Planning for Your Practice

““Success is 20% skills and 80% strategy. You might know how to succeed, but more importantly, what’s your plan to succeed?”

- Jim Rohn

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Why?Why are you writing a business plan?Secure funding? Attract an Associate?

Personal goals?

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Who?Who is your target audience?Just you? Another dentist? Your team?

A banker or practice management consultant?

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What’s In ABusiness Plan?Overview of Main Components

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Executive Summary◇ Single page

◇ Overview of plan contents & purpose

◇ Includes mission & vision statement

Easiest way to draft an Executive Summary – write it last

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Practice Description◇ Who is starting the practice?

◇ Where will the practice be located?

◇ What type of dentistry will the practice provide?

◇ Description of the office – reception, number of operatories, break room, sterilization area, etc.

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About the Dentist(s)◇ Draft a personal statement (first-person)

◇ Include a Curriculum Vitae:

◇ Licensure & Certifications (include dates)

◇ Education (undergrad & dental school)

◇ Professional Experience

◇ Professional Memberships

◇ Continuing Dental Education

◇ Volunteer Work (if recent and relevant)

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ServicesWhat kind of dentistry are you providing?

Consider whether you’re going to specialize in a particular area of general dentistry (cosmetic, restorative, etc.)

List the services you plan to provide

Group by type, make it easy to understand (depending on audience)

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Who Are You Serving?◇ Target demographic(s)

￭ List at least 3-4￭ Based on age, lifestyle, socioeconomic

status, proximity to the practice, etc.

◇ Why are you targeting these demographics?

◇ What makes the demographic “special”

◇ Which services will most appeal to each demographic?

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Demographics

How many potential patients are in your area? Include a breakdown of the population in your practice’s zip code

(Pro Tip: Realtors & marketing consultants have some of the best demographic analysis surveys)

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Competitive Analysis◇ Who is your closest competition?

￭ Proximity (include a map)￭ Specialty

◇ Why are they your competition?￭ Services￭ Fee structure￭ Patient demographics￭ Corporate or private practices

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You Can Only Pick Two

Cost Quality Convenience

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S.W.O.T. AnalysisStrengthsInternal

Examples: financial stability, low owner debt, years of experience practicing dentistry, practice location, niche service offerings, etc.

Weaknesses

Internal

Examples: poor credit, high owner debt, recent graduate/less than two years of experience practicing dentistry, etc.

OpportunitiesExternal

Examples: demographic advantages, nearby businesses, proximity to dental specialists, etc.

Threats

External

Examples: legal/regulatory changes, economic downturn, proximity to competitors, market saturation, etc.

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Current Financial SituationBe honest.

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Use a Balanced Scorecard to Set Strategic Goals

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BSC - 4 PerspectivesFinancial (Shareholder)

To succeed financially, how should you appear to your shareholders?

Patient (Customer)

To fulfill our mission, how should we appear to our patients?

Practice (Internal Processes)

To achieve our vision, what internal processes should we excel at?

Employee (Learning & Growth)

To develop & retain our team, how should the practice appear to our employees?

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Setting Goals◇ Set short- and long-term goals

◇ Use measurable metrics

◇ Make subjective goals objective

◇ Set relevant, practice-based goals

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Financial Perspective◇ Key Performance Indicators (KPIs)

￭ Higher profit margin￭ Improved cash flow￭ Reduction of overhead

◇ Revenue mix￭ Fee for service vs insurance￭ Hygiene vs dental procedures

◇ Benchmarks￭ Other general practices￭ Historical data

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Patient Perspective◇ Increased patient satisfaction◇ Patient retention◇ Revenue per patient◇ Internal referrals◇ Patient preference to competitors◇ Consistent experience

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Practice Perspective◇ Operational Efficiency

￭ Decrease patient wait times￭ Expedited decision-making/bottleneck

reduction￭ Patient-relationship management

◇ Revenue Drivers￭ New Patient appts￭ Case/Treatment acceptance￭ Decrease delinquent accounts

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Employee Perspective◇ Employee satisfaction & morale◇ Alignment with personal & practice goals◇ Professional development◇ Developing critical skills & knowledge◇ Turnover◇ Total rewards

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Balanced Scorecard Template

Goal Metric Target Initiative

Financial

Patient

Practice

Employee

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Strategy & NumbersMarketing Plan

Tactics, timeline, & budget

- Advertising & Promotion

- Networking & Referral

- Budget for Year 1

& Year 2

- Pre-launch & Year 1 Action Plan

Operations Summary

Daily operations, key personnel, & equipment

- Organization

- HRM Plan

- Advisory Team

- IT & Equipment

- Patient Service

Financial Summary

Setup of practice’s financial structure

- Accounting system & controls

- Fees schedules

- Officer salaries

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Marketing Plan◇ Graphic Designer/Branding Consultant

◇ Website – Hosting platform, design platform, Web Designer/Consultant

◇ SEO/Online Reputation Management

◇ Social media platforms/management

◇ Materials - literature, business cards, direct mail, etc.

◇ Internal promotions – contests, prizes, programs

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Networking/Promotion◇ Specialists

◇ Associations/Organizations

◇ Events

◇ Local affiliations

◇ Charitable donations

◇ Referral drivers

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$15,000-$50,0001st Year Marketing Budget for New Practices

2-6% of CollectionsAnnual Marketing Budget for Established Practices

5-10% of CollectionsAnnual Marketing Budget for Growing Practices

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Operations in Your PracticeThis is your practice – think about what that means.Who will you hire? How will you manage your team? How will your patients be served? What technology will you need?

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What will it cost?

Human Resource Management (HRM):Primary Functions

◇ Planning & Organization◇ Recruitment & Selection◇ Compensation & Performance◇ Training & Development

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Organization◇ Positions in practice

◇ Chain of command / organizational structure￭ Org chart (flow)

◇ Identify key roles

◇ Include job descriptions

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Recruiting◇ How will you find potential candidates?

￭ Placement agency?￭ Indeed – Zip Recruiter – Other￭ Social Media￭ Referrals/Networking

◇ What qualifications are you looking for?

◇ What does your selection process look like?

◇ Cost

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Total Rewards◇ Pay range for each position?

◇ Benefits?￭ Paid Time Off – Holiday, Vacation, Sick￭ Health Insurance￭ Retirement Savings￭ In-house benefits

◇ Continuing Education?

◇ Customized Bonus Structure

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Base Salary PTO Payroll Taxes Bonus

Total Rewards

$16 x 36hr/wk (50 wk) = $28,800/yrHourly Rate (Base Pay)

$33,841Difference from Base Pay

[72hr/yr (PTO) + 48hr/yr (Holiday)] x $16/hr = $1,920/yrPaid Time Off

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$30,720 + $614 (2% bonus) = $31,334 (Total Pay)Bonus & Incentives

$31,334 + 8% =Payroll Taxes (Est.)

$5,041

Total Rewards

Illinois Minimum Wage Increases

◇ 1/1/2020 - $9.25/hr

◇ 6/1/2020 - $10/hr

◇ 1/1/2021 - $11/hr

◇ 1/1/2022 - $12/hr

◇ 1/1/2023 - $13/hr

◇ 1/1/2024 - $14/hr

◇ 1/1/2025 - $15/hr

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Training & Development◇ Required training

￭ HIPAA￭ CPR & Emergency

◇ Initial/Orientation￭ Software/tech￭ Office procedures￭ Clinical procedures

◇ Ongoing￭ L&Ls￭ New products/services￭ Conferences

◇ Continuing Education￭ RDH & RDA

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Rules for Paying People◇ W-2 vs 1099 – Employees or Contractors?

￭ Do they do the “business of the business”?￭ RDA, RHA, Admin, Associate – Likely employees￭ Marketing (maybe), construction, janitorial, landscaping

– Likely contractors

◇ Exempt vs Non-Exempt (salary vs hourly) – Must meet qualifications to be “salary-exempt”

◇ Paydays – 2x/mo minimum for non-exempt employees

◇ Everything runs through payroll

◇ You pay for all mandatory work time – including training, CE, L&L, meetings, (most) travel, etc.

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Building Your Executive Team◇ Insurance Broker - Workers Comp, Business, Disability

◇ Financial – Bookkeeper/Accountant, CPA, CFP

◇ IT Management – Network, Website, VOIP, EMR

◇ Attorney (Business/Contracts & Employment)

◇ Marketing – Strategy, SEO/Rep. Management, Designer

◇ Practice Management Consultant

◇ Transition Specialist/Broker

◇ Other – HIPAA or OSHA Training, HR Recruiter, Investor

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Technology & Equipment◇ Dental equipment (not supplies)

￭ How many ops? Available vs. initial￭ Lab?￭ Advanced equipment for specialized procedures?

◇ Computers, tablets, phones for employee use

◇ Tablets & TVs for patient use

◇ Accepting payments

◇ Medical Records Management – EMR? ￭ Patient portals accessed via website￭ Ensuring HIPAA compliance

◇ Billing service vs. in-house

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Cost?

Patient Service◇ Consistent patient experience

◇ Coffee/water in reception?

◇ Kid’s area?

◇ TV – streaming services? Headphones?

◇ Free products or services?

◇ Take home samples?

◇ Literature & branding – printing, educational materials, practice-labeled products

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Financial Summary◇ Accounting System & Controls

◇ Fees

◇ Officer Salary

◇ Financial Projections (Exhibit A)

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Action PlanWhat is the timeline for your next steps?

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Exhibit A: Financial Projections◇ 5-year Income Statement

◇ 3-year New Patient Revenue

◇ Practice Note Amortization Schedule (Est.)

◇ Use of Loan Proceeds

◇ Year 1 & Year 2 Cash Flow

◇ Year 1 & Year 2 P&L Estimation (Incl. tax implications)

◇ Breakeven Analysis

◇ Officer Payroll

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CE Credit Question◇ Which financial statement will most

of your budget numbers come from?

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Profit & Loss (P&L)

Thanks!Any questions?Kara D. Kelley, SHRM-CP, SPHR

◇ Email: kara@clinicalhr.com◇ Call or Text: 512-876-4866

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Credits◇ Presentation template by SlidesCarnival◇ Photographs by www.DreamsTime.com

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