Business Success for Your Dental Practice – Henry Schein Financial Services
Starting a new dental practice is both exciting and rewarding, but knowing where to begin, as well as finding the right partners can be challenging. Being prepared and asking yourself the right questions before you start can be a critical step to your success.
Here are 5 things that a dentist should consider prior to starting their first dental office.
1. Do you have a business plan?
Some lenders will require a first-time small business owner to submit a robust business plan before considering a practice loan, line of credit, or other financing options. Whether your lender requires one or not should not determine whether you complete a business plan. Studies have shown that new businesses perform better, grow faster, and are less likely to fail with a business plan, compared to businesses without one.1,2,3
A business plan allows you to think through in detail what your marketing, demographic, and staffing plans are for your new office. It also allows you to look at your personal expenses and determine how much revenue you need the office to do in the first year to support your lifestyle. In short, a business plan provides details about your dental practice, competition, customers, and industry so that you make the best possible decisions now, and in the future.
Finally, the business plan should include a checklist of all the steps needed to start your new office to make sure you do not forget anything along the way. As Benjamin Franking once said, “If you fail to plan, you are planning to fail”.
3. Key considerations in choosing the right financing options.
Once you are approved for financing. You should ask the right questions to make sure are choosing the right lender and financing option for your situation, as everyone’s situation is different, and there are many dental practice loans to select.
Consider these items when choosing:
- What terms are available and are the rates fixed for the whole term? Maximizing your cash flow by taking a long term, especially if you have significant student loan debt can be beneficial.
- Are there flexible payment structures? (It takes a while to start seeing revenues in your new practice and making sure that your loan payments gradually step up over time is a key to success early on in your practice)
- Who will manage the disbursements during your construction process (you or the lender?)
4. Are you adding the right technology?
Small businesses are evolving and so are their customer’s expectations. Patients (and customers overall) expect a world-class experience with anything that they do (healthcare, restaurants, entertainment, etc.). Wanting less time in a waiting room and to receive a text when the office is ready for them to come in, is the new normal.
Additionally, with costs to run a business going up, it is more important than ever to be more efficient so your business can still be profitable. One of the biggest mistakes made when starting a new office is skipping out on the right technology to run your office the right way, so they can fit within the budget their lending institution gave them. This can lead to higher costs to run your office more manually or not see the same new patient count as expected since the patient experience will be below expectations. Take time with your advisors and bank to make sure you can fit in the needed technology to run your small business the right way from the start!
5. Surrond yourself with experts.
Starting a small business can be hard, it can be easier however if you build a team around you full of industry experts that have done this before.
Choosing the right location for your office, designing and building out the right office for you, and selecting the right marketing plan can be overwhelming and end up costing you more if you are doing it by yourself or with advisors not familiar with the needs to be a successful dental office. Choosing a contractor that isn’t familiar with the buildout, specs, and compliance requirements of a dental office can cost you more time and money. Purchasing equipment yourself and not going through the right equipment specialist can also lead to timing and build-out issues.
Make sure you ask people in the industry you trust for referrals so you can build the right team to help you. If you would like more information, have questions, or discuss lending options, contact us for a confidential consultation.
Summary:
The 5 Things Dentists Should Consider When Starting a Dental Office:
- Complete a Business Plan
- Pre-qualify with a lender that is familiar with the healthcare industry
- Choose the right financing options
- Select the right technology crucial for your success
- Surround yourself with experts
Henry Schein Financial Services offers financial* solutions, including practice loans, equipment and technology financing, up-to-date information on current Section 179 tax laws, and more for dentists and new practice owners.
For more information, or to get started, Contact us today.
The information contained herein is intended to be informative in nature and is not intended to be a substitute for professional advice. The information was obtained from sources we believe to be reliable but is not guaranteed. Henry Schein does not undertake any obligation to update or revise any statements contained herein, or correct inaccuracies whether as a result of new information, future events, or otherwise. Dental professionals must make their own business decisions and may wish to seek professional advice before acting with regard to the subjects mentioned herein. Nothing contained herein should be treated as legal, business, accounting, international, insurance, tax, or other professional advice
1. Brinckmann, J., Grichnik, D., & Kapsa, D. (2010). Should entrepreneurs plan or just storm the castle? A meta-analysis on contextual factors impacting the business planning–performance relationship in small firms. Journal of Business Venturing, 25(1), 24-40. doi: 10.1016/j.jbusvent.2008.10.007
2. Burke, A., Fraser, S., & Greene, F. J. (2010). The multiple effects of business planning on new venture performance. Journal of Management Studies, 47(3), 391-415.
3. Shane, S., & Delmar, F. (2004). Planning for the market: Business planning before marketing and the continuation of organizing efforts. Journal of Business Venturing, 19(6), 767-785. doi: 10.1016/j.jbusvent.2003.11.001
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