Table of Content

    Dentistry business plan for your own dental practice

    Do you want to start a dental office business? If you are a dentist and want to earn lots of money while also serving the society, you should definitely start this business. But before you consider how to start a dentistry business, you must prepare a comprehensive business plan for it. The business plan will help you in acquiring the license for your business from the state and will also help you take important decisions for the startup. In case you don’t know how to write a dentistry business plan, you can take help from this sample business plan of a dentistry business startup named ‘Spear’s Dental Clinic’.

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    Executive Summary

    2.1 The Dental Business

    Spear’s Dental Clinic will be a licensed, registered and insured dental consultancy clinic which will provide all sorts of dental consultancy and treatment services to its customers. The business will be located at a 10 minutes’ drive from the center of Boston and the location is ideal to open dental office.

    2.2 Management of Dental Office

    Spear’s Dental Clinic is a sole proprietorship owned by Dr. John Spear, an experienced dentist from Boston. The company’s main management framework comprises of sales executives, dentists, and nurses.

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    2.3 Customers of Dental Office

    Our customers include people from all age groups such as children, teens, adults and senior citizens but children and teens will form the bulk of our customers since they are most likely to have dental problems.

    2.4 Target of the Dental Business

    Our business targets to be achieved within next three years are as follows:

    Dental Office Business Plan - 3 Years Profit Forecast

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    Dental Office Summary

    3.1 Company Owner

    Spear’s Dental Clinic is a sole proprietorship owned by Dr. John Spear. Dr. Spear is a famous dentist who has been practicing in Boston for more than 6 years.

    3.2 Why the Dental Business is being started

    Dr. Spear decided for dentistry start up to make profits in this industry while also serving the community.

    3.3 How the Dental Business will be started

    Spear’s Dental Clinic will be started in a leased location in Boston which was previously used as a small restaurant. The facility requires a lot of work so that it can be converted into a dental office and the company has already hired William Sons Contractors for this job. In addition to the usual inventory, the procured equipment will include high- and low- speed drills, an ultrasonic scaler (for removing prophylaxis), curing and placing instrument, dental seats and lights, x-ray film, filling material and the front desk equipment. The financial experts have forecasted following costs for the startup:

    Dental Office Business Plan - Startup Cost

    The detailed startup requirements are given below:

    Start-up Expenses
    Legal $55,300
    Consultants $0
    Insurance $32,750
    Rent $32,500
    Research and Development $32,750
    Expensed Equipment $32,750
    Signs $1,250
    Start-up Assets $220,875
    Cash Required $332,500
    Start-up Inventory $32,625
    Other Current Assets $232,500
    Long-term Assets $235,000
    TOTAL ASSETS $121,875
    Total Requirements $245,000
    START-UP FUNDING $273,125
    Start-up Expenses to Fund $151,875
    Start-up Assets to Fund $123,000
    Assets $23,125
    Non-cash Assets from Start-up $18,750
    Cash Requirements from Start-up $0
    Additional Cash Raised $18,750
    Cash Balance on Starting Date $21,875
    TOTAL ASSETS $373,125
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    Capital $620,125
    Planned Investment $620,125
    Investor 1 $0
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    Loss at Start-up (Start-up Expenses) $313,125
    TOTAL CAPITAL $251,875
    Total Funding $255,000
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    Services for customers

    An important part of any start up dentistry business plan is the services it will provide to its customers because the planning of nearly all subsequent things depend on the provided services. Spear’s Dental Clinic will be a licensed, registered and insured dental consultancy clinic which will provide following services to its customers:

    • Dental diagnostics services
    • Dental examinations & consultations services
    • Dental restorative & preventive services
    • Dental treatments including gap removal, tooth whitening, tooth removal and implants

    Patients can make a reservation with us by either visiting our clinic or through our official website.

    Marketing Analysis of dental business

    The most important component of an effective dentistry business plan is its accurate marketing analysis and a good dental practice business plan can only be developed after this stage. If you are starting on a smaller scale, you can do marketing analysis yourself by taking help from this dentistry business plan template or other dentistry business plan examples available online. If you are starting on a larger scale, it is always best to seek the counsel of marketing experts for developing a good dentistry business plan. The success or failure of a business totally depends upon its marketing strategy for business plan which can only be developed on the basis of accurate marketing analysis.Therefore, it must be considered before you develop your dentistry startup business plan.
    Dr. Spear acquired the services of marketing experts to carry out the marketing analysis for his dentistry business plan. He also went through various dentistry business plans available online before developing his own dental clinic business plan.

    5.1 Market Trends

    For learning the market trends of the dental industry, you will have to carry out an in-depth research. You can also take help from this dentistry business plan sample. The dental industry is among those industries who have a high propensity for profit and a very low failure rate. According to the American Dental Association (ADA), dental clinics are the 3rd highest category of the startup businesses which are most likely to survive. Dentists are among the highest earning professionals in the United States and their average income lies in the United States’ highest 8 percent incomes.
    According to IBISWorld, the dentist industry contributes more than $134 billion in the revenue of the United States every year. As of March 2018, there are 187,437 registered dentist clinics in the United States which are responsible for employing around 1,000,000 people. The industry’s growth rate is estimated to be 2.6 percent. This increase is contributed to many factors, of which one is the increase in education and prosperity of the population. The second factor is the increasing trend of dental insurances, due to which, many people became able to afford the dental services. According to a recent report, around 40 percent of the population has private dental insurance. In short, dental industry has a lot of potential and a dental clinic can be immensely profitable provided that you provide quality services and plan as well as market your business successfully.

    5.2 Marketing Segmentation

    Our target market is the residential community-based in Boston. As of 2016, there are more than 673,000 people in Boston which belong to varying backgrounds and most of them are financially stable. Out of the 252,700 households in the city, 20.4% contain children with age below 18 years, 25.5% contain married couples, 16.3% contain a female householder without a husband, and 54.0% are non-families. As per the population distribution, around 21.9% of the population is below 19 years of age, 14.3% are from 20-24, 33.2% are from 25-44, 20.4% are from 45-64, and 10.1% are more than 65 years of age. Analyzing the demographics is important since it gives you an idea of the market segmentation of your future customers. A successful and efficient marketing strategy can only be developed after we completely know our potential customers hence it must be duly incorporated in any dentistry business plan. Our business consultants have identified the following type of target audience which can become our future consumers:

    Dental Office Business Plan - Marketing Segmentation

    The detailed marketing segmentation of our target audience is as follows:

    5.2.1 Children & Teens:

    Our first target group will be the children and teens aged below 19 years. This group is most likely to have dental problems like incorrect or misaligned jaw position, jaw joint disorder, under-bite, overbite, missing teeth, extra teeth, and crowded or crooked teeth. Moreover, due to their unhealthy habits like smoking, excessive intake of sweeteners, oral piercings for wearing jewelry, they are also frequently affected by other dental problems. That’s why this group will be the biggest contributor to our revenue.

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    5.2.2 Adults:

    Our second target group comprises of adults aged above 19 years. This group contains people who are sensible and conscious of their dental health and, thus, seldom encounter a dental problem. That’s why they have the least contribution to our revenue.

    5.2.3 Senior Citizens:

    The third target group comprises of senior citizens. This group, due to its old age, is much likely to be affected by various dental problems like dental decay, gum disease, poor fitting dentures etc. and has, therefore, more contribution than the adults.
    The detailed market analysis of our potential customers is given in the following table:

    Market Analysis
    Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Adults 20% 11,433 13,344 16,553 18,745 20,545 13.43%
    Children & Teens 45% 22,334 32,344 43,665 52,544 66,432 10.00%
    Senior Citizens 35% 12,867 14,433 15,999 17,565 19,131 15.32%
    Total 100% 46,634 60,121 76,217 88,854 106,108 9.54%

    5.3 Business Target

    Our main business targets to be achieved as milestones over the course of next three years are as follows:

    • To become the best dental service in Boston within next five years of launch by providing high-quality services
    • To achieve the net profit margin of $10k per month by the end of the first year, $15k per month by the end of the second year, and $25k per month by the end of the third year
    • To balance the initial cost of the startup with earned profits by the end of the second year
    • To open another dental office in downtown by the end of the third year

    5.4 Product Pricing

    After considering the market demands and the competitive nature of this business, Dr. Spear has decided to price his services slightly less (10% less) as compared to that of his competitors. This pricing strategy has been carefully selected considering many factors, especially the competition provided by established dental clinics in the locality like Neo Dental Clinic. By setting our services in slightly lower range, we hope to target more customers during the initial period of our launch.


    After you have identified the market demand, market trends, and the potential customers of the startup, you must now define an effective strategy for attracting those customers toward you.


    Like marketing analysis, sales strategy is also an important component of a good dentistry business plan and it must be properly developed before thinking about how to open dental office.

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    6.1 Competitive Analysis

    The dental industry is one of the most competitive industries since there are more than 187,000 registered dental clinics in the United States. Boston also houses hundreds of established dental clinics who are providing quality services, especially the Neo Dental Clinic which will be our main competitor in the locality. However, our economical services will be our biggest competitive advantage since our services will cost about 15% less than that of our competitors. Although the residential community in our vicinity is well-established, still, this factor will cause an increase in our revenue by specifically targeting those people who are not covered by any dental insurance. Our second competitive advantage will be our exceptional customer service which, we guarantee, will be the best in town.

    6.2 Sales Strategy

    After carrying out a detailed analysis, our experts came up with the following brilliant ideas to advertise and sell ourselves.

    • We will ensure a strong web presence by using SEO/SEM tactics.
    • We will advertise our dental clinic in health magazines, newspapers, TV stations, and social media.
    • We will arrange seminars and informational sessions in all local schools and other institutions to increase dental awareness among students and other people. These efforts will also result in the promotion of our business.

    6.3 Sales Monthly

    Dental Office Business Plan - Sales Monthly

    6.4 Sales Yearly

    Dental Office Business Plan - Sales Yearly

    6.5 Sales Forecast

    Dental Office Business Plan - Unit Sales

    Sales Forecast
    Unit Sales Year 1 Year 2 Year 3
    Dental treatments 1,887,030 2,680,320 2,588,240
    Dental restorative & preventive services 802,370 815,430 823,540
    Dental examinations & consultations services 539,320 770230 1,002,310
    Dental diagnostics services 265,450 322,390 393,320
    TOTAL UNIT SALES 3,494,170 4,588,370 4,807,410
    Unit Prices Year 1 Year 2 Year 3
    Dental treatments $140.00 $150.00 $160.00
    Dental restorative & preventive services $600.00 $800.00 $1,000.00
    Dental examinations & consultations services $700.00 $800.00 $900.00
    Dental diagnostics services $650.00 $750.00 $850.00
    Dental treatments $2,149,800 $2,784,000 $3,383,200
    Dental restorative & preventive services $120,050 $194,500 $268,500
    Dental examinations & consultations services $50,110 $71,600 $93,000
    Dental diagnostics services $139,350 $194,600 $249,850
    Direct Unit Costs Year 1 Year 2 Year 3
    Dental treatments $0.70 $0.80 $0.90
    Dental restorative & preventive services $0.40 $0.45 $0.50
    Dental examinations & consultations services $0.30 $0.35 $0.40
    Dental diagnostics services $3.00 $3.50 $4.00
    Direct Cost of Sales
    Dental treatments $989,300 $1,839,000 $2,679,700
    Dental restorative & preventive services $66,600 $119,900 $173,200
    Dental examinations & consultations services $17,900 $35,000 $52,100
    Dental diagnostics services $19,400 $67,600 $115,800
    Subtotal Direct Cost of Sales $1,294,100 $1,699,400 $2,104,700

    Personnel plan

    Personnel plan is also an important component of a good dentistry business plan template so make sure to duly consider it before thinking about how to open a dental office. The personnel plan of our company is as follows.

    7.1 Dental Office Staff

    Dr. Spear will act as the General Manager of the company and will initially hire following people:

    • 1 Accountant for maintaining financial and other records
    • 2 Sales Executives responsible for marketing and discovering new ventures
    • 3 Dentists for dental treatments and checkups
    • 5 Nurses for assisting the Dentists and undertaking day-to-day tasks
    • 1 Technical Assistant for managing the company’s official website and social media pages
    • 2 Customer Representatives for interacting with customers
    • 6 Cleaners for maintaining a clean and hygienic environment in the clinic

    All the employees will be hired by following strict testing procedures and will also be trained before onboarding.

    7.2 Average Salary of Employees

    The following table shows the forecasted data about the salaries of the employees for the next three years:

    Personnel Plan
    Year 1 Year 2 Year 3
    Accountant $85,000 $95,000 $105,000
    Sales Executives $45,000 $50,000 $55,000
    Dentists $410,000 $440,000 $480,000
    Nurses $173,000 $180,000 $187,000
    Technical Assistant $87,000 $94,000 $101,000
    Customer Representatives $80,000 $85,000 $90,000
    Cleaners $220,000 $250,000 $280,000
    Total Salaries $583,000 $620,000 $667,000
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    Financial Plan

    After you have prepared the dental office marketing plan and the personnel plan, it is time for you to prepare a detailed financial plan. The financial plan should craft a detailed map of all the expenses needed for the startup and how these expenses will be met by the earned profits. It is recommended that you hire a financial expert for guiding you through all financial aspects needed to open a dental office.

    8.1 Important Assumptions

    General Assumptions
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 10.00% 11.00% 12.00%
    Long-term Interest Rate 10.00% 10.00% 10.00%
    Tax Rate 26.42% 27.76% 28.12%
    Other 0 0 0

    8.2 Brake-even Analysis

    Dental Office Business Plan - Brake-even Analysis

    Brake-Even Analysis
    Monthly Units Break-even 5530
    Monthly Revenue Break-even $159,740
    Average Per-Unit Revenue $260.87
    Average Per-Unit Variable Cost $0.89
    Estimated Monthly Fixed Cost $196,410

    8.3 Projected Profit and Loss

    Pro Forma Profit And Loss
    Year 1 Year 2 Year 3
    Sales $309,069 $385,934 $462,799
    Direct Cost of Sales $15,100 $19,153 $23,206
    Other $0 $0 $0
    TOTAL COST OF SALES $15,100 $19,153 $23,206
    Gross Margin $293,969 $366,781 $439,593
    Gross Margin % 94.98% 94.72% 94.46%
    Payroll $138,036 $162,898 $187,760
    Sales and Marketing and Other Expenses $1,850 $2,000 $2,150
    Depreciation $2,070 $2,070 $2,070
    Leased Equipment $0 $0 $0
    Utilities $4,000 $4,250 $4,500
    Insurance $1,800 $1,800 $1,800
    Rent $6,500 $7,000 $7,500
    Payroll Taxes $34,510 $40,726 $46,942
    Other $0 $0 $0
    Total Operating Expenses $188,766 $220,744 $252,722
    Profit Before Interest and Taxes $105,205 $146,040 $186,875
    EBITDA $107,275 $148,110 $188,945
    Interest Expense $0 $0 $0
    Taxes Incurred $26,838 $37,315 $47,792
    Net Profit $78,367 $108,725 $139,083
    Net Profit/Sales 30.00% 39.32% 48.64%

    8.3.1 Profit Monthly

    Dental Office Business Plan - Profit Monthly

    8.3.2 Profit Yearly

    Dental Office Business Plan - Profit Yearly

    8.3.3 Gross Margin Monthly

    Dental Office Business Plan - Gross Margin Monthly

    8.3.4 Gross Margin Yearly

    Dental Office Business Plan - Gross Margin Yearly

    8.4 Projected Cash Flow

    Dental Office Business Plan - Projected Cash Flow

    Pro Forma Cash Flow
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $40,124 $45,046 $50,068
    Cash from Receivables $7,023 $8,610 $9,297
    SUBTOTAL CASH FROM OPERATIONS $47,143 $53,651 $59,359
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $47,143 $53,651 $55,359
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $21,647 $24,204 $26,951
    Bill Payments $13,539 $15,385 $170,631
    SUBTOTAL SPENT ON OPERATIONS $35,296 $39,549 $43,582
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $35,296 $35,489 $43,882
    Net Cash Flow $11,551 $13,167 $15,683
    Cash Balance $21,823 $22,381 $28,239

    8.5 Projected Balance Sheet

    Pro Forma Balance Sheet
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $184,666 $218,525 $252,384
    Accounts Receivable $12,613 $14,493 $16,373
    Inventory $2,980 $3,450 $3,920
    Other Current Assets $1,000 $1,000 $1,000
    TOTAL CURRENT ASSETS $201,259 $237,468 $273,677
    Long-term Assets
    Long-term Assets $10,000 $10,000 $10,000
    Accumulated Depreciation $12,420 $14,490 $16,560
    TOTAL LONG-TERM ASSETS $980 $610 $240
    TOTAL ASSETS $198,839 $232,978 $267,117
    Liabilities and Capital Year 1 Year 2 Year 3
    Current Liabilities
    Accounts Payable $9,482 $10,792 $12,102
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $9,482 $10,792 $12,102
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $9,482 $10,792 $12,102
    Paid-in Capital $30,000 $30,000 $30,000
    Retained Earnings $48,651 $72,636 $96,621
    Earnings $100,709 $119,555 $138,401
    TOTAL CAPITAL $189,360 $222,190 $255,020
    TOTAL LIABILITIES AND CAPITAL $198,839 $232,978 $267,117
    Net Worth $182,060 $226,240 $270,420

    8.6 Business Ratios

    Ratio Analysis
    Year 1 Year 2 Year 3 Industry Profile
    Sales Growth 4.35% 30.82% 63.29% 4.00%
    Percent of Total Assets
    Accounts Receivable 5.61% 4.71% 3.81% 9.70%
    Inventory 1.85% 1.82% 1.79% 9.80%
    Other Current Assets 1.75% 2.02% 2.29% 27.40%
    Total Current Assets 138.53% 150.99% 163.45% 54.60%
    Long-term Assets -9.47% -21.01% -32.55% 58.40%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.68% 3.04% 2.76% 27.30%
    Long-term Liabilities 0.00% 0.00% 0.00% 25.80%
    Total Liabilities 4.68% 3.04% 2.76% 54.10%
    NET WORTH 99.32% 101.04% 102.76% 44.90%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 94.18% 93.85% 93.52% 0.00%
    Selling, General & Administrative Expenses 74.29% 71.83% 69.37% 65.20%
    Advertising Expenses 2.06% 1.11% 0.28% 1.40%
    Profit Before Interest and Taxes 26.47% 29.30% 32.13% 2.86%
    Main Ratios
    Current 25.86 29.39 32.92 1.63
    Quick 25.4 28.88 32.36 0.84
    Total Debt to Total Assets 2.68% 1.04% 0.76% 67.10%
    Pre-tax Return on Net Worth 66.83% 71.26% 75.69% 4.40%
    Pre-tax Return on Assets 64.88% 69.75% 74.62% 9.00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 19.20% 21.16% 23.12% N.A.
    Return on Equity 47.79% 50.53% 53.27% N.A.
    Activity Ratios
    Accounts Receivable Turnover 4.56 4.56 4.56 N.A.
    Collection Days 92 99 106 N.A.
    Inventory Turnover 19.7 22.55 25.4 N.A.
    Accounts Payable Turnover 14.17 14.67 15.17 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 1.84 1.55 1.26 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0.02 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $120,943 $140,664 $160,385 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.45 0.48 0.51 N.A.
    Current Debt/Total Assets 4% 3% 2% N.A.
    Acid Test 23.66 27.01 30.36 N.A.
    Sales/Net Worth 1.68 1.29 0.9 N.A.
    Dividend Payout 0 0 0 N.A.

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