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Drs. A1 and A2 had practiced together for 25 years in relative harmony. Dr. A1 was age 61 and Dr. A2 was 50. They each owned their own professional corporation and owned their own general dental practice. They shared the office space and had formed a corporation that was owned 50/50 and was used as an operating entity for both practices.
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Annual patient billings for a well-run general dental practice should average $750 per year per active patient. This figure can vary somewhat based on practice demographics, but overall this will apply to most areas of the United States.
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Dr. A owned a successful practice in a nice community. Three years earlier he hired a young dentist as an associate. This young man was a former patient who had known Dr. A for many years. He was a nice young man who seemed extremely grateful for the opportunity to join Dr. A’s practice. Dr. A was thinking about retiring in four or five years and thought the associate would be the perfect candidate to buy his practice from him when he was ready.
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Ask The Experts
The data source for Dentistics is the database of dentists in the U.S. maintained by AFTCO and the demographics are supplied by the U.S. government census bureau, etc.
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Office rent should be in the area of 4% of gross practice gross revenues...
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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.
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