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Build a Dental Office

Should I buy a practice or do a startup?

By Dimitri LopezLast updated 6 min read

On this page
  1. Key facts
  2. What does each path actually buy you?
  3. How is a practice priced?
  4. What does a startup cost to open?
  5. How do you compare the two over five years?
  6. What hidden costs come with an acquisition?
  7. What hidden costs come with a startup?
  8. Who tends to choose which path?
  9. How FloorStack helps
  10. Free tools for this step
  11. Frequently asked questions
  12. Sources

In 2026, neither path is always cheaper. In one broker dataset of 271 sales, practices sold for a median of 66% of annual collections (ADS South). Startups usually finance $350,000–$500,000 for build-out and equipment, then wait for patients (Curve Dental). Over five years, revenue timing usually decides the winner.

Key facts

ItemFigureSource
Practice sale price ÷ collections (271 sales)63% average, 66% median; two-thirds fell between 52% and 75%ADS South
Goodwill in general dentistry salesabout 52% of annual gross revenueCBIZ
Typical startup financing (build-out + equipment)$350,000–$500,000Curve Dental
All-in startup budget (California example)$300,000–$600,000 or moreDental & Medical Counsel
Leasehold build-out time6–9 months from planning to openingDental & Medical Counsel
Owners among private-practice dentists84.7% (2005) → 72.5% (2023)ADA Health Policy Institute

What does each path actually buy you?

An acquisition buys revenue on day one. ADA News, in an expert column by a practice lender, describes buying as the "fast track" to ownership, with immediate revenue, a patient base and a trained staff, but warns you may inherit outdated equipment, inefficient systems or a team that isn't a fit (ADA News, Nov 2025).

A startup buys control. You design the space, pick the technology and hire the team, but construction, equipment, staffing and marketing costs add up, and patient flow takes time to build. The same column notes that startup owners may need part-time work elsewhere early on (ADA News, Nov 2025).

How is a practice priced?

Brokers most often screen price against collections. In ADS South's 271-sale dataset, the average price was 63% of gross collections and the median 66%, but only seven practices (2.5%) sold at the average, and the full range ran from 22% to 90% (ADS South). The same paper stresses that lenders must see enough cash flow to cover overhead, debt service and the buyer's pay, or the price will not be financeable (ADS South).

Most of that price is usually goodwill rather than equipment. CBIZ, citing the Health Care Group Goodwill Registry, puts average goodwill in general dentistry sales at about 52% of annual gross revenue, and lower in oral surgery (about 44%) and periodontics (about 39%) (CBIZ). Goodwill is the part you pay for and cannot touch, so audit what keeps patients coming back before you sign.

What does a startup cost to open?

Published 2026 budgets cluster in the mid six figures. Curve Dental says most startups qualify for $350,000–$500,000 for build-out and equipment (Curve Dental). Dental & Medical Counsel puts a typical California all-in budget at $300,000–$600,000 or more, with equipment alone at $100,000–$200,000, and recommends a 10–15% contingency (Dental & Medical Counsel). For a line-by-line view, see what a dental startup costs and build-out cost per square foot.

To turn these ranges into a number for your own project, the free build-out cost & timeline calculator (coming soon) is planned to combine square footage, operatory count and region into a budget and schedule.

How do you compare the two over five years?

Price alone is the wrong comparison. Use the same five-year window and put every cash flow on one sheet:

LineAcquisitionStartup
Upfront pricePurchase price (goodwill + equipment + supplies)Build-out, equipment, soft costs, contingency
Revenue in year 1Existing collections, minus attritionRamp from zero
Owner pay during rampUsually from day oneOften reduced; part-time work elsewhere is common (ADA News)
Catch-up capitalEquipment, IT and design you inheritLittle in years 1–5 if new
Time to openClosing timeline6–9 months for a leasehold build (DMC)

A worked illustration, not a benchmark: a practice collecting $800,000 that sells at the 66% median would cost about $528,000. A startup with a $450,000 budget costs less upfront, but it may take years to reach $800,000 in collections. The acquisition wins if the inherited revenue holds; the startup wins if the purchase price is high, the equipment is near the end of its life, or attrition is heavy.

What hidden costs come with an acquisition?

  • Equipment near end of life. Inventory every chair, sensor, compressor and server, with age and service records. The free equipment inventory & appraisal report (coming soon) is planned to track devices, serials, warranties and values in one report.
  • Regulatory paperwork that does not transfer. Under the EPA dental rule, a new owner must file a new one-time compliance report for the amalgam separator within 90 days of the transfer (40 CFR 441.50). DEA registration is location-specific (21 CFR 1301.12).
  • IT you don't control. Confirm you will receive every admin login; see who owns your dental office passwords.
  • Layout you can't easily change. A remodel later brings its own build-out costs and permits.

What hidden costs come with a startup?

  • Ramp-up time. Revenue starts at zero, so working capital must carry payroll, rent and loan payments.
  • Schedule risk. Permitting that starts late is the most common cause of overruns that Dental & Medical Counsel sees (DMC). See how long a build-out takes.
  • Overbuilding. Curve warns that founders who find a space before financing often end up overbuilt relative to their capital (Curve Dental). To test this on your own suite before paying for drawings, the free dream-practice builder (coming soon) is planned for sketching rooms, operatory counts and layouts.

Who tends to choose which path?

Fewer dentists own practices than before: ownership among private-practice dentists fell from 84.7% in 2005 to 72.5% in 2023, and younger dentists reached ownership at lower rates than in 2005 (ADA HPI). ADA News frames the choice by temperament: startups suit dentists who want to build from the ground up, acquisitions suit those who want stability and immediate cash flow, and partnership suits those who prefer to share risk (ADA News, Nov 2025).

How FloorStack helps

FloorStack is a dental build-out platform. For a startup, the Build a Dental Office hub walks through budget, lease and schedule, and the 12-phase roadmap shows the order of operations. For an acquisition, the planned equipment inventory and appraisal report is intended to show what you are really buying. Either way, model the numbers with a lender who sees what a lender-ready budget looks like.

Free tools on the FloorStack dental build-out platform for this step: Build-out cost & timeline calculator (free tool, coming soon), Dream-practice builder (free tool, coming soon) and Equipment inventory & appraisal report (free tool, coming soon).

Free tools for this step

Frequently asked questions

Is it cheaper to buy a dental practice or start one?

Upfront, a startup is often cheaper than buying a large practice. Over five years, an acquisition can cost less if its collections hold, because revenue starts on day one.

What do dental practices sell for?

In one 271-sale broker dataset, the median price was 66% of annual collections, with most sales between 52% and 75%.

How much does a dental startup cost in 2026?

Lenders commonly finance $350,000–$500,000 for build-out and equipment; all-in California budgets of $300,000–$600,000 or more are cited.

What is goodwill in a dental practice sale?

It is the value above the tangible assets, mainly the patient base and reputation. One registry puts it at about 52% of annual gross revenue in general dentistry.

Do permits and registrations transfer when I buy a practice?

Not all of them. A new owner files a new amalgam compliance report within 90 days, and DEA registration is tied to the location and registrant.

Should I get the equipment appraised before buying?

Yes. Ask for an inventory with ages, serial numbers and service records, so you can price replacements into your five-year plan.

Sources

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