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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

"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 was extremely professional, knowledgeable, and wonderful to deal with. I would highly recommend her to anyone I know that is considering selling their pratice. She is a great asset to AFTCO."

William J. Baron, D.M.D.
Rockaway, NJ

"My AFTCO Analyst was very helpful to work with. This was my first purchase of a dental practice and he walked me through the process step by step. He was very knowledgeable about what needed to be done and the sale went smoothly. All the help I received from him during this process was well worth the small fee to me as the buyer. I would have spent far more on a private broker to help with the sale. Overall working with AFTCO made this stressful process much more manageable."

Benjamin L. Byrd, D.D.S.
Kellogg, ID

"AFTCO made the difficult process of selling my practice very simple, and helped me in every phase along the way. My AFTCO Analysts were very nice to work with, were as attentive as could be, and always available to discuss any hiccups along the way. They made everything very simple for me, in other words, THEY did all the work, and this was a BIG bonus for me, as other companies wanted ME to do all the work, and pay them to evaluate my practice. Overall, I would gladly, and enthusiastically recommend anyone I know to work with AFTCO on buying or selling a practice."

George F. Kirkland III, D.D.S.
Durham, NC