Athena Consulting: Dental Practice Solutions

New Practice Starts and What You Should Know

The idea of starting a practice from scratch can be very intimidating to a recent graduate or a doctor only one or two years out of dental school. Many learn that associate positions are dead end “jobs” with no future, and little financial compensation. There are many issues that must be considered when starting your own dental practice from scratch. The most important is location, location, location, according to the area demographics. We want to set you up for success rather than failure. Completing your new start project the right way can save you many thousands of dollars in expense and lost revenues, and you will not find it necessary to go back and correct huge mistakes.

Demographics and location are two of the most important factors to consider. What is the dentist-patient ratio in your targeted area? It should be no less than 3000:1 for a general dentist. We’ve known for years that only 50% of our population visits the dentist on a regular basis, therefore, a 3000:1 ratio will allow for approximately 1,500 active patients. Setting up your practice in an area already saturated with dentists is a quick recipe for financial disaster if the community population will not support another practice.

Once you’ve decided on the location, you’ve got to then look for inventory (space) for your new office. The neighborhood retail areas cropping up across America are good choices, because they provide you with storefront visibility and foot traffic. They are also very convenient for people who then visit the dentist and continue running errands without making a special trip to a dental/medical building where your office has no visibility.

While looking for space and before you negotiate and execute your lease, you will want to find the proper lender who will underwrite your project. Loan approval should be in place before executing the lease.

It is now time to do the dance between architect, contractor and dental equipment sales reps. These three people are important in your project and will need to work together with you to design the space, make sure the equipment you’ve decided upon will fit in the space and the contractor knows the specs of the equipment.

Your design plans (full, stamped blueprints) take about 8 weeks to complete, and you must allow 2-3 weeks (sometimes longer) for the contractor to receive the building permits. The length of time for this process varies from city to city (or county) and it depends on the Building Permit Department workload.

Once your permits are received, the contractor will start your tenant finish and it shouldn’t take more than 9-11 weeks to build out the average dental office.

By now you should be feeling a bit overwhelmed, so this is a good time to explain why you should have a consultant on board with your project from the moment you conceive the idea of starting your own practice. There are consultants who specialize in new start consulting. It is the consultant’s job to coordinate the entire project, find proper financing, write your business plan, assist you in completing your personal financial statement properly, assist you with completing the loan application and provide the lender with at least a one year proforma for your new practice. This is an invaluable service to you, and as I have learned over the past three decades, not many dentists come out of school or an associateship with the knowledge and skills to do this work on their own. Remember, you went to school to learn how to be a dentist, not a business tycoon.

Your marketing plan has to be addressed and should be in place and ready to execute at least two weeks prior to your office opening. Many dentists spend thousands of dollars on all the wrong marketing and struggle to keep the business afloat for the first several years.

You’ve finally received your Certificate of Occupancy and you’re ready to see patients!

The work is just beginning. Do you know how to run a business, how to operate a dental practice, how to manage a dental practice? Do you know how many team members you should start out with and how quickly to build on your team? Do you know what a true team is and how to develop the team for the success of the practice? What about all the office systems that need to be put in place prior to the opening? Do you know which systems work best and how to train your staff to use those systems properly?

As you work in your practice, you should be able to read and understand your P & L statement and see how well your expenses fall within dental management guidelines, and what actions to take if they do not. You need to recognize potential problems before they escalate, and take preemptive action.

Team building and good doctor leadership skills are two of the most important areas of the practice. You are not born with these skills and they must be taught to you, because YOU are the leader of your team, YOU set the mood of the office, and YOU are the one who will set office policy and procedures. Above all, YOU are the one who owns the practice, and all the debt that comes with it.

Hierarchies seldom work these days and more and smaller businesses are getting away from the hierarchy management paradigm and shifting to the leader/team approach. A good team can function at a higher level and be much more productive. A true team is working toward the same goal: the success of the practice.

If you hire the proper consultant, you will travel the shortest and least expensive distance from point A to point B, and in a straight line. Riding the roller coaster is time consuming, stressful and very expensive. Your consultant should handle all of the steps mentioned in this article, train you to operate a successful practice and provide management consulting services for a minimum of one year after you open your doors. The object is to teach you how to run your business and manage your practice over the years, and should not be a situation whereby you become totally dependent on your consultant. Give a man a fish and he will eat, teach a man to fish and he can feed himself for a lifetime.