How Much Does a Dental Practice Owner Make?

Brian Hanks General

Question: How much does a dental practice owner make?

Answer: On average, a dental practice owner in the U.S. makes $335,207 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?

We come to our $335K number (we’ll round it to that from here on out) because we know that the average dental practice in the U.S. makes $879,810 per year, and the average practice profit margin is 61.9%. 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 their owners feels overpaid ― they all feel (rightly!) like they earned their salary. To understand why, 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’s $180K in her pocket. 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 overhead over 70%, and therefore profits under 30%. It’s all about controlling overhead. I’ve written about this elsewhere, so I won’t belabor the point, but controlling overhead is vital for making ownership worth any potential headaches.

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

Dental 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.