10 Business and Financial Steps To Start A Dental Practice Start Up
Latest posts by Deb (see all)
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- 10 Business and Financial Steps To Start A Dental Practice Start Up - October 6, 2017
Let us start this article on a positive note.
As a dentist be assured that you have chosen a viable profession with a high rate of proven success stories from all over the world. On the whole, dentists are one of the most top tax paying group of professionals, across the globe. Thus it is apparent that dentists do make significant money and at the same time get the respect of the community also.
Yes, it is true that in the initial stages of your dental career you will have doubts.
What are some of the most common doubts that dentists have when they are starting their dental practice?
- Doubts related to Investments: A lot of financial investments are required to set up a dental practice. There is always that doubt of raising a high amount of money and then the fear of the practice running at a loss, thereby making the entire investment of no use.
- Doubts related to clinical skills: Every dentist in the initial years doubts if he/she has the adequate skills to handle all the types of dental treatments for the patients coming to the practice.
- Doubts related to networking & people skills: Many dentists are doubtful of their abilities to interact with the patients and building up the professional network.
- Doubts on managing finance: A dental practice has a lot of financial matters running simultaneously. For a dentist, it gets confusing to control and keep track of all the economic issues.
- Fear of litigations and consumer cases: Every dentist is doubtful about consumer cases against their practice and how to tackle with such issues.
- Fear of damages to the clinic: A dental practice has many high price equipment within the perimeter. So a dentist is always doubtful regarding the safety of the practice and insurances to cover the possibility of damages.
These are just some of the common doubts that every dentist has. In this article, we are going to try and provide 10 Tips For Dentists To Start With A Successful Dental Practice.
For these points, we asked many young dentists who are already into 2 to 3 years of their dental practice. They were accommodating in discussing the points and also hoped that these points will help new dentists.
All these points are some of the most important aspects of dental practice management.
List of the points covered in this article are as follows:
10 Tips To Start a Successful Dental Practice
(The points on Dental Practice Management)
- Do detailed research & homework before starting taking into account all the crucial points.
- Before starting your practice, build up your professional networks.
- Prepare a financial plan covering all the possible investments and other factors. Get necessary insurances & plans to invest your money.
- Have a business plan of action for your dental practice. Work to improve your business acumen.
- Keep a strict control on your debt load. Try your best to stay within your budget and do not go overboard.
- Understand all the 5 professional stages of your dental career and act accordingly.
- Take help of technology and professionals for dental practice management.
- Work on promoting your dental practice. Make it known.
- Invite consultations or go as a consultant to other practices.
Conclusion and take away for dentists.
Infographic of all the points discussed.
1. Do Detailed Research, Homework, and Preparation
Being a professional dental practitioner is similar to being your boss. You are in charge of the ship. There is no more scope to shift the blame to others.
You are responsible for the failure of your practice, and you are also the sole one get all the credits for the success.
Until a few years back a dentist could quickly build a practice from scratch and within few short months have a full list of patient appointments.
In other words, the chances of failure were less and even if there were odd cases of failure, there was enough scope for the dentist to bounce back.
Fast forward to the current times and the scenario has changed a lot. A dentist no more has the luxury of bouncing back from a failure. I do not say that it is not possible, but it is complicated. Why?
Because in the modern day, dentistry is a profession with multiple aspects. The success of a dental practice does not depend anymore only on the dentist. There are many other factors running side by side. Any one element that is neglected can be the cause of the failure of the dental practice.
Hence, as soon as your mind is made up to start your new dental practice do the following home works
- Contact your seniors and old staffs to take their suggestions. Search the internet. Check out financial information papers. In short, try to imbibe as much initial information as you can from all the sources.
- Make a list of the possible hurdles that you think you are going to face. It is imperative as it makes you aware of the potential challenges you need to overcome to have a successful dental practice.
- Make a list of the possible solutions to the problems you listed in the previous point.
- Scout the areas where you want to start your dental practice. Survey the nearby areas too. If required survey interior areas also. Keep a note of the location prices. It will help you in comparing the real estate prices. In the end, your goal is to get an excellent location for your dental practice at a reasonable price.
Prepare a list of all the necessities – Preferred locations for your practice, the equipment, electricity supply, furnishing, drainage, waste disposal, and other things. Your aim must be to make a plan for all the required items in the lowest budget possible.
So, this is the preparatory stage before you start working on setting up your dental practice. The more you do this homework, there will be lesser chances for you to get surprised. You will be ready with a solution for all the steps.
2. Build a Stable Business Network
Right from the day you decide to start your dental practice, you will get suggestions from many people. Of course, they will be well-meaning suggestions, but you will need to filter them out.
Always remember for a dental practice to do well you need to make connections with Industry-Specific Advisers. These are the people who already have experience and expertise in working in the dental sector. Connect with them.
So, who are those people?
Dental Set Up Builders: The first requirement of a dental practice is to have a good set up. For that, you should contact the contractors who are experienced in setting up dental practice set up. If are confused you can also take suggestions from your friends and fellow dentists. They can point you towards top contractors.
Establish contact with specialized dentists: If you are a general practitioner or a specialist in one stream of dentistry (e.g., Orthodontics), then you need to establish networks with other dental specialists like endodontics, oral surgery, etc. to carry out specialized dental treatments at your practice.
Dental Material Supplier & Equipment Specialist: To run a dental practice you need a regular supply of dental materials/equipment at an economical price. So, you need to connect with an efficient dental material supplier. Ask your fellow dentists for suggestions. A good dental material supplier can be a very insightful adviser, with years of experience in the dental sector. In fact, it is not uncommon for a dental practice owner to maintain a career-long relationship with a trusted material/equipment specialist. There is a symbiotic relationship at work here. It is vital to these specialists that your start-up practice is positioned for success since they hope to provide you with updated equipment and the latest technology for many years to come.
A Dental Specific Financial Lender: Starting a dental practice requires a considerable financial investment. You can take the help of financial institutions to raise the capital needed to start your clinic. A single dental practice comes under small-scale business. However, a chain of dental clinics plan requires more substantial investments. The financial institutions and banks located at your location will be having loan plans for dentists. So, do proper research concerning your area. It is best to enquire a bank where there is a previous track of lending finance to dentists. Dental-specific lenders are more experienced in handling the requirements of a dentist.
Always keep the fact in mind that:
- Success in dentistry is mostly dependent on the business networks that you create with the people who are experienced in the business of dentistry.
- These advisers can give you practical suggestions from the beginning of your dental practice and also as your practice scales up.
- They want you and your practice to succeed as they want to be in business with you for a long time. Hence, the people mentioned above are the best dental practice management advisers for you.
See Next Slide
Point #3. Financial Plan
Point #4. Business Acumen
We are looking at 10 tips to run a successful dental practice.
3. Prepare a plan to secure your finances
It is a very vast topic to discuss and requires a separate article.
However, I will try to cover the essential points within the scope of this article.
Starting a dental practice involves many financial aspects.
However, when starting a dental practice the most important financial aspect is taking a bank loan.
Bank Loans: If you are planning to take a bank loan to start your dental practice, then you have a difficult choice to make. You have to consider the banks that provide you a credit at a lower interest. However, the interest rate is not the only factor to consider. What are the points to consider when taking a bank loan?
- Interest Rate: The most important point to check first. Your goal should be to get a loan from the best bank you can manage at a lower rate. So locking in a competitive fixed rate for the next seven to 15 years is your best option.
- Loan Term: While taking a loan you should consider the most extended loan term available (around 10 to 15 years). Breaking the credit for longer years will lower the payments. If your dental practice keeps pace and shows growth, then you have the option to prepay the entire loan in short segments.
- Pre-Payment Option: Pre-payment options vary from lender to lender. Loan prepayment terms are less important in the early years as you open and build your practice, but pre-paying your loan may become an option after your practice is no longer considered a start-up and is looked upon by lenders as an established practice. However, this will again vary from bank to bank.
As a dentist how can you manage your money and profits? You can read this article for the detailed information:
After bank loan, the next financial point to take care is insurances. It is very crucial for the economic safety of your dental practice against damages & litigations. We have previously published a detailed article discussing the various coverages that a dentist can use. You can read the article here:
4. Have a Business Plan & Improve Your Business Acumen
Managing a dental practice has two aspects to it. One point is treating the patients and providing them an excellent dental care. The other side of the dental practice management is the business aspect of it.
In fact, the business side of dental practice management is as important as the treatment side of it. Many experienced dentists have asserted that the business aspect is the most important.
Why is the business aspect of dentistry so important?
- For success in the long run, the dental practice must show a financial profit every quarter or month.
- Just like any other business venture, a dental practice needs to update and upgrade with the advancements in dental science. For that, your dental practice must have profits.
- Every business in the world that is successful has a plan for expansion. Similarly, if you practice gets successful, then you might want to open multiple branches at different locations. You will also need to hire qualified dental professionals.
The professional career of a dentist goes through 5 phases. Each phase has its demands and requirements. To successfully navigate through all these steps you need need to understand the business concerning all the stages in the career of a dentist.
You can read the article below for detailed business aspects related to all the 5 stages of dentistry.
Improve Your Business Acumen
Dental schools teach us dentistry. However, very few dental schools try to provide the business acumen to the young graduating dentist. Moreover, when that young dentist comes out from the enclosed ecosystem of dental school to the highly competitive world of professional dentistry, he finds it difficult to adjust.
In my opinion, every dental school in the world must have dedicated courses on
- Business Practicality for dentists: Where in they are taught all the practical business aspects of setting up a dental practice.(about the 5 stages of dental career)
- Business Sense/Acumen for dentists: Where the young dentists are taught the business sense of dentistry.
- Business relation building: Connect with your fellow senior dentists who have been practicing for some time now. They are currently living the dream of having a successful dental practice which you also aim to have in the next few years. Approach them with proper respect, and you will be surprised how willing they will be to share their experiences with you.
So, what are the most prominent points of business acumen about dentistry? Read this article to know about the most practical dental business points.
See Next Slide: for next two points needed for starting a dental practice
Point #5. Keep a Strict Control on Your Debt
Point #6. Act as per Professional Stage
We are looking at 10 tips to run a successful dental practice. The effective financial plans for dental practice management.
5. Keep a Strict control on your Debt
As we already discussed in the previous slides, while starting to set up a dental clinic, finance is the most critical factor.
Every dentist needs to keep a close watch on the tendency to go overboard in expenditures on the dental practice. This excess spending can happen in two distinct scenarios.
- Excess expenditure by a new dentist: In the excitement of starting up a fresh and modern dental practice equipped with all the latest devices and equipment, many young dentists tend to go overboard in their expenditure. The desire for better looks, furnishing, modern equipment pushes them to spend a little more with the hope that it will help the practice to succeed in a short time.
- Excess expenditure by an experienced dentist: Many times experienced dentists also end up spending more. They visit dental expos and hear a great buzz about some new found equipment or dental software. Without giving it a thorough thought, they end up spending much money. (that might lead to financial loss)
Both the scenarios mentioned above results in a lot of excessive expenditures for the dentists, which puts a significant financial burden on them. Particularly for dentists who are starting with their practice, this can put them in an economic mess.
Remember the cardinal rule of finance: Try your best Never to Have a colossal debt. You owe it your future and family.
6. Act as per your Professional Stage in Dentistry
We discussed before that the career of a dentist could be split into five essential stages. Each stage comes with its own set of financial, physical and emotional requirements.
So, you need to act according to the stage you are in.
Remember when you enter dentistry, you are young with only the career as a goal.
However, as you grow older into your profession, you settle down into family life with added responsibilities. So, it is essential to plan your career as per the five stages.
The 5 Stages of the career of a professional dentist:
Introduction: Entry to dentistry
The Growth Phase
The Maturation Phase
The Saturation Phase
The Decline Phase & Retirement
Read the article below to know the details of all the stages of dentistry and how to tackle them.
A dental practice has many types of financial aspects running simultaneously.
Within few months into the dental practice, it gets tough to manage all the financial details of your practice.
What are the financial points that you need to take care:
Getting approval for all the necessary govt. approvals.
Consumer cases and mitigations
As you practice grows it is not possible for a dentist to keep a watch on all these points. First of all, it is time-consuming. Secondly, these are not easy points to handle.
So it is always better to take the help of a professional Lawyer and Financial analyst in these matters. It helps the dentist to concentrate more on managing the patients with a calmer mind.
See Next Slide: for next two points needed for starting a dental practice
Point #7. Using Dental Practice Management Tools.
Point #8. Work on promoting your Dental Practice.
We are looking at 10 tips to run a successful dental practice. The tips and tricks for dental practice management.
7. Learn To Use Dental Practice Management Tools
If you ask any experienced practitioner, then they will tell you, dental practice management is not a single track work.
Dental Practice Management involves a lot of financial aspects, treatment aspects, patient records & communication and much more. As your practice grows old (even in a few months) you will have a lot on your plate to handle. In such a scenario, a dental practice management software can be of great help to you.
There is no need to immediately purchase a dental practice management software as soon as you start your practice. However, take your time in the homework phase to search available dental practice management software, the prices, features and customer support.
You can refer this article which will help you in your research of dental practice management software and guide you in choosing the best one for you.
8. Learn to Promote Your Dental Practice
After all the hurdles, you have finally managed to open your dental practice. You are ready and hoping to make your mark soon.
You are a little worried in you mind as you have invested a lot of finance, time & efforts in setting up this dental practice. You are anxious & nervous for its success.
However, ask yourself this question. Out of all the dental practices which are already working in and around your location, why would the new patients come to your clinic? You are hoping that once your dental practice opens its door, patients will happen automatically. To some extent, it is true but not entirely correct.
To make sure that your clinic gets the maximum visibility before and after the opening you need to have a consistent advertising plan.
Advertising plan before opening your clinic:
- Once you start working on setting up your dental practice, it takes around 2 to 3 months to be entirely over. In that time you will be busy in managing finance and all the necessary items for your practice.
- Though you will be busy, you can still use this period to inform the people in your locality and around it about your clinic. Put out banners, flyers about your dental clinic. Inform your friends and near ones.
- While setting up your dental clinic, you will come in touch with dental suppliers & technicians. Develop a good rapport with them. In fact, everybody you come in contact while establishing your practice is a potential advertiser. Your goal should be to impress them.
Advertising plan after opening your clinic:
Once the doors of your dental practice are open to the public, then the second phase of your promotion should start.
It involves two key parts
Promotion in and around your locality where the dental practice is based.
Online promtional activities/ Social media promotion.
Point to note: The most important aspect of dental practice promotion is the LOCAL PROMOTION.
For that, you need to be very active in your local community. Here are the activities that you can carry out to make yourself & your dental practice known in the city and your local community.
How to make a Presence in your Community as a Dentist?
- Attend local social functions and be a sponsor of the local events.
- Make contributions and deliver speeches on dental career/care in school, colleges and community gatherings on health care & awareness.
- Attend treatment camps being conducted by other doctors & organizations.
- Visit rural places to provide dental treatment.(for free)
- The goal is to make yourself visible in your local community.
- Slowly & steadily you will climb the ladder up.
- Buy print ads to promote your practice in local newspapers or try to write health articles in the local magazines.
- You can also use Radio for speech & promotion. Spend money in purchasing an evening slot on Radio to promote your dental practice. That is one of the easiest ways to get close to your local community.
- Don’t spend too much on online marketing. Your clinic is not an online market like Amazon. Your promotion must target the local population first.
- Don’t over-estimate social media and Facebook promotion. That is better for big corporations and websites. When using social media ads, then it is advisable to target people within a radius of 10 Km of your dental clinic.
How to get NEW patients for your dental practice? Read the 9 effective ways to do so here:
See Next Slide: for next two points needed for starting a dental practice
Point #9. Build up your associate or consultation practice
Conclusion: The takeaway points from this post.
9. Build Up Your Associate and Consultation Practice
This point is especially applicable if you are a specialist dentist, for example, an Orthodontist. Give consistent efforts in establishing a connection with other dentists in and around your locality.
There is a great potential in being a consultant dental specialists to other dental practices. It will work in two ways – you will develop a secondary revenue stream & also will be more known in the dental sector.
It is is not an overnight effect. You will need to be consistent in your efforts. You will also need to be courteous and respectful to your fellow dentists. Arrogance will never work.
So, have some humility. Never have an attitude that being a specialist in a particular stream of dentistry makes you superior. Such orientation and behavior always causes trouble and makes you disliked in your professional community.
Conclusion: The Take-Away Points
If you have read the article till the last slide, it shows that you are motivated to be successful in your dental practice. That is the most crucial point of all this discussion.
- You have to be internally motivated to succeed in this highly competitive world of dentistry.
- Always strive to follow a good work ethics.
- Respect your fellow dentists. If you feel someone is trying to spread bad words about your practice, then there is no point in confronting openly. Be cautious and keep improving your works.
- Never default on your dues to your business network (technicians, material suppliers, and others.) That casts a very negative impression about you.
- Be calm in your everyday dental life. Remember, patience is the key to success in your dental practice.
That concludes this article. I sincerely hope that this article was able to provide you with valuable inputs about setting up your dental practice.
Now you know the primary points to take care while opening a dental practice.
One other aspect that every dentist must control to have a successful practice is “Mistakes.”
One dentist Dr. Varun Bajaj (with nearly a decade of practice experience) has explained 10 mistakes that every dentist, who is planning to start a dental practice, must never make. Read the hilarious article below:
Let’s recap the points that will propel your dental practice to newfound success in the form of an infographic.