De novo or acquisition?
Among the 2025 dental private-equity transactions tracked by the Private Equity Stakeholder Project, roughly 95% were add-ons to existing platforms.1 That advocacy dataset does not capture every dental transaction, and the acquisition-versus-de-novo trade remains genuine:
Some branded groups use de novos heavily because a consumer brand can support patient acquisition and a standardized buildout can reduce integration variation. Heartland Dental is one company-specific example: it reported collaborating to open 38 de novo offices and completing 13 affiliations in the first half of 2025.2 That period does not establish a market-wide rule. See How DSOs grew for the model split, and Acquire a dental practice for the other path.
Prerequisites
- The state-law analysis completed, including CPOD, professional-entity, and any role-specific registration requirements. See DSO laws by state and Register a DSO
- Financing sized for buildout plus operating losses to breakeven, not buildout alone
- A dentist recruited and licensed in the state, with payer applications ready to begin when each payer permits
Steps
1
Model the ramp before signing anything
A de novo opens with no recall base. Hygiene can account for 25–35% of a mature general practice’s production,3 and a full schedule develops gradually through reappointment and recall. Early production will depend more heavily on new patients and dentist services. Model the resulting operating losses until volume supports the office.Model monthly new-patient flow, recall conversion, staffing, and cash. Include both buildout and operating losses in the project cost. Document any DSO funding under the agreements and applicable law. See Move money between PC and DSO.
2
Pick the site
Review household density and growth, payer mix, dentist-per-capita saturation, visibility, parking, co-tenancy, and signage rights. A PPO-heavy suburb and a Medicaid-heavy corridor may require different staffing and enrollment plans. See The dental payer landscape.Check the lease for dental-specific terms: plumbing and compressor/vacuum runs, radiology shielding, exclusivity against another dental tenant, and hours access for early hygiene columns.
3
Budget the buildout on per-operatory math
The following directional ranges come from contractor and equipment-supplier guides published in 2024–2026. Replace them with local bids before approving a budget.4
Dental buildout costs reflect plumbed operatories, compressed-air and vacuum lines, and radiology shielding.4 Use the local estimate to negotiate a tenant-improvement allowance. Decide which operatories will open fully equipped and which will be plumbed for later expansion.
4
Finance the equipment
Equipment lenders and dental suppliers offer financing for chairs, imaging, and CAD/CAM systems. Construction may use a practice loan or an available DSO credit facility. Match the borrower, purchaser, owner, and lessor to the structure and state law, and document any equipment provided under the management services agreement (MSA). Ask your CPA how Section 179 and bonus depreciation apply. See Prepare for taxes.
5
Start payer work as soon as the required facts are available
A new location creates payer work even for an existing group. Determine, payer by payer, whether the office must be added to the contract or enrollment, whether each dentist must be linked to that address, and which effective date controls in-network claims. Published and actual processing times vary; Medicaid and its dental benefit administrators apply their own enrollment and managed-care rules.5Start each required application or location update as soon as the payer accepts it. Before opening ahead of an effective date, obtain the payer’s written direction on network status, claim submission, cost sharing, and any retroactive treatment; do not assume the claim can simply be labeled out of network. See Enroll with dental payers and Handle credentialing delays.
6
Stand up the operational stack before opening day
- Banking: open the required accounts and direct payer EFT to the account authorized for the enrolled billing provider before the first claim. See Open bank accounts
- PMS and clearinghouse: place the new office on standard systems and fee schedules before opening so its reporting is comparable. See Choose a PMS
- Staffing: hire essential opening staff, then add hygiene capacity as the recall schedule develops
- Books: place the office on the group’s standard chart of accounts and track hygiene as a department. See Set up bookkeeping
7
Fill the book, and pre-book from patient one
Marketing is front-loaded: new-patient flow is the only revenue lever until recall exists. Track cost per new patient weekly.The discipline that compounds: reappoint every hygiene patient before they leave. A de novo that pre-books from its first patient is building the annuity; reactivating lapsed patients later costs multiples of keeping them booked. The reappointment rate belongs in the investor reporting pack from the office’s first month.
Verify it worked
- Ramp model covers buildout plus losses to breakeven, and the funding is documented
- State layer confirmed: CPOD analysis done, DSO registration filed where required
- Lease covers plumbing, shielding, exclusivity, and signage
- Buildout bid locally against the per-operatory ranges, TI allowance negotiated
- Each required payer application or location update initiated as soon as the payer accepts it and the required facts are available
- No in-network claim billed from the new address before the location is effective on the contract
- Authorized receiving accounts open and EFT enrolled before the first claim
- New office on the standard PMS, fee schedules, and chart of accounts
- Hygiene staffing scaled to the book, not to the floor plan
- Reappointment rate tracked from the first month
Sources
- Private Equity Stakeholder Project, PE healthcare deals: 2025 in review (149 dental deals in 2025, approximately 95% add-ons; advocacy source used only for deal counts).
- Heartland Dental, Heartland Dental Reports Strong First Half of 2025 (August 5, 2025) (company-reported growth mix: 38 de novos and 13 affiliations through June 2025).
- Dental Economics / Levin Group survey data: research report on hygiene; 2025 annual practice survey.
- Contractor and consultant buildout guides, 2024–2026: The Dental Signal; Maxx Builders; BuildCrux. Ranges are directional; local bids govern.
- Credentialing timelines per transition advisories: PPO Advisors; ADS Transitions. Per-location requirements vary by payer and state Medicaid program, so confirm them with each payer.