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Dental Practice Requirements: A Guide for Starting Your Own Practice

how to start a dental practice

You love working as a dentist but would like greater control over how you serve your patients. If you pride yourself on your leadership skills, you could be a perfect candidate for running your own dental practice. In this role, you'll have the opportunity to practice according to your own values and philosophies, all while making a discernible difference in your community.

Launching a dental practice can be exciting, but it's also complicated. Before you even think about booking patient appointments, you'll need to navigate a whirlwind of tax, compliance, and insurance concerns. You'll also need a space in which to practice -- and potentially even financing.

To help you make sense of all this, we've provided an easy-to-navigate guide on how to get started, including some of the most important steps to opening a dental practice.

1. Research & Select a Business Structure

Whether you'd like to go into solo practice, partner with a fellow dental professional, or establish a larger practice (or a system with multiple practices), you'll need to think carefully about your business’s legal structure. Popular options include sole proprietorships, LLCs (limited liability companies), and S corporations. Each approach holds noteworthy opportunities and drawbacks. These relate to tax requirements, funding solutions, and liability considerations.

Many dentists prefer to start LLCs over a sole proprietorship because with an LLC it is harder for a business owner to be held personally liable for something that happens at work. While no substitute for adequate insurance, an LLC can provide some degree of separation between you and your business as an alternative to the more burdensome requirements of forming a corporation. If you're not sure which structure is the best fit for your practice, consult with a business formation attorney, who can help you select the right type of entity and move forward with the necessary paperwork.

2. Define Your Brand & Target Market

While many of the concerns highlighted in this guide involve financial and compliance issues, branding and company culture must also be established. Without these essentials, you will struggle to attract and retain patients. This will also impact your business plan and practice location. Furthermore, your brand will influence who you hire, how your employees interact with patients, and which services you provide.

If you're struggling to define your brand, consider the following:

  • Which types of patients do you most enjoy treating?
  • Which types of patients do your competitors currently target? How can you differentiate your practice?
  • Do you possess any unique qualities or credentials that set you apart?
  • Where are you located? How will demographic trends in your area play into your services?

Develop a patient persona to provide greater insight into your target market. This fictitious individual represents the types of patients you'd prefer to attract to your practice. Future marketing campaigns can be crafted with your persona in mind.

3. Create a Business Plan

A detailed business plan can serve as a blueprint for all future actions you take as a dental provider. It could also play a critical role in obtaining financing. As Dr. Eugenia Prokopets, DDS, MSD, pointed out, most banks will want to see your business plans before giving the go-ahead for a loan.

At a minimum, your business plan should include:

  • Executive Summary: This provides a concise overview of why you want to open a dental practice and how you intend to make it a success. While this will be placed at the beginning of your business plan, you may find it easiest to write it after you've completed the other portions of the plan.
  • Operations Information: What will day-to-day operations look like at your practice? Which types of services will you provide? What about patient flow, office hours, and equipment? This section should delve into details to demonstrate that you've considered every element of running a successful practice.
  • Financial Considerations: Use this section to explain how startup funds will be used, how much you expect to spend on overhead costs, and what your projected profits will be after accounting for these expenses.

4. Get Licensed & Registered

As a dentist, you should already be licensed with your state board. This means graduating from an accredited institution, passing dental licensing exams, and completing a criminal background check. Additional requirements may exist in your state, especially if your work encompasses dental therapy.

Depending on your selected business structure and location of practice, further permits or licenses (such as tax registration) may be required. For example, many dental practices need to register with the Drug Enforcement Administration (DEA), which oversees the use of controlled substances from Schedules II, III, IV, and V within dental practices and other medical facilities.

5. Secure Your Space

Where will you practice dentistry? How will your physical location help you serve your patients and run a profitable business?

You've already identified your target market, but now you need to find a space that allows you to serve your preferred patients. Prokopets recommended working with a commercial real estate broker who "knows the area and… has a medical or dental background."

Prokopets added that this process will need to take place at the same time you develop your business plan. After all, details such as square footage and rent will factor into your business plan. Keep in mind that lease negotiation could take several months. You may also need to hire an architect to develop a floor plan and contractors to bid on that plan. If preferred, you can simplify the process by working with a company that handles both elements in-house.

Be prepared to invest in dental equipment. Determine which items you'll lease and which you'll purchase outright. This may depend, in part, on the role cutting-edge dental technology will play in your day-to-day operations. Many dentists find that leasing equipment allows them to utilize the most current solutions and avoid falling behind in a rapidly evolving industry.

6. Outline Expectations & Policies in a Detailed Employee Handbook

Few resources are more critical for the hiring and onboarding process than your employee handbook. This guide should succinctly communicate your expectations to your practice's staff members. It should also document efforts to comply with federal and local employment legislation.

Be sure to include your mission statement, vision statement, and values. These should explain why your practice exists, what you hope to accomplish in the future, and how you will serve clients according to your philosophy of care.

Other essentials to consider adding to your employee handbook include:

  • An anti-harassment and discrimination policy
  • Dress code and guidance on appearance
  • Information on disciplinary action, including why it might be required and what it would involve
  • Policy for overtime and bonuses
  • Payroll procedures, such as deductions and deposits
  • Details about leaves of absence, such as disability, bereavement, or maternity leave

7. Protect Your Practice With Comprehensive Insurance

Risks abound in the dental industry. Without proper insurance coverage, your practice could be vulnerable to financial harm as a result of anything ranging from property damage to medical malpractice lawsuits.

Before you determine which types of insurance and how much coverage to obtain, consider applicable federal requirements, as well as the laws in your state. In general, you can likely expect to need to obtain the following:

  • Worker's Compensation: If employees are injured on the job, this will supplement their wages as long as they are unable to return to work in their previous capacity. As the National Federation of Independent Business (NFIB) points out, it can also provide an extra layer of protection against lawsuits. Develop a protocol for working with independent contractor dentists or hygienists, who should maintain their own general liability policies.
  • Commercial Property Insurance: Protect your financial interest in physical assets such as buildings or equipment with adequate property insurance. This insurance covers loss of or damage to these assets and is important whether you own or lease the space in which you are situated or the equipment you use. Property insurance policies may also provide business interruption coverage, which protects from lost profits as a result of property damage.
  • General Liability Insurance: You’ll have patients, service providers, vendors, and other people coming and going at your dental office. This translates into potential liability to these visitors from everyday risks, like a patient falling on a slippery floor in your waiting area. As a businessperson, you may also be sued for misleading advertising or libel against a competitor. General liability helps cover your losses due to exposures like these, and is a fundamental component to your risk management strategy.
  • Dental Malpractice Insurance: This protects you from the financial consequences of allegations of professional negligence that resulted in the bodily injury of a patient. Additionally, your malpractice policy can provide coverage for legal defense. Even if you are able to successfully defend your practice against a malpractice claim, the cost of doing so can be prohibitive.

8. Develop a Strategy for Waste Management

Dental waste should be disposed of according to regulations from the Occupational Safety and Health Administration (OSHA). Additionally, the Environmental Protection Agency’s Management Standards for Hazardous Waste Pharmaceuticals have guidelines to consider.

Local standards can differ from state to state, so be sure to investigate these procedures before implementing a waste strategy. For example, discarded dentures are regarded as regulated medical waste in some states, but not in others.

In general, dental waste management means handling the following:

  • Blood-saturated items or contaminated personal protective equipment (PPE): These should be treated as medical waste and kept in red biohazard bags. Dispose of these using clearly labeled mail-back containers.
  • Partially used medications, vials, and capsules without blood: These items can be disposed of in pharmaceutical mail-back containers. Maintain detailed documentation of unused or expired medications.
  • Sharps: Sharps should be disposed of in puncture-resistant containers with leak-proof sides and bottoms. These containers must contain lids or doors that allow them to be fully closed. OSHA mandates that employers "ensure that reusable sharps that are contaminated are not stored or processed in a manner that requires workers to reach by hand into the containers where these sharps have been placed."
  • Developing a strict protocol for mercury waste: This may involve the careful collection of amalgam using tools such as vacuum pump filters or chair-side traps. Mercury waste should never be disposed of in the garbage or down the drain. Instead, work with a licensed recycler who abides by the ADA-ANSI standard.

9. Seek Guidance From Experts

As you look into possible business structures, compliance concerns, or waste management, don't hesitate to seek advice from attorneys, CPAs, and other trusted professionals. Seemingly small errors can hold huge implications for the future of your practice, but thorough guidance is readily available.

"In today’s litigious and complex socio-economic climate, dentists must have a team of experts to guide them in designing and managing a dental practice and creating a positive working environment,” said Belle DuCharme, RDA, CDPMA.

If you need personal inspiration, feel free to ask colleagues to share their experiences with opening and running dental practices. Non-competitors may be willing to act as mentors, who can guide and motivate you in this early period.

Summing It Up: A Little Due Diligence & a Lot of Passion

As you can see, a lot goes into opening a dental practice. Don't be discouraged. With proper legal guidance and insurance protection, you can bypass the most significant risks and feel confident in the future of your clinic. Keep the why at the forefront of your business efforts, and with a little guidance, everything else will fall into place.

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Last updated on Jan 05, 2024.

Originally published on Oct 17, 2021.

The views expressed in this article are those of the author and do not necessarily reflect those of Berxi™ or Berkshire Hathaway Specialty Insurance Company. This article (subject to change without notice) is for informational purposes only, and does not constitute professional advice.

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