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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

"I found my AFTCO Analyst to be a wealth of information that made the transition seamless."

Anthony R. Bielkie, D.D.S.
Shelby Township, MI

"My AFTCO Analyst and I grew a relationship over several meetings. He gained the trust of my wife and myself over this time. He really took the time and energy to get to know me, my personality, my abilities and goals. Using this, he brought me information on practices that he thought would be a good fit. I really appreciate his diligence and dedication to me throughout the process."

Chapin Densmore, D.D.S.
Kirkland, WA

"My experience with AFTCO was excellent from start to finish. My AFTCO Analyst was very easy to get along with and communication was always open. I would recommend the services of AFTCO for selling your practice."

Robert D. Ruiz, D.D.S.
El Paso, TX