Starting your own dental practice: Keeping the debt load to a minimum

This year I will reach my 20th anniversary as a practicing dentist. During that time, I have had the opportunity to be involved with four successful practice startups. With the hope of providing encouragement to anyone contemplating a new practice, allow me to impart some of the things I have learned.

Apr 10th, 2015

Kent W. Stapley, DMD

This year I will reach my 20th anniversary as a practicing dentist. During that time, I have had the opportunity to be involved with four successful practice startups. With the hope of providing encouragement to anyone contemplating a new practice, allow me to impart some of the things I have learned.

Today, there is a general consensus that it costs over $500,000 to start a dental practice. Most of that amount is tied up in: (1) equipment, (2) leasehold improvements, and (3) working capital.

When you add $0.5 million to the amount of debt new dentists graduate with these days, you have an extremely discouraging figure.

To dramatically increase your odds for success, I have found that the number one thing you should focus on when starting a practice is to keep your debt load to a minimum! You can realize your dreams of owning your own practice and earning an excellent income if you are willing to do your own homework, rather than allowing your dental supplier to do it for you. To put things bluntly, there is "smart debt" and there is "stupid debt," and you'll need to carefully decipher between the two. Monthly overhead will climb and your personal distributions will shrink if you fail to focus on the debt you are assuming.

When equipping your new office, smart debt involves focusing only on equipment you will actually need to open your doors. A quality patient chair, a good practice management software system, and a reliable autoclave are all good examples of what a budding practice needs. Please don't allow yourself to be sold equipment that is not a "need." A hard/soft tissue laser or a crown mill and digital impression system are all great additions, but does your new practice really need these items on day one? What your new practice really needs is a dependable, positive cash flow that will allow you to confidently purchase this enticing equipment later when you know your business can handle it. You don't do anyone any favors by going out of business.

One of the best ways to keep your equipment debt to a minimum is to purchase items based on value. There are many products out there that don't have the "big name," but still have great quality. An example of this is the DentiMax practice management and digital imaging system. This powerful system is easily comparable to the big-name software programs. Not only do they cost less, but they are "open" systems that allow you to use whatever brand of peripheral hardware and software you desire.

For instance, I bought a great wireless intraoral camera for a great price, and found that it worked seamlessly with my DentiMax practice management software. I also purchased a digital panoramic machine, and it also bridged easily to my DentiMax software. The quality is definitely still there.

The big surprise for me and my colleagues was when we found that the DentiMax digital X-ray sensors took clearer images than my associate's expensive "big name" system! By finding DentiMax, my dental supplier hasn't dictated to me which pieces of equipment I have to buy along with my software. Rather, I have been free to purchase the best technology at the best price.

As for leasehold improvements in my startups, I have kept my debt load to a minimum by employing the following:

1. Find a motivated landlord who will pay all or part of your improvements.

2. Find vacated dental space.

3. Build your office in such a way that you can share space with other professionals or specialists.

4. Keep your office design simple at first, then upgrade as your income allows.

5. Share the same space with another dentist or dental specialist and work opposite hours.

By incorporating these items, you may very well find that you can make that jump to practice ownership without shouldering anywhere near that astronomical $500,000 "ball and chain." I have repeatedly done it and have enjoyed practicing dentistry even more as a result. Remember, your chances for success in dental practice ownership are directly proportional to the amount of debt you end up carrying. Keep that pesky debt to a minimum!


Kent W. Stapley, DMD, graduated from Southern Illinois University School of Dental Medicine in 1995. He has practiced general dentistry in Mesa, Arizona, for nearly 20 years. He currently operates his original solo practice, but has also successfully started and "flipped" three dental practices over the years. He lives in Mesa with his wife and nine children ranging in age from 6 to 24 years old.

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