Take Control of Your Dental Practice Overhead: The Keys to Real Profitability

Insights form Kirk Behrendt (Founder, ACT Dental) & Christina Byrne (ACT Dental Coach)

Talking about overhead might not be your favorite topic, but if you want to hire with confidence, invest in new tech, or make better business decisions, your numbers matter more than ever.

At ACT Dental, we’ve coached hundreds of exceptional clinicians whose practices still struggle financially, simply because they’re not watching their expenses closely enough. The good news? Once you start tracking overhead, the growth path becomes clearer and more manageable.

Why Overhead Is the First Business Metric You Should Understand

Kirk Behrendt: “Overhead is to your practice what oxygen is to your body. Without margin, everything becomes harder, especially when the unexpected hits. Just producing more won’t solve the problem if you’re not collecting or watching what you spend.”

Christina Byrne: “Every decision—from hiring to dropping insurance—should be backed by data. If you don’t know your overhead, you’re flying blind.”

According to the American Dental Association, the average overhead for a dental practice falls between 60–75%. If your number’s creeping higher, it may be time for a deeper look.

The 7 Main Categories of Overhead

Understanding overhead starts by breaking it into manageable categories. At ACT Dental, we organize overhead into seven core areas:

1. Team Compensation – Salaries, benefits, and payroll taxes
2. Facility & Equipment – Rent, utilities, repairs, equipment leasing
3. Operations – Admin software, accounting, legal, insurance
4. Lab Fees – Outsourced and in-house lab work
5. Dental Supplies – Consumables and restorative materials
6. Marketing – Website, ads, patient acquisition tools
7. Discretionary – Team lunches, charitable giving, cell phone stipends

Knowing which dollars fall into which bucket allows you to make informed decisions and identify areas for potential savings.

Fixed vs. Variable Expenses: Know the Difference

Fixed Expenses stay the same regardless of how many patients you see (e.g., rent, team salaries). Variable Expenses rise and fall based on your production and patient flow (e.g., lab fees, supplies).

Understanding these differences helps you manage cash flow and reduce stress when patient volume shifts.

Empower Your Team to Manage the Money

One of the simplest steps you can take? Set a monthly budget for supplies — typically 5% of last month’s collections — and assign a team member to manage it.

“Ownership creates accountability,” says Christina. “When team members have a clear target, they make better decisions.”

Encourage systems: color-coded inventory shelves, monthly maintenance logs, and one team lead for each spending category. These processes create clarity and reduce waste.

Lab Fees, Write-Offs & Profitability Gaps

Are your lab costs increasing? Before switching labs, have a conversation. Are you billing properly? Are you collecting fairly?

Also, with more practices adopting in-house milling and 3D printing, it’s important to categorize those costs accurately. Track materials, labor, and maintenance like any other expense.

Kirk’s tip: “Your lab isn’t just a vendor—they should be a coach. A great lab partner helps you reduce remakes, improve results, and boost your confidence in charging what you’re worth.”

Smile Source Helps Lower Overhead — Without Cutting Corners

As a Smile Source member, you benefit from over $100 million in collective buying power, translating into real savings on the tools and services your practice relies on every day.

Member Benefits Include:

• Exclusive Rebates – Over $6 million returned to members annually
• Up to 45% Off – Deep discounts on supplies, labs, and equipment
• Curated Vendor Network – 90+ peer-reviewed partners
• Savings Dashboard – Track rebates, purchases, and budget targets

“With Smile Source, my overhead is better under control thanks to vendor savings, member rebates, and expert advice.”
– Dr. Rajan Kshatri, Madison, TN

Explore Vendor Savings →

Ready to Take Control of Your Overhead?

Here’s where to start:

• Track collections and monthly expenses
• Categorize costs using the 7 overhead areas
• Budget key areas like supplies and labs
• Review write-offs—even in fee-for-service models
• Assign ownership to team members

Remember, overhead isn’t just about expenses. It’s about margin, and margin gives you flexibility, stability, and freedom.

New for Smile Source Members: Access to ACT Dental CE

Smile Source members now get free access to ACT Dental’s Best Practices Association (BPA) — including:

• AGD-PACE approved CE
• Master Classes, webinars, and study clubs
• Clinical and business training
• CE credit for your entire team
  
  

Final Thoughts

Overhead doesn’t need to be overwhelming. When you understand where your money is going, you unlock the power to grow your practice intentionally, with clarity and confidence.