3 Big-Picture Steps to Take When Starting Your Dental Practice
February 10, 2021
Starting your own dental practice is the culmination of a career dream. Whether you are leaving an existing practice to build your own patient base or embarking on a new venture after graduating dental school, you probably already have a laundry list of items you need to complete to get your business off the ground.
As you begin your journey, these are the three, core actions you need to take to set a solid foundation for your dental practice and patients.
1. Build your business plan and make appropriate financial projections
The first and most important step in the startup process is to develop a solid business plan, which also includes forming a trusted professional service team. This team can be comprised of an accountant and business tax advisor, a realtor, an attorney, IT professionals, marketing consultants, and a dental and office supply and equipment representative, depending on what makes the most sense for your business needs.
You also need to develop a partnership with a bank that you can entrust with your business’s financial needs, including appropriate business checking and savings accounts. A contractor review is also a necessity for when you find a brick-and-mortar location for your business (more on that below).
While you are arranging your business’s financial house, it is also important to protect your practice against the unexpected. Take steps to purchase necessary insurance policies like life, disability, malpractice, general liability, umbrella and workers’ compensation coverage.
Once you have started to lay the groundwork for your practice’s basic financial health, start searching for a location you can call home. Details like your office’s square footage, your lease terms (including rent, utilities, etc.) and the floor plan all play a role in your budget. Ongoing maintenance costs also factor into your budget, beyond the monthly lease requirements and utilities.
With a startup, banks also like to know your target market and demographics before providing you with funding. The bank may ask you to compile a report with an official demographic study detailing your general location, competitors and constituents.
Before you can move forward with finalizing any of the steps above, you need to build out solid financial projections for your dental practice. These include a detailed analysis of 13-week, 12-month and 10-year projections. Based on your business plan and the scope of the project, develop an operating budget for the costs you anticipate for hiring staff and funding essential overhead expenses.
2. Implement the “nuts and bolts” of your dental practice
Once you have moved past the steps above, you need to establish the frameworks and documents necessary for doing business. This includes applying for and obtaining the appropriate registrations and licenses, such as the ability to prescribe narcotics, perform x-rays and offer nitrous gas for procedures.
This is also the best time to start developing vendor relationships that will help sustain your business and support patient care. Know your preferred vendors and consider getting referrals from colleagues and centers of influence within the dental community. From a marketing and business development standpoint, you should also determine your ideal budget, initial focus and any outsourced responsibilities. For instance, who will take the lead on finalizing your logo and promotional items? Who will take care of tracking your marketing budget and return on investment? This is where a third-party marketing consultant or agency can be helpful, if you are capable of allocating space in your budget toward those resources.
In addition, take time to think about and solidify office procedures. Start conducting staff interviews and determine the labor and cost structures that will optimize availability for new patients while not paying for idle hands. Review your appointment book and determine whether you want to rely on contract labor for a portion of your initial opening hours, while your business is still getting off the ground and you are still developing a patient base.
This is also the natural time to start researching employee retirement and benefits packages. What benefits can you afford to offer your employees now, and what benefits would you like to offer in the future, as your business grows? You should also work with a human resources consultant or a labor attorney to develop an employee handbook that outlines your benefits, official employee performance review policies, and any raise or bonus structures you would like to implement.
3. Establish ongoing operational services
To keep your practice running smoothly, you need to invest in systems, processes and tools you can count on to facilitate regular operational activities. For instance, it is essential to implement reliable accounting and payroll systems for your practice, in addition to creating mechanisms that ensure you are staying compliant with industry standards. Consider implementing a process or tool (think virtual dashboards via finance and accounting software) that allows you to continually stay up-to-speed on your practice’s financials.
These are enormous areas of responsibility that are vital to the current and future health of your practice. Enlisting the help of a trusted professional partner can take some of the weight off your shoulders. At Aprio, our team of experts brings deep, industry-specific knowledge to the table and helps practices of all sizes — including startups — achieve their business goals. We provide solutions in tax, accounting and even wealth management for startup owners looking to enhance their personal, financial well-being.
If your dental practice is in the startup phase, and you are looking for a professional partner to help advise your next steps, contact our team today.
About the Author
As partner-in-charge of Aprio’s National Dental Industry Practice, Brad McKeiver arms dentists with real-time financial data about their practices. He has helped numerous dental practitioners make informed business decisions that focus on driving increased practice profitability, growth and value.