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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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Anthony J. Warren, D.D.S.
Alamogordo, NM

"It was a pleasure to deal with my AFTCO Analyst. He made the process as easy as possible and was extremely helpful at every step of the way. My AFTCO Analyst helped me select a practice that would be most suitable for my expectations. I look forward to working with AFTCO again in the near future."

Afshin A. Azmoodeh, D.D.S.
Plano, TX

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Kenneth B. Rundle, D.D.S.
Highland, IN

"Working with AFTCO was great! My AFTCO Analyst was very professional and answered all of our questions. He was readily available for phone calls and really helped us through the entire process. We had a few bumps and my AFTCO Analyst was very accommodating to help us with a work around."

Ashley M. Paschal, D.M.D.
Sunrise, FL