You’re ready to take the leap- from dental associate to practice owner. Maybe you’re planning to buy an existing dental practice. Or maybe you’re building one from scratch and designing it exactly how you want.
Either way, the questions start stacking up fast: How much do I need to borrow? What kind of business entity should I create? Will I even be able to pay myself in the first year?
At Core Advisors, we work with dentists across the country – many of whom are in this exact position.
The ones who succeed don’t just take the leap.
They build the ramp first.
So if you’re wondering where to start in 2025, here’s a clear, financial-first roadmap to guide you.
Step 1: Know What You Can Afford Before You Fall in Love
The most common mistake new buyers make? Shopping for a practice before knowing their numbers.
The reality is, most lenders will finance between 85% to 100% of a purchase, but that doesn’t mean you should spend to the max. Even with full financing, you’ll need working capital to cover payroll, supplies, rent, and your own income for at least a few months.
If you’re starting from scratch, expect to finance everything – buildout, equipment, marketing, and the months of overhead until your schedule fills up.
We typically recommend budgeting at least $500,000–$700,000 for a basic startup. That number can be higher in urban markets or if you plan to build a multi-op facility from day one.
Before anything else, we help clients model different purchase or startup scenarios: What does the loan payment look like at 6.5% interest? How much cash flow do you need to break even? Can you pay yourself in year one – or will that need to wait?
If you don’t know your numbers, you can’t negotiate well, and you certainly can’t plan confidently.
Step 2: Secure Financing That Matches Your Timeline (Not Just Your Credit Score)
Yes, lenders love dentists. But that doesn’t mean all loans are the same—or that your approval amount is your green light.
Here’s what matters most:
- Loan structure: Is it fully amortized or interest-only for the first year? Scratch starts often benefit from interest-only periods to preserve cash flow early on.
- Term length: A 10-year loan means higher payments but faster payoff. A 15-year term lowers the monthly burden but may cost more in interest.
- Working capital built-in: Does the loan include funds for startup expenses, staff ramp-up, and unexpected costs? If not, you’ll need to negotiate that in.
- Prepayment flexibility: Can you pay it off early once cash flow improves? Some lenders allow it with no penalty – others don’t.
We help clients compare lenders and structure their loans around their real business plan, not just what the bank is willing to offer. It’s not just about what you can borrow—it’s about what you can actually afford to manage as an owner.
Step 3: Choose the Right Business Entity (And Get It Set Up Properly)
Entity formation isn’t just a legal checkbox. It affects how you pay yourself, how you’re taxed, and how much liability protection you have.
Here’s how we advise clients in 2025:
- If you’re going solo or with a spouse/partner, an S Corporation is often ideal. It allows you to pay yourself a salary, reduce self-employment tax, and split additional profits as distributions.
- You’ll likely file as a Professional Corporation (PC) or PLLC depending on your state’s requirements for licensed professionals.
- Even if you’re not ready to run payroll, setting up an S Corp early allows you to plan for it once revenue starts flowing.
- We work directly with dental attorneys to ensure your entity matches your long-term strategy—because changing it later can get expensive.
And yes, you need to set this up before you open the doors or sign any contracts. That includes registering with your state, getting an EIN, and opening business bank accounts.
Step 4: Don’t Wing Your Compensation Strategy
When you’re a W-2 associate, you know what you’re taking home. As an owner, things get more complicated—fast.
You’ll need to decide how and when to pay yourself. Do you draw a salary? Take distributions? What about taxes?
Here’s our general guidance:
- Once your practice generates consistent revenue, we help you set up reasonable owner compensation via payroll.
- Early on, if cash flow is tight, you may draw money informally (a shareholder loan or owner’s draw)—but we build a plan to transition to payroll and distributions ASAP.
- Your compensation plan needs to sync with your tax strategy. That includes estimating taxes quarterly and tracking how much of your income is taxed as salary vs. distributions.
This is one of the most overlooked pieces of ownership, but it’s also where we see the most stress. We help clients put structure in place so there’s no guessing – and no tax-time panic.
Step 5: Build Your Support Team From Day One
Too many dentists try to DIY their way into ownership. But the truth is, you’ll move faster—and make far fewer mistakes – if you build your team early.
Here’s who should be on that team:
- A dental CPA who understands the financial and tax specifics of practice ownership
- A dental attorney who reviews contracts and guides entity setup
- A lender who works with dentists regularly and understands the risk profile
- And if you’re doing a scratch start, consider a practice consultant who can help with timelines, patient acquisition, and office design
We’re not here to sell you fluff or push you into ownership if you’re not ready.
But if you are? We’re here to give you the clearest, most financially sound path to make it happen, with full visibility and support from day one.
Thinking About Practice Ownership in 2025?
2025 might be the year you go from associate to owner. And if it is, we want you to feel confident, not overwhelmed.
At Core Advisors, we specialize in working with dentists who are ready to take that next step.
Whether you’re still in the dreaming phase or already deep into negotiations, we can help you bring clarity to the numbers, structure your strategy, and make sure you’re financially ready for what’s next.
Let’s build your practice the right way—from the very beginning. Simply head over to our Contact page to get in touch with our team. We’re always here to help.
Until next time.
