dental chairs, imaging systems, and software.
• Staffing situation – Retaining existing employees can ensure a smooth transition.
• Reputation and online presence – A strong reputation and digital presence can impact patient retention and growth.
• Lease terms or property ownership – Favorable rental agreements or the ability to purchase the property can affect long-term profitability.

Conducting thorough due diligence and working with a dental practice broker, accountant, and attorney is essential before making a purchase decision.

What percentage of dentists own their own practice?

According to recent data, around 73% of dentists in the U.S. own their own practice. However, this percentage has been gradually declining due to the rise of corporate dentistry, group practices, and dental service organizations (DSOs). Many new dentists are choosing to work as associates due to high student debt, reduced administrative burdens, and a preference for salaried positions. That said, ownership remains a viable and rewarding path for those seeking independence and financial growth.

What is the best passive income for a dentist?

Dentists can generate passive income through several strategies, including:

• Real estate investments – Owning rental properties can provide a steady income stream.
• Dental-related consulting – Offering guidance to new practice owners or teaching continuing education courses.
• Online courses or digital products – Creating and selling dental education materials or webinars.
• Investing in other dental practices – Becoming a silent partner or co-owner in multiple practices.
• Developing dental products – Creating specialized dental tools, materials, or software.
• Stock market and dividend investments – Investing in stocks, bonds, or mutual funds for long-term passive income.

Building multiple income streams can help dentists achieve financial security while reducing reliance on clinical work alone.