How to Maintain Profitability as a New Dental Practice


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First, Narrow Your Focus

To paraphrase the old adage, you should eat the elephant one bite at a time. Bucket your profitability goals into the areas of your business that have the most growth potential: procedures, new and existing patients, payers and your people. If you attack your profitability goals with these targets, you have a much better chance of achieving your benchmarks. From there, you can dig into the details.

  1. Monitor Your Practice’s “Vital Signs”

Within the categories of procedures, payers, people and patients, there are a few key data points and metrics you should be tracking:

  • Procedures: Be sure your practice management software includes procedure statuses and provides your staff with the information they need to call patients and prioritize them for scheduling. Provide ample education to your staff about best practices for procedure scheduling after a patient has received their diagnosis.
  • Payers: Try to negotiate with your insurance for better rates, adjust your fee schedule, and get rid of the policies that pay the lowest or are the most difficult to pay to enhance profitability.
  • People: The cost of labor is increasing and is the largest expense every dental practice deals with. Your bottom line will likely suffer during periods of flat revenue and high labor costs. To overcome these challenges and continue to build profitability, you must benchmark your compensation rates to industry standards regularly. You can use tools and technology platforms to house this data and analyze it, which will allow you to provide raises that reflect the market and your employees’ performance.
  • Patients: Your existing and new patient lists are essential to growing and maintaining profitability. Here are a few key areas to measure:
    • Current patient count
    • Number of new patients on a monthly basis
    • Number of no-shows or inactive patients in your total patient count
    • Percentage of recalled patients
    • Hygiene department’s reappointment rate
    • Patients’ cancellation rates
  1. Work On Staff Retention and Engagement

By investing in activities to boost staff engagement, you will greatly increase your chances of building and maintaining profitability.

If you acquired an existing practice and have team members who have worked for the business for a while, focus your engagement efforts on ensuring a smooth transition and change-over in leadership.

If you’re starting your practice from the ground up, you can start with a more personalized approach but will need to understand how to scale employee engagement as you continue to build your team. Regardless of what engagement looks like for your practice, remember that healthy staff retention breeds a positive in-office culture, which will ultimately increase top-line profitability.

  1. Know Your Capabilities

If you’re starting a new practice, you may need to prioritize purchasing new equipment and tools, which is a major investment that may not generate financial results for a year or two. On the other hand, if you are acquiring an established practice, you may need to replace your equipment or invest in new procedural technologies. These two situations have very different cost implications and thus very different effects on profitability.

The same concept rings true if you look at profit generation from the patient perspective. If you’re starting up a new practice, you will invest more organic marketing dollars into growing your patient list and your brand. However, if you own an acquired practice, you can afford to invest less in grassroots marketing and instead focus on building your existing patient base.

  1. Think About the Future

Your first five years in business will move quickly and your to-do list will grow by the day. This may prompt you to reprioritize and put time-sensitive tasks and demands above planning for the future. However, your ability to stay profitable beyond the first five years of your business hinges on your progress toward long-term goals.


Let’s say that you generate $500,000 in revenue annually and want to scale to $1 million in annual revenue over the next five years. You need to take tangible steps each year to increase profitability and achieve that goal, while balancing it against evolving tax requirements and staffing needs. And once your practice is firing on all cylinders, you need to pivot your activities to properly scale your business.


These are the steps that an industry-specific dental consultant can help you navigate. A qualified team of CPAs and advisors can run projections and create an action plan that allows you to maintain healthy profitability and achieve long-term success.


If you are interested in connecting with a dental business advisor, speak to your Patterson territory representative about how Patterson Practice Transitions powered by Aprio can help you choose the right lender. Find out more by visiting

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Patterson Dental

At Patterson Dental, we are committed to partnering with dental practices of all sizes to help oral health professionals practice extraordinary dentistry. We do this by living up to our promise of Trusted Expertise, Unrivaled Support every day.


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