Plan To Succeed: Creating a Business Plan for Your Practice

So you’ve decided to start your own dental practice after graduation. Congratulations! You are about to embark on an exciting project and fulfilling career. Your first step towards reaching your ownership goal is to develop a business plan for your practice that details the viability of your venture.

A typical business plan outlines the business objectives, management and operational features, marketing plans and financial projections for your proposed practice. It is an indispensable tool for sharing your plans and solidifying support with your lender, contractor and vendors, and should be based on sound logic and

careful research.

A good business plan can take several months to prepare. To hit the ground running upon graduation, try to have

your business plan completed before you leave dental school. Use the free business plan templates available from industry resources such as Wells Fargo Practice Finance to help organize your planning and research. (To download your template, visit wells-

After reviewing the Executive Summary, your reader should have a good idea of the “what, why and

fargo.com/practicefinance and click on the New Dentists page.)

how” of your new practice.

Key Components of the Business Plan

A business plan for a dental practice typically includes six components, each of which needs to be addressed in some detail. I. Executive Summary

II. Practice Description

The Practice Description goes into greater detail about the structure

The Executive Summary serves as an introduction to you and your business

venture. It is often the first impression your readers receive of your project, so it is important that the Executive Summary be concise, complete, and compelling enough to persuade lenders that your practice startup plan is viable.

of your business, your qualifications for managing the business, and your business resources. This section tells your lender that you have the personal know-how and professional means at hand to help ensure practice success.

The Executive Summary typically includes a Company Description, Mission Statement and Financing Requirements. In the Company Description, provide a brief overview of the type of practice you are developing and the services you will provide. Describe where your practice will be located and your target patient, and any specialties you will be offering.

Elements of the Practice Description include your Practice History, which describes your professional experience to date such as where you went to dental school, when you graduated, and any professional experience you’ve gained; Management Team & Key Personnel, which identifies the principals ultimately responsible for financial performance of your practice, as well as key team members and their roles; your Professional

Your Mission Statement outlines your practice philosophy and rationale for building your practice, while the Financing Requirements section provides a summary of the capital you will need to get your practice up and running.

Advisors and how they will help you manage and grow your business; your Business Structure, including your legal entity (Sole Proprietorship, etc.) and health insurance mix; and the Business Insurance you plan to have.

V. Operations

III. Market Research

The Market Research section demonstrates that your future practice is based on a solid grasp of the local market and your potential for success. Your lender will look to see that you understand the community you are joining and have considered the competition in this area.

Include a Market Description that describes who lives in the community you have selected for your practice, and what sort of growth is predicted for this area over the next 10 years. Outline your Target Customer by describing your ideal patient, including characteristics, needs, income level, education, gender and age. Provide a Competitive Environment & Analysis section that defines how many other dentists are practicing in the area and the range of services they provide. And finally, outline the Competitive Advantage your practice offers that your competitors do not.

and who your major suppliers will be.

Tools for completing this type of research are available online, including a Market Data Report with detailed practice location information offered by Wells Fargo Practice Finance at https://practicefinance. wellsfargo.com/market-data-report/. The report is available for $75, or for free with your completed loan application.

IV. Marketing Plan

In this section you will describe the internal and external marketing activities you plan to use to announce your opening and grow your practice. How will you attract patients and keep them coming back? How will you set yourself apart from the competition? Approximately how much are you budgeting for marketing activities during the first year? What is your marketing mix – the balance between print advertising, promotions, referrals, email, and other elements of marketing?

To ensure your marketing plan is realistic and effective, consider consulting with others who have successfully built a dental

practice from ground up. Find a mentor who can advise you on marketing and promotion techniques that can help build awareness for a new practice and grow business on a monthly basis.

policies. You do not need to include job descriptions, but identify the resources you are using to create those job descriptions.

VI. Financial Forecast

The Financial Forecast is probably the most difficult section to complete, as well as the most important. The financing package you receive from your lender is based on the numbers in your forecast, so it is critical that you do your homework and make these calculations as accurate as possible. Turn to the resources available to you for guidance in completing your calculations, such as a dental CPA, practice lender, accountant and industry mentor.

The Operations section of your business plan details the day-to-day needs and functions of your practice. It shows that, far more than just a dream or vision, your plan is a genuine blueprint for success based on well-thought-out ideas about how you intend to run your business.

The first part of the Operations section outlines the Location & Premises of your new practice, including the exact location if available, why you chose it, and whether you will own or lease the space. Include the number of operatories in your practice and how many will be plumbed versus equipped.

The forecast includes an Income & Cash Flow Projection for the first 12 months of practice operation. Your projected income is based on the number and type of procedures performed per week, and will likely grow over time. Your cash flow is the difference between your gross income minus operating expenses and overhead.

Outline the Days & Hours of Operation so your lender understands what your work week looks like. If you will be associating while growing your practice, include that information as well. Detail the Equipment & Supplies necessary now and in the future,

The forecast outlines Capital & Operating Expenses as well, or the total funds needed to build and operate your new practice. Try to be as specific as possible, including

The Operations section also addresses Staffing, including your recruitment plans, staff roles, compensation and personnel

categories such as contractor costs, loan payments, staff salaries, rent, utilities, lab fees, supplies and other minor expenses.

The Artist Evolution is a full service, strategic marketing and design firm with a passion for helping practices around the country to communicate effectively with their target patients, to develop an identifiable brand, and to meet their objectives in a cost-effective way. Please see our ad on page 9.

At Aspen Dental we recognize that our success is a direct result of empowering and supporting ambitious dental professionals. We provide a professional, fast-paced, entrepreneurial work environment based on a mutual respect that keeps our interests aligned together, we build and develop successful, patient focused dental practices. Please see our ad on page 31.

The Project Financing component of the forecast details how much you need in financing to build and launch your practice, and the terms you are looking for. Include here any personal funds or assets, if any, that you will be contributing to the project.

Tips for Completing Your Business

Plan • Be clear and thorough in creating your plan. Include a formal title page or cover for the plan and make sure your writing is grammatically correct and slang-free. Remember that your business plan provides the first impression of you as a business person, so make it an accurate and professional representation of your capabilities and objectives. • If you lack writing skills, consider contracting with a freelance writer to develop your plan. A well-written, organized

Practice Makes Perfect

“Dr. Earl Douglas and the staff at ADS South have been real helpful in steering me in the right direction in the purchase of my first practice. Dr. Douglas’s experience, organization and detail-orientation, pointed out to me where improvement is needed and how to go about achieving it.”

Elizabeth H. Guerrero, DDS

document gives your vendors a positive impression of your business skills as well as confidence that you can manage a project of this magnitude. • Do your research – don’t guess! Your financing package will be based on the financial projections included in your plan. You don’t want to find yourself unable to fulfill your vision simply because you didn’t do your homework thoroughly. • Build a team of advisors who can help with plan and start-up details, including a dental CPA, attorney, dental practice designer, contractor, and practice finance lender. A strong advisory team can help you save considerable time and money in implementing your practice vision. • Remember that your business plan is a living document that should be updated periodically as circumstances change.

With a business plan for your practice in hand, you’ve got a jump-start on the competition – namely, new graduates who have not yet formulated their career plans. So if possible, get your business plan started now so you can begin planning your success for years to come. ■

transitioning to practice ownership through the use of proper due diligence, and guides them in developing the management and leadership skills necessary to successfully operate a practice. Tammara can be reached at 888.499.8871 or

tammara.plankers@wellsfargo.com.

Get off to the perfect start. Call your ADS transition specialist for

AL, GA, LA, MS, NC, SC, TN and VA today.

ADS South (770) 664-1982

ADSsouth.com

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