Running a dental practice in Colorado or Wyoming requires balancing excellent patient care with the realities of operating a business. At DDSmatch, we work closely with dentists planning practice sales, transitions, or associate searches, and we see how important it is to understand overhead, production, and financial performance long before a transition.
This Article will address
- What dental office overhead includes
- Average overhead benchmarks
- What it costs each year to operate a dental practice
- Average production and hourly production standards
- How hygiene contributes to overall revenue
- The four essential financial reports every office should use
- How overhead and production affect practice value in CO and WY
- When to involve a dental practice broker
What Is Dental Office Overhead and Why Does It Matter?
Dental office overhead includes all recurring operating expenses required to run the practice, excluding owner compensation. These costs include wages, rent, supplies, lab fees, insurance, taxes, and utilities.
For owners preparing for a future transition, overhead is a critical measure. Well managed overhead supports stronger profitability and a higher practice valuation. High or unchecked overhead can limit earnings, weaken buyer interest, and reduce leverage during negotiations.
What Is the Average Overhead for a Dental Office?
According to the 2025 Blue & Co. Survey, average dental office overhead is about 69 percent of net receipts.
Top performing practices operate closer to 66 percent, a small difference that can significantly increase take home income.
Typical overhead categories include:
- Non dentist salaries and benefits
- Dental supplies and lab fees
- Rent and facility costs
- Taxes, insurance, and professional fees
- Utilities and office supplies
Local factors in Colorado and Wyoming, such as wage trends, real estate prices, and PPO mix, often influence where a practice falls within these ranges.
How Much Does It Cost To Run a Dental Office?
General practices report net receipts just over one million dollars per FTE dentist, with average overhead near 720,000 dollars per year.
In other words, a significant portion of annual revenue is required just to sustain operations.
Expenses generally fall into four categories:
- People costs
- Facility and equipment
- Clinical supplies and lab work
- Administrative and professional services
Rising wages, especially for hygienists, are a major contributor to increasing overhead nationwide.
What Is the Average Production for a Dental Office?
Production levels vary widely, but the survey shows:
- Doctor production per hour continues to rise, averaging above benchmark expectations
- Hygiene represents roughly 31 percent of total production
- Hygienists cover their pay by about 2.6 times, slightly below the 3.0 benchmark due to wage increases
These indicators help owners understand whether their production is keeping pace with overhead.
How Much Should a Dentist Produce Per Hour?
Dentists average over 430 dollars in charges per clinical hour, surpassing common benchmarks.
Hourly production directly influences:
- Take home pay
- Overhead percentage
- Practice profitability
- Future valuation
A small lift in production per hour can create meaningful increases in income and transition value, especially when overhead is stable.
What Are the Four Key Financial Reports Every Dental Office Should Use?
Every practice should regularly review the following:
Profit and Loss Statement
Shows collections, overhead expenses, and income before owner compensation. This is the primary benchmark buyers and lenders evaluate.
Balance Sheet
Summarizes assets, liabilities, and equity, essential for financing, buy-ins, and transition planning.
Cash Flow Summary
Reveals when cash actually enters and leaves the practice. With high overhead costs, steady cash flow is essential.
Production and Collections Reports
Tracks production by provider, procedure, and hour. Also includes hygiene production metrics tied directly to survey benchmarks.
What Can Top-Performing Practices Teach Us?
Top performers in the survey show common traits:
- Higher value procedure mix
- Strong production per hour
- Lower overhead ratios
- Consistent monitoring of financial reports and benchmarks
Small operational improvements can create noticeable gains in profitability and make a practice more appealing to buyers.
How Do Overhead and Production Influence Practice Value in Colorado & Wyoming?
When you plan a transition, buyers and lenders look closely at overhead stability, doctor production per hour, and payroll trends. Practices with strong production and controlled overhead typically receive stronger offers and move through the process more smoothly.
Because Colorado and Wyoming markets vary significantly by region, DDSmatch helps owners evaluate local wage trends, rental rates, and competitive dynamics that affect long term value.
When Should You Talk With a Dental Practice Broker?
Many owners reach out too late. In our experience, dentists should begin conversations when:
- They are 3 to 5 years from retirement
- Overhead begins rising unexpectedly
- They plan major equipment or facility investments
- They are considering adding an associate or partner
DDSmatch and Jeremy Keck partner with your CPA, attorney, and financial advisors to support valuations, transition planning, and real estate decisions. These early steps often lead to stronger negotiating outcomes.
Plan Ahead for a Stronger Transition with DDSmatch in Colorado & Wyoming
Understanding your overhead, production, and financial performance gives you clarity, confidence, and more control over your future. Whether you plan to sell soon or simply want to strengthen your position, DDSmatch is here to guide you through every step.
If you are considering a transition in Colorado or Wyoming, reach out to DDSmatch and begin planning with a team that understands your market and your goals.