What Is Net Profit in a Dental Practice?

Net profit is the amount of money a dental practice has left after deducting all operating expenses, staff costs, associate pay, labs, materials, and overheads from its revenue — before Corporation Tax.

It represents the true profitability of the business and is a key driver of practice valuation and owner wealth.

Why Does Net Profit Matter for Dental Practice Owners?

Many principals focus on revenue or UDA delivery, but high turnover ≠ high profit. Net profit is the metric that determines:

• Whether the practice can pay the owner safely
  
• The sustainability of growth and reinvestment
  
• Valuation in a future sale
  
• Corporation Tax liability

Example:

• Revenue: £1,000,000
  
• Total expenses: £920,000
  
• Net Profit: £80,000 (8%)

DentPulse benchmarks this figure to classify practices into:

• 🔴 Recover Zone (<7.5%)
  
• 🟡 Protect Zone (7.5%–10%)
  
• 🟢 Maximise Zone (>10%)

How Is Net Profit Calculated?

Net Profit=Total Revenue−Total Expenses\text{Net Profit} = \text{Total Revenue} – \text{Total Expenses}Net Profit=Total Revenue−Total Expenses

Where:

• Revenue = NHS contracts, private treatments, plan income
• Expenses = associates, staff, labs, materials, marketing, premises, overheads

How Does DentPulse Track Net Profit?

DentPulse makes net profit a living diagnostic, not just an annual accounting figure.

DentPulse Tip™

“Revenue is vanity. Net profit is sanity.
But only if it’s calculated on earned income, not just collections.”

Related Glossary Terms

• Gross Profit Margin – profit before fixed expenses
  
• PPBT™ (Personal Profit Before Tax) – proprietary DentPulse take-home clarity metric
  
• Profit-to-Pocket™ – links net profit to personal income
  
• Operating Expenses – practice overheads deducted from revenue
  
• PulseBenchmark™ – DentPulse’s profit zone benchmarking system

Glossary Summary Table