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What should the overhead percentage be for a general practice?

Overhead expenses should be 50% to 55% of annual gross collections for a well run general dental practice if you do not include the doctor's clinical and management compensation. Too many profit and loss reports fail to recognize the practice owner's clinical compensation which should be 25% of annual gross collections (which is what it would cost if you had to hire an associate to do all of the clinical work in a practice); then you should add another 5% of annual gross collections as management compensation (which is what it would cost if you hired a manager to operate the practice). When you recognize the clinical and management compensation as an overhead expense, the overhead percentage should be 80% to 85% of annual gross collections for a well run general dental practice. This leaves a 15% to 20% passive profit margin for this practice, which would be considered ideal. See Less

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Client Testimonials

"Our AFTCO Analyst helped us identify a purchaser that was not only willing and able to purchase, but one that was going to be a great match for the team and the patients. She kept the purchase process moving ahead smoothly."

Mary L. King, D.D.S.
Wilmington, NC

"My AFTCO Analyst's professional and genuine interest in my practice transition made the process very easy. I felt very fortunate to have his guidance throughout the entire process. I would recommend my AFTCO Analyst highly."

John S. Taylor, D.D.S.
Henderson, TX

"I worked with my AFTCO Analyst on a practice where she represented a deceased dentist. My AFTCO Analyst did an amazing job in selling the practice in a timely manner. She is extremely knowledgeable about all aspects of a dental practice acquisition. I would recommend my AFTCO Analyst to anyone who wanted to purchase or sell a dental practice."

Michael L. Greenbaum, D.D.S.
Great Neck, NY

"My AFTCO Analyst was very professional and excellent at explaining everything. The contracts were well written which caused much less involvement to be required from the dentists' attorneys. The transaction went smoothly because of my AFTCO Analyst."

Peter K. Pang, D.D.S.
Asheville, NC