How Much Does It Cost To Buy a Dental Practice?
If you’re considering buying a dental practice instead of building one from the ground up, you’re making a smart move.
Starting from scratch can cost anywhere from $400,000 to $600,000 or more, and that’s before you even factor in the time and effort required to set up your business structure and navigate all the regulations. It can be a long, exhausting process.
When you buy an existing practice, a lot of that heavy lifting is already done. Sure, there’s still paperwork and legal steps, but it’s a much faster and smoother path to owning your practice.
Now, let’s talk numbers.
Whether you’re just getting started or looking to expand, we’ve broken down the typical costs into three categories—entry-level, mid-range, and high-end investments—so you can figure out what best fits your budget.
How Are Dental Practices Priced?
First things first, let’s look at how dental practices are priced.
When it comes to buying a dental practice, the price is usually tied to the practice’s gross receipts. On average, a practice will sell for around 85% -110% of its gross revenue.
However, that percentage can vary depending on a key factor: net income. What truly matters is not just what the practice brings in, but what you’ll take home after expenses.
Another major component to consider is the value of the equipment. Some practices come with cutting-edge technology like computers, digital sensors, cone beams, and Cerec machines, while others might have older equipment, like a single X-ray machine and no computer records.
Even if two practices have similar financials, the value of the equipment and technology can lead to very different price tags.
So, when looking at how much a dental practice costs, keep in mind that it’s not just about gross revenue. Net income, equipment, and technology all play significant roles in determining the final price.
Now, let’s look at the starting cost to buy a small dental practice.
Cost of Entry-Level Dental Practice
Starting with a smaller practice is often the best choice, especially for new dentists.
It gives you the opportunity to build strong, lasting relationships with patients in your community without the financial stress of managing a larger operation right away.
An entry-evel practice is perfect for:
- New dentists looking to establish themselves locally.
- Those who prefer a more personal, community-centered practice instead of expanding to multiple locations.
- Buyers working with a smaller budget.
The cost to buy an entry-level dental practice typically falls between $600,000 - $800,00, depending on factors like location and the quality of the equipment. This price usually includes basic equipment, patient records, and some working capital.
However, if you plan to offer specialized services that require advanced technology, like digital scanners or specialized imaging machines, the cost can be higher  .
Entry-level practices are often located in suburban or small-town areas, where the patient base may be smaller, but loyalty can be stronger due to the personalized care you provide. These types of practices are ideal for dentists who want to become a central part of the community.
In terms of staffing, you’ll typically need just a small team—a dental assistant and a receptionist. However, if your budget is tight, it’s common to have one person handle both roles.
One potential challenge to consider with entry-level practices is competition. If a new practice opens nearby, it could impact your patient base, which is something to keep in mind when choosing a location.
Cost Of Mid-Level Dental Practice
A mid-level dental practice offers more comprehensive services and typically has a larger patient base than an entry-level practice.
It’s a good choice for experienced dentists who are ready to grow or groups of dentists looking to co-own a practice.
A mid-level dental practice is ideal for:
- Experienced dentists seeking to expand.
- A group of dentists forming a partnership to offer a wider range of services.
- Dentists with sufficient capital or those looking to share the investment.
The cost of a mid-level dental practice generally falls between $1,100,000 and $1,600,000.
This price range varies based on location, patient base, and the quality of the equipment. Practices with advanced technology—such as digital scanners and modern imaging equipment—often come with higher price tags.
For example, a practice in a suburban or urban area with good equipment could cost around $800,000, while one with older equipment might fall closer to the $500,000 range.
Staffing and overhead also increase at this level, as you’ll need multiple treatment rooms and a larger team, which might include dental hygienists, assistants, and administrative staff. Partnering with other dentists can make the investment more manageable, with each partner contributing to the upfront costs.
Cost of High-Level Dental Practice
A high-level dental practice is often a great choice for dentists or dental groups with significant capital, especially if you’re looking to acquire a well-established practice or reduce competition by purchasing a competitor.
These practices are typically larger, with multiple operators, advanced technology, and a strong brand reputation, which can significantly drive up the price.
The cost for such a practice generally starts around $2 million and can reach up to $3 million or more, depending on factors like location, equipment, patient base, and revenue.
Practices with revenues between $3 million and $10 million often sell for over 5 times their adjusted cash flow. Additionally, larger practices may include intangible assets such as goodwill, brand recognition, and established referral networks, which further increase the price.
Before making such a large investment, It’s important to consult an experienced dental CPA or a financial advisor with experience in dental practice acquisitions to help you navigate the complexities of evaluating such a large investment.
They can ensure you properly assess the value of both tangible assets (like equipment) and intangible ones (like the practice’s reputation and patient loyalty).
Need Help Buying Your Dental Practice?
Getting started with buying a dental practice can feel overwhelming, but the first step is to explore what’s available.
We recommend browsing a few online brokerages to get an idea of the typical costs and available practices:
Once you have a sense of the market, it’s time to start thinking about your budget, cash flow, and financing options—and that’s where we come in.
At Core Advisors, our experienced dental CPAs and wealth managers specialize in helping dentists start, buy, and expand their practices. We’ll review your overall financial picture, considering both your business and personal wealth, to help you create a solid plan that ensures a strong return on your investment.
Ready to get started? Head over to our Getting Started page to book an introductory call and see how we can help.
While you’re at it, check out our popular article on what profit margin you can expect when running a dental practice.
Until next time!
