How Much Does a Dental Practice Owner Make?

Thinking of buying a dental practice? The first question on the minds of most associates is how much a private practice owner makes.

On average, a dental practice owner in the U.S. makes about $335K per year.

Now hold on, don’t leave just yet! As with other average numbers we’ve talked about recently, the answer without context isn’t really an answer at all. So let’s dig into this one. How much can a dental practice owner expect to make?

How Much Does a Dental Practice Make?

The average dental practice does about $800K in annual revenue in the US. Keep in mind that this is an average: some dental practices are doing a few million, while others are doing $200K.

What is the Average Dental Practice Profit Margin?

The average profit margin of a dental practice is about 38%. The profit margin is determined by taking total collections and subtracting all expenses, then dividing the resultant number by total collections and multiplying by 100 to turn it into a percentage.

Expenses include:

Lab costs
Staff salaries
Facility costs
The cost of dental supplies
Lease or mortgage payments
Overhead
…and any other expense

Example: a dental practice has total revenue (collections) of one million dollars and total expenses of $600,000. The profit margin is:

$1,000,000 minus $600,000 = $400,000. $400,000 divided by $1,000,000 = .4. .4 X 100 = 40. The practice’s profit margin is 40%.

So What is a Private Practice Dentist’s Salary?

The salary of a private practice dentist is collections minus expenses. All the money the practice makes either goes into expenses or into the owner’s salary.

Remember, private practice owners earn an average of $335K. We know this because we know that the average dental practice in the U.S. makes $880,000 per year, and the average practice profit margin is 38%. A bit of simple arithmetic, and voilà, we have our average owner’s take-home pay.

Again, that’s an average number. There are plenty of practices out there with annual collections under $500K; likewise, there are many practices bringing in over $1M a year. And I guarantee that not a single one of successful practice owners feels overpaid ― they all feel (rightly!) like they earned their salary.

Is Owning a Dental Practice Worth It?

Let’s compare an owner’s take-home pay with that of a typical associate.

A dentist can make good money as an associate. If a typical associate takes home, say, 30% of her production, that’s not bad! If that associate dentist is producing $600K of dental work annually, that dentist earns $180K per year. That’s a comfortable living.

And that’s just from practicing dentistry. You know what an associate doesn’t have to worry about?

Advertising and attracting new customers.
Hiring, firing, and managing employees.
Equipment, computers, dental supplies, etc.
Bills, building lease or mortgage.

And the list goes on. So the question may be less “How much does an owner make?” and more “Is it worth it to make the jump to ownership?” And the answer is “Yes! If…” In our hypothetical scenario, our associate is taking home 30% of her production. So making the jump to ownership makes sense for that associate if the practice she purchases has a profit margin over 30%.

This isn’t a given! I know of many dental practices with expenses over 70%, and therefore profits under 30%. It’s all about controlling costs.

For now, let’s go back to something I mentioned earlier, that no practice owner feels underpaid.

Busy practice owners feel like they earned their salary because … well because, frankly, they have. Owners have to consider all of the variables mentioned above, plus many others, to make sure that the practice runs smoothly and the money keeps coming in. But let’s flip the script on that and look at it another way. Yes, ownership comes with a lot of responsibility. But you could just as easily call that “control.” An owner has control over the practice in a way that associates cannot.

Compensation is about more than just money. Control is part of that compensation. If you’re an associate dentist, there are almost certainly things you’d like to change in your practice:

Hours
Schedule
Which patients to accept
Which insurance to accept
Treatment plans
Office/hygiene staff

The only problem? The associate can’t really do anything about it, other than find another practice to work in. The owner, though? The owner makes all of those decisions. For many dentists, this kind of control over the day-to-day operations and culture in the practice is worth as much as or more than the financial compensation.

So, we come back to our original question. Is dental practice ownership worth it? Do owners make more than associates? Do they make enough more that it’s worth all the extra responsibility? The answer is partly a cold, numerical calculation: can you, as an owner, control your overhead and make the practice as profitable as possible?

But perhaps more importantly, does ownership, with all of its freedom and responsibility, seem worth it to you? Does it fit the lifestyle you want?

If ownership is in your future, and I think it should be, then just be sure to find the right practice to buy, and let me know when you’re ready to take that plunge. I’ll help you make it happen.

Thinking About Buying a Dental Practice?

If you’re considering buying a dental practice, there’s a lot to consider. That’s why we’ve developed our dental practice acquisition checklist. It takes you through everything you need to be aware of.

If you want some help, consider working with Dental Buyers Advocates. I’m Brian Hanks, and I help dentists buy practices the smart way.

FAQ on Private Practice Dentist Salary

What kind of dentist gets paid the most?

The kind of dentist that typically earns the highest income is the specialist, such as orthodontists, oral surgeons, and periodontists. These dental professionals undergo additional training and acquire specialized skills, allowing them to command higher fees for their services.

At what age do most dentists retire?

Most dentists consider retirement around the age of 65. However, this can depend on personal preferences, financial stability, overall health, and other factors.

What percent of dental practices fail?

The failure rate for dental practices is relatively low. According to the Small Business Administration, only about 1% of dental practices fail within their first five years of operation. This is significantly lower than the failure rate for other types of businesses, which is typically around 50%.

What is the average career length for a dentist?

The average career length for a dentist can span several decades. After completing dental school and obtaining the necessary licenses and certifications, dentists can have a fulfilling career that extends for 30 years or more. Many dentists continue to practice well into their 60s and beyond.

What dental procedures have the highest profit margin?

Dental procedures that typically have higher profit margins include cosmetic dentistry treatments like teeth whitening, veneers, and dental implants. These procedures often require specialized skills, equipment, and materials, which contribute to their higher costs and potential for greater profitability.

What is the average dental patient worth?

The value of a dental patient can be calculated using the following formula:

Average Annual Value x Lifelong Relationship + Client Referral Value = Lifetime Value

For example, if the average annual value of a patient is $800, the lifelong relationship is 10 years, and the client referral value is $100, then the lifetime value of the patient is $8,800.

Resources for Dental Practice Acquisitions

Here are the different areas where you’ll need to focus. Click on any of the headings to learn more about a specific aspect of buying a dental practice.