1. 1. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 1 SMILE STARS DENTAL PRACTICE LLP PARTNERSHIP NUMBER OC394550 BUSINESS PLAN VERSIION 1.61 (Release) 11th February 2015 Registered Partners: Mr Mark Weston Thurston, Ms Rebecca Jane Gumm Proposal for an independent dental practice which utilises a novel, multidisciplinary dental team approach, and a modern, efficient, caring level of service. CONTENTS LIST PART 1 COMPANY 2 Business Summary 2 Investment Proposal 3 The Company 4 Premises 7 PART 2 FINANCIAL 8 Cash Flow Analysis 8 Assets vs Liabilities 9 Pricing Structure 10 Projections 11 PART 3 OPERATIONS 12 Success Factors 13 P.E.S.T.E.C. Analysis 14 Company Assets 15 Marketing 17 Contract Elements for all shareholders 18 GLOSSARY OF TERMS 20
2. 2. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 2 PART 1 COMPANY Business Summary Smile Stars Dental Practice LLP (The Company) currently comprises a number of assets but does not have premises from which to carry out business. A number of further assets have been brought into the company by the directors and can be considered as company stock. The current shareholders are Rebecca, a Dental Hygienist since 1999, and Mark, a Dental Nurse since 2005, and a Practice Manager. Further external investment will be required in order to convert existing premises into a standards-compliant dental practice and for promotion and cash flow as the company establishes itself. The name of Smile Stars Dental Practice has partly been constructed to comply with legal obligations as dental is a protected name, the General Dental Council require that the sector within the dental industry is validated hence the extension of the name. Smile Stars was selected from a list of names, to represent stars as being a team of skilled individuals, smile being the aim of the service provided, and the whole name being very family-oriented with scope for an original, friendly brand image and logo. The business has two major unique selling points firstly we are pioneering a new team structure only recently enabled by law, to make sure that patients see the right clinician for their needs, in a cost effective manner which benefits both the company and the customer. Secondly we have unique childrens care proposition in our Blue Cat paediatric dental chair which has been imported and uprated directly, and which already has a track record in delighting children and causing them to run to the chair, and be relaxed while in treatment a particular asset to a dental therapist who has specific training in treating children. This paediatric dental chair could be the basis of a secondary import and resale revenue stream as the modifications necessary for use of this chair in the UK were made in-factory. This revenue stream could be activated at an appropriate time perhaps when exclusivity has created demand this could also be important leverage for a bundled-with-franchise only model. This company will focus on prevention services, with limited reliance on a dentist for a day-rate to perform check-ups and a percentage-total payment for any advanced treatment (set out later in this document), using maximum referral to the hygienist and dental therapist for routine treatment. (Who could be a potential shareholder in the business, or employed by the practice). A unique feature of this practice is that the upward and downward flow of referrals and patient care is leveraged to its maximum. The company is arranged to benefit all shareholders, as well as other staff and parents, rather than focusing on the fortunes of an individual. In common with other areas of medical practice, Dentistry is a highly regulated industry and profession. There are two principal regulatory bodies who oversee the practice of dentistry in general primary practice :Care Quality Commission (CQC) who oversee the operations of individual providers also answerable to:, Information Control Office (ICO) regarding data protection and confidentiality, Public Health England for usage of X-Ray equipment and hazardous material management, Department of Health (DoH) for clinical protocol, Practice Insurance Provide, Specialist Waste Collection, General Dental Council (GDC) who broadly protect the rights of patients and produce the regulatory framework of individual dental care providers, from education curriculum onward, the NHS Care Commissioning Group (CCG) if an NHS contract is to be held brings its own auditing and quality assurance framework.
3. 3. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 3 The greater Birmingham and Wolverhampton area have a combined population of 1,500,000 which has historically had a largely manual workforce with poor levels of oral health. The neighbouring Black Country region has a lower rate of oral health than these metropolitan areas. We are open to the possibility of a contract to provide NHS Dental Care services, but the process to bid for this is an expensive and involved process, ideally needing an individual with inside knowledge and experience of making such a bid. On this basis we would consider making such an individual a business partner. The target demographic would be office and professional workforce, extending to working families with young children. Particular areas of interest are nervous patients looking for a refreshing dental care experience, or those who have not seen a dentist for a number of years. There are likely to be customers who are dissatisfied with their NHS dental care, and are looking for a new value proposition. Key Features of the business. Based on a private model using the word independent to suit the client base. Utilising the whole team to its full capability within the prescribed legal framework (General Dental Council Scope of Practice September 2013) allows for a cost effective practice which provides a high level of customer satisfactions each clinical unit performing the tasks which provide them with the most appropriate professional interest. Cost effectiveness to the practice passed on to the patient and reflected in annual dividends, while still permitting reinvestment in the business keeping it cutting-edge. A specialised childrens chair, imported and modified to a unique specification making it the first of this type in the United Kingdom (this chair, in standard factory form, is used in other parts of Europe and has an official import partner in the USA). The opportunity to outreach to pre-prep independent and private schools as well as upscale residential care facilities with a mobile dental unit van. A sound template for a future franchise model, leveraging an open offer to us for an exclusivity contract in the UK of the childrens dental chair, and uniquely planning around the full team approach. Investment Proposal The investment proposal for an incoming partner is 50,000 in exchange for 40% ordinary shares in the business. The existing partners are willing to accept a proposal of up to 50% (at their discretion), which can be formed of either 65,000 ordinary shares, or equivalency in expertise, intellectual property, or the ability to add value to the business through nationally recognised training or assets, combined with a cash investment of 50,000. A number of suitable locations have already been identified, but any recommendations from the investor would also be welcomed. Property selection factors are listed below, but property specifics are not included due to market churn properties are held on file. 40% - 50% Incoming partner Investment represented by: 25,000 initial building conversion costs (this is currently an estimate pending quotations) 7,000 for professional fees including practice indemnity 8,000 towards running costs 10,000 for year 1 marketing
4. 4. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 4 Childrens Dental Provision A few quotes which support our investment and model of childrens dental care: Parental modelling has proven to be a powerful means of establishing novel behaviours among children, such as tooth brushing behaviour. 2. Smith, A. & Freeman, R. Remembering and repeating childhood dental treatment experiences: parents, their children, and barriers to dental care J. Paed Dent. (2009) Wiley : London Children are dependent on their parents for their general physical and emotional wellbeing. Parents function as role models for their children with regard to adoption of every-day dental health behaviours and absorb dental health attitudes, particularly from their mothers. Furthermore, the dental health behaviours of parents, both recent and past are thought to be fundamental in forming a positive environment for the adoption of good dental health. Okada, M., Kawamura, M. et. Al. Influence of parents oral health behaviour on oral health behaviour of their school children: an exploratory study employing a casual modelling technique J. Paed. Dent. (2002) Wiley : London It is very important that the younger patient is not simply treated like a mini version of the older one.4 Crossley, M. & Josh, G. An investigation of paediatric dentists attitudes towards parental accompaniment and behavioural management techniques in the UK Brit. Dent. J. (2002) Nature : London The childrens chair is the only one of its type within the UK and has been uprated to an appropriate, compliant specification and is fully functional for treatment delivery. In our experience children have run from the waiting room into the surgery and jump on the chair then immediately sit and settle. Clinical staff have given scale and polishes and deciduous fillings easily with this unit. They have no fear and will grow up being comfortable with visiting the dentist. The provision of a childrens facility which has an area which is for learning tooth brushing and overall daily oral health routine helps good habits form early. There is a potential opening to use The Wand as a more easily accepted method of delivering local anaesthetic this is a computer controlled delivery system (pictured) which forward-delivers anaesthetic before and while the needle is inserted into soft tissue, and provides a constant flow rate which is said to ensure a less traumatic injection. The system has been on the market for a number of years and has been reasonably well adopted, and is said to be very effective for children.
5. 5. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 5 The Company The purpose of the business is to provide affordable, caring dental services which fully utilise the new dental auxiliary (dental care professionals) categories introduced since 2002, creating an efficient and cost effective teamwork-led approach to the delivery of general dental care in a format that may be replicated to a group model once the model has been refined and proven to be effective. The company also aspires to have transparent pricing to the customer by averaging risk between treatment and clinical situations rather than by loading the risk e.g. potential cost of treatment vs. potential inability for patient to pay / Did Not Attend statistics vs. cost to business for provision of the service. An objective of the company is to be profitable. This business stems from the initial ideas of Mark Thurston and Rebecca Gumm, both DCPs from different backgrounds but with the same vision of care derived as a response to the growing complacency of corporate dental providers who formulate a very traditional model and dominate the NHS dental sector, largely removing the caring element by using a box-shifting accountancy model as low down the hierarchy as practice manager level. If a sprinkling of consideration of patient care remains this is normally re-introduced by a practice manager, at practice level, who has a historical background within the health and care industry. We believe that genuine patient care should be part of the core of any healthcare practice, since delivery of a health care service is the purpose of the business. In the dental services provision marketplace Smile Stars would be at the accessible private provider end of the private market not in the league of price slashing in the way of Poundland et. al in the retail model, but rather accessibly mainstream in promotional approach, but cost-effective to the consumer in the pricing structure itself. The company has very strong marketplace links with two dental material manufacturers GC Europe and SurgeryClean who have contributed notable free advice and product to the business in its early stages and who support our aim to establish the new practice. A quantity of dental equipment is owned by the company, and is held in a secure storage facility. The company has listed contractors who could help with the commissioning of this equipment. Additional staff required Finance We should have an accountant and bookkeeper in place before the practice manager is working full time hours between existing employment and SSDP. Sales Sales are critical, and new customers need to be continually found. We should be looking to recruit a sales presence, even if contracted, within five months of opening. Product Delivery the additional need in this area would need to be in an additional dental nurse for two to three days per week, happy to cover reception and to promote our brand image. Additionally locum staff lists should be compiled for dentist, hygienist, therapist and to cover at least one dental nurse.
6. 6. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 6 The problem A number of people feel dissatisfied with NHS dental treatment overall, from the facilities, through to getting an appointment, through to the clinical staff themselves. The same people are often fearful of going private due to the perceived up-front costs involved in even getting a check-up. An independent rather than private designation suggests a step up for NHS customers. The major strength will be in delivering the basics of routine dental care and very high-grade prevention services with the love aspect thrown in eg. The staff care about what they do, about the impression they are creating, and about their surroundings and quality of care. In short the aim to deliver routine private care that justifies its cost premium, without being overpriced for the majority of the population. Private Service should mean: Waiting is like a rest or break, not just a wait. Different treatment options are available, including the best. No long waits a fortnight is healthy, a month is unfair. Comfort for patients Good staff working conditions for a contented workforce. Service and results worth talking about. This can be added to the general practice of dentistry, fulfilling common wants and needs of individuals: Solves a problem they have Pain or issues of appearance Saves them money Its right where they work so no travel Saves them time Again no travel, less time off work, often under 1hr Prevents worry Fear and uncertainty of the local dentist Making them feel and look good Thats a goal of preventive of cosmetic dentistry Create an opportunity for them would be an excellent further goal to strive towards. Strengths Analysis from previously managed practices. The list below lists the positive insights and opportunities which should be capitalised upon in the new practice. Direct Access to the hygienist and therapist Local deals on partnering type locally-maintained websites Effective promotion of hygiene upsells e.g. air polishing, retail products In-depth and informative check-ups backed up by high quality delivery of dentist-led treatment Protocols for building in repeat visits and routine dental hygiene visit intervals at initial visit. Novelty in the premises and the experience unafraid to do different. Separate spaces / environments for children (and adults!) Good out-of-hours patient communication through a call handling service Did Not Attend patient event management lost income management Location with passing foot traffic (not just drive-by), and good promotional opportunity Location within a densely populated area with limited or linear dental service provision. Pre-planning earnings for each team member by charging fixed rates and planning for maximums.
7. 7. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 7 Customer Proposition The customer proposition is a well-appointed retail-style experience where they can relax in modern surroundings with space and time to think and work, while being well informed of their appointment time, what is on offer to them, and being met with personal service and an optional drink so that they are refreshed and relaxed by the point of being called into surgery. In surgery, customers will be well informed, shown the reason that treatment is needed (or given the benefits and risks if the treatment is elective), and appointments will not be unduly hurried. The clinician and customer will both have the time they feel is appropriate for the treatment and the clinician will set the appropriate price in line with the prescribed pricing of the practice. The customer would find this a refreshing addition to my usual dentist experience, with option to continue with their own practice for more major treatment (we can log interest in more advanced cosmetic procedures) but also provide an easily accessible no-pressure reintroduction to dental care for individuals who have phobia. Perspective treatment pathways: 1) Direct to Dental Hygienist through a Direct Access registration. a. Fixed rate to hygienist per hour 2 patients per hour (50% of airflow upsell) 2) Dentist referral to Hygienist / Therapist (occasionally returning to Dentist) (5% kickback on completion of referred treatment plan) a. Half-day rate covering dentist assessments with Dentist, Fixed hourly rate to hygienist / therapist 3) Hygienist referral to Dentist (likely referral to Therapist) (direct access referring to dentist for full check-up) 4) Dentist only. (advanced treatment which need to be treated by a dentist 50% remuneration) Premises The equipment available would allow for up to 3 fully operational surgeries (2 adult surgeries and 1 dedicated childrens surgery) with a separate decontamination facility as now required by law. The premises (at the advised location) would be split over 2 levels. Additionally a reception / waiting area, toilet, and staff welfare and storage area would need to be provided. Priorities in identifying suitable premises are:- Located within a retail hub Sparse dental provision serving dense and varied population Economically improving district Indications of successful new approaches to retail / service provision in the district Direct external access Opportunity for prominent signage Floor space of 750 1000 sq ft Open main areas of floor space for later partitioning for 3 surgeries and waiting room + staff. Kitchen and toilet facilities heated mains water, mains waste drainage, ample electrical provision. Cost effective annual rates ideally 10,000pa with business rates below 5,000pa. Ideal opportunity would have picture-window ground floor positioning with on-site parking.
8. 8. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 8 PART 2 FINANCIAL Fig. 1- Initial Cash flow Analysis Per Session 4 hour half day, fully booked (8 patients per session). (Including 2 dentist sessions per week). These figures represent the basis for year 1 and 2 projections see financial data. Dentist half day 150.00 Hygienist or Therapist 120.00 Dental Nurse / Reception 36.00 Practice Manager / Dental Nurse 48.00 Premises Lease Inc. business rates 30.24 Materials 12.50 Water / Electric 1.67 Half day session with dentist 398.41 Two-DCP clinical session 368.41 (This translates as 50% chair occupation per session) Minimum Income per 30m 24.91 Annual Operational Costs 23093.20 Dentist Annual Costs (plus nurse) 11544.00 TOTAL MINIMUM OUTLAY 34637.20 PER SESSION INCOME REQUIREMENT 66.61 (income of 8.32 per 30m on fully booked session). Minimum Customer Rate per 30m 43.75 once fully booked. For children the practice needs to offer a reduction over adult prices therefore adult prices should be slightly higher than this minimum to allow for such potential variation suggested minimum rate 47. Breakeven annually for YEAR 2 onwards is set at 35,000. Income predictions are year 2 30,000 and year 4 40,000. These figures demonstrate that even if every customer had only a dentist examination and 30 minute scale and polish this is sustainable. Unrelated rate for dentist check-up = 150 divided by 8 = 18.75. Fig 2. Assets vs Liabilities Offset 53,488 ASSETS LIABILITIES Material Assets 70,000 Long Term Liabilities (4 yrs) 39,000 Setup Costs (pre-operational) 2,000 Goodwill 40,000 Lease (annual) 10,000 Services (annual) 3,000 Rates 4,512 TOTAL 110,000 TOTAL 58,512
9. 9. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 9 Control factors and considerations for setting pricing. Setup Costs (pre-operational) Indemnity, Care Quality Commission Registration, Pre-Insurance Pressure Vessel checks. Services (annual) Electricity, Water, and Insurance. Calculation of payment to dentist - 150 per session (half-day consultations per week). (7200 p/a) o on the basis of consultations and referrals to hygienist and therapist. Smile Stars would pay 50% for any advanced treatment on the basis that anything mainstream was referred and 5% for any referral with treatment completed by a DCP. Calculation of payment to hygienist / therapist - 120 per session (46,080 p/a for 4 days per week) (half day treatment) 4 hours with nurse. Sales of products (every member of staff including nurse, manager if promotion initiated at desk) Fresh Start pack 5% commission, Start Plus, Premium Start packs 10% commission. Electric Toothbrush 15% commission. Nurse salary 9.00 p/h employed qualified, Practice Manager Salary 12.00 p/h employed qualified. Total practice income before deductions for year 1 would be 20,000, with a 10,000 annual increase over the first three years. A minimum of 40 minutes is recommended for a DCP carrying out treatment under Direct Access, to allow for a proper assessment of patient needs to be undertaken prior to commencing treatment. 0.00 20,000.00 40,000.00 60,000.00 80,000.00 100,000.00 120,000.00 1 2 3 4 5 6 7 8 9 10 11 12 Month Fig. 3 - Cumulative Sales & Costs / Break even point - Year 1 Cumulative Sales
10. 10. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 10 Fig 3. Smile Stars Dental Practice LLP proposed price structure November 2014. It should be noted that we are intending to raise the major treatment item costs by 25% after either 3 or 6 months (depending on patient numbers), and the prices shown will be advertised as opening offer rates. We will exclude check-ups and dentist-only treatments from these increases. ITEM PRICE (FPI) FULL PRICE after 6 months NHS Equiv. Check-ups (including digital radiographs) 25 (children 6-14 19, children under 6 FREE) 18.50 Fillings / Extractions 30mins 60mins 48 - 96 (children 34 - 68) 60 - 120 (C 42.50 - 85) 32.00 Hygienist 30mins 60mins 42 - 84 (OHI + Retail 25) (children + OHI 30) 52.50 - 105 (O 30) (C 37.50) 32.00 (15mins) Direct Access Immediate Hygiene + Air (Polish Only) 70 (Polish 20) 85 (P 25) N/A RETAIL Fresh Start pack (basic) 4.99 Toothbrush, Toothpaste - RETAIL Start Plus pack (standard) 14.99 Toothbrush,Toothpaste,Floss, Tongue Scraper - RETAIL Premier Start pack (advanced) 24.99 As Start Plus also Mouthwash, I.D. Brush Gel, I.D. Brush - Treatment Provided by Dentist only. 50% of fees below to remunerate dentist Tooth Gems 30 - Root Canal Treatment 150 - 300 32.00 - 190.50 Crowns, Veneers (including lab fee) 200 - 350 190.50 Prescription (Dispensed on-site) 5 8.05 (at pharmacy) Referral Letter 10 0 Emergency Call Out fee (add) 50 0 Example Patient Scenarios (single course of treatment) Little Johnny Toffee high-risk child with active caries, age 10. Check-up 10 Hygienist / OHI 30 Filling x2 68 TOTAL COST 108 / CLINICAL TIME 110 mins. Billy Briefcase educated adult who takes responsibility for health but has lapsed over the last year. Check-up 15 Filling x1 48 Hygienist x1 42 TOTAL COST 115 / CLINICAL TIME 80 mins.
11. 11. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 11 Worried Winnie has not been to dentist for n years. Unknown but poor state of Oral Health. Direct Access Immediate 75 Check-up 15 Hygienist (additional DPC etc) 84 Fillings x2 96 Extraction x1 48 TOTAL COST 318 / CLINICAL TIME 215 mins. Financial Analysis Please see enclosure Financial Data for data tables. The product types which this practice provides can be distilled into five categories: 1. Dentist check-up 2. Hygienist service delivery 3. Therapist service delivery 4. Dentist service delivery (the highest cost, reserved for high-margin items) 5. Retail Sales Due to the team-working approach, combined with the ability for patients to see hygienist, therapist or dentist initially according to their personal preference, and for cross-referral within the team, it is anticipated that the Hygienist and Therapist operation will see roughly the same number of patients per month (perhaps some more due to increased availability) and will make a combined contribution of that roughly similar to the high-cost, high-margin treatments which can only be performed by a dentist. It is also anticipated that retail sales should track service delivery at around ten percent - with our experience the margin can by high, up to one third of wholesale price. By assessing the figures and the need for new patients (to supplement a returning patient base after the first six months, and to cover for those who do not return), is to recruit ten new patients every week as a target over at least the first two years. For this reason Smile Stars needs to be targeting at least one hundred quality leads per month in a high-profile manner. From the financial data, looking to provide a financial investor with a good return within a realistic timeframe, a dividend of forty percent of net profit to be paid annually is recommended, proportional to each member, and each member should also draw a salary. The model needs to be working fully, with patients being led from check-up to hygienist and therapist, and a select portion of these patients receiving more advanced treatment from the dentist this could include whitening, as long as the margin could be kept to at least one hundred and fifty pounds. A year-one high-five figure income will require commitment from all staff involved, but the model indicates low overheads the year one figures can be achieved on one-day-per-week equivalency from all three key service providers, rising to one and a half days at the start of year two, and to two full days half way through year two. Marketing to a high standard will important and will require significant financial investment on a continual basis (perhaps quarterly measures should be put in place for this). The annual profitability is roughly 25% of turnover. All staff are additionally paid their appropriate pro-rata salary in addition to this figure. A four-figure dividend in addition to salary makes this a worthwhile proposition.
12. 12. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 12 Projections on overall performance Turnover Profit Dividend (30%) Year 1 125,796.50 73,781.30 29,512.52 Year 2 196,252.80 80,071.20 46,472.64 Year 3 243,112.80 155,841.60 62,336.64 Year 4 248,225.90 123,130.50 36,939.15 Year 5 305,825.90 149,102.50 44,730.50 Unit Sales Check-up Hygienist Therapist Dentist Retail Year 1 630 531 531 168 570 Year 2 1170 1170 1170 168 720 Year 3 1536 1170 1170 168 720 Year 4 1536 1536 1536 168 720 Year 5 2304 2304 1536 168 1125 The majority of patients would be advised to return for a 6 month recall check-up, which halves the number of actual new patients that need to be sourced each year. Additionally, most patients will be sent down one or more of the other clinical pathways, and towards a retail recommendation, as part of each set of planned treatment. Additionally, the dental hygienist, dental therapist, and the retail section can make sales without a check-up being required. The figures are created in line with per session figures. The first six months of operations involve each clinical unit working a single session per week, extending to one full day. In year two - one full day per unit, year three - one and a half days of check-ups to create a forward-bookings scenario, year four - one and a half days per unit, and year five - a full day week.
13. 13. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 13 PART 3 - OPERATIONS Long term patient retention / forward and repeat bookings It is generally considered good business to show demonstrable methods of motivating patients to stay committed to us as their sole provider of general dental care. Within dentistry the major buy in model for providing this is the Practice Payment Plan where a third-party (who is regulated by the Financial Services Authority) holds a frameworks for patients to make payments to them, with a high proportion of said payments then being passed on to the practice as a monthly transfer in exchange for providing patients with pre-agreed levels of service within the scope of that payment. The three major plan providers are: -Denplan DPAS -Practice Plan. There are other smaller providers as well. The selected plan provider needs to understand, and weigh their patient offerings in a way that supports and contributes positively towards our full-team delivery model, so that the plan is not entirely dependent upon one (dentist) provider, and which ideally would allow for treatment under Direct Access without a prior dentist consultation where appropriate, rather than causing a bottleneck for delivery which many of the major plans can do. Other patient retention methods are welcome, and suggestions can be brought to the table. At this point the front runner is the Denplan Essentials range of financial products, as they have proven performance to provide the hygienist effectively. It is likely that as early pioneers, the practice will need to adapt the payment system of Denplan at practice level so that the Therapist is remunerated appropriately. Success Factors Critical Success Factors Finding at least 10 new customers per week, every week Every member of staff from receptionist to clinician needs to believe the message and sell the message which we work as a team to provide the best possible care at a fair cost. Having enough cash flow for dips in new customer numbers and for unexpected cost such as unplanned equipment maintenance. Having the right skill mix so that illness and other absence can be covered, and to provide essential support getting the marketing, financial, legal advice when we need it. Not trying to keep everything in house at the cost of productivity, morale or time better spent. A Business Day where the manager can perform business analysis, and where the board can hold private meetings in respect to business progress. Making sure that other staff understand the business management tools so that they could keep the business running in an emergency. Having locum staff in place, or a contact list, in case of emergency especially in respect of a clinician. Important Success Factors Supplies such as materials, equipment and retail products should always be in stock and available so that the business can continue to function fully, not to cause bottlenecks. Every member of staff should be trained to be comfortable with all aspects of their role.
14. 14. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 14 Key Person Coverage and Development A programme of continual development for the manager (who is often left to attempt to master new challenges without formal training) should be able to take formal training, along with the support team so that everyone can make maximum use of their scope. P.E.S.T.E.C. Threat Analysis Political - A change in political party would not directly affect funding in a private-fee practice, but policy changes could result in a change in governing Acts which may affect the use of dental auxiliaries or prescribing. This could result in a positive new opportunity, or in additional restrictions in ability to practice. Economic - Nothing economic would affect the business as an individual practice, but may affect the greater population and more directly our client base in terms of generalised financial hardship. This can affect customer attendance and the ability to attract new clients. Social - Trends in healthcare can change on an epidemiological basis, such as a trend moving away from tooth whitening, or away from prioritising healthcare in general. Technological - Technological innovations include the development of online retail, where goods and services can be booked and paid for online (our business could capitalise on this pre-book, pre-pay trend). Increased automation could enter the business via improvements in clinical software workflow, or equipment which assists and automates diagnosis (for example a current piece of technology, currently under evaluation is the Florida Probe periodontal charting system). Environmental - The main environmental impact for this business is ethical debate and impact. This could cover such current topics as the use of mercury in dental practice, the development of more ecologically sound or biodegradable materials. Competitor - Major competitor threats are imitation of progressive working styles and promotion / marketing, or price wars between dental practices within the same general area.
15. 15. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 15 Preparing for competitor actions Competitors can be very resourceful. A new competitor can be a trigger for them to redevelop the practice, begin an aggressive marketing campaign, and expand or simply to verbally slander our offering. As a new business ourselves redevelopment or rebranding would not be an option so the best form of defence would be a reserved proportion of marketing budget to counter any competitor marketing campaigns with an expedient, high quality offering of our own which effectively raises profile and quality expectations of prospective customers. Sometimes paid marketing is not the required solution, as long as the business encourages, acknowledges and reacts to patient feedback make changes and improvements where the business falls short the need for a reactionary campaign may never occur. Increased price-matching competitiveness could become a reality however it is important to remember that the practice pricing structure is based on genuine forecasts and that a competing private practice who is undercutting us is likely to be sustaining themselves sufficiently to continue their lower pricing for an extended period of time. Major company assets - Decontamination facilities including Prestige Ultraclean III washer / disinfector and Prestige Advance C3 Vacuum Autoclave. - Unique custom-specified Childrens dental chair (import from china, with CE approval documentation). - Cabinetry, glass partitioning - Patient list of Wow Dental Practice Limited (approx. 200 contacts, greater Birmingham area) - Delivery unit water filtration device - Staff room items. - Sonos music system (3 units) - Carestream imaging equipment I/O X-ray. 2x intra oral cameras, Digital X-Ray scanner, I.T. and till equipment. - 2x Tridac Eco Next dental chairs and delivery systems. - Full set of W&H Synea Fusion hand pieces with Assistina unit for 2 surgeries. - Solid-surface, acrylic fronted cabinetry which could be reutilised with some additional units purchased. - Glass partitions which could be used for surgery frontages. - Other fixtures and fittings.
16. 16. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 16 Proposed Mobile Dental Van In Birmingham, there were so many dental practices in residential areas that no need for a mobile dental unit really exists outside of the special care sector. However in proximity to outlying areas are a number of affluent residential areas which are quite cut off from the centre of the city, and surrounding villages. As an example, I found a 1994 low mileage dental van on eBay at the start of September 2014 with a starting bid of 3,000 with no bidding interest. The interior was essentially sound but the exterior would benefit from cosmetic improvement. Appropriate decontamination facilities (to satisfy CQC requirements) would exist at the main practice location, so storage and transportation facilities would need to be fitted. Marketing would be important to promote the presence of the van local libraries as a point of promotion and also as a delivery location have been put forward by colleagues. The question of whether this service would benefit from an NHS contract or would benefit patients by being outside of the NHS system needs further investigation, but with further thought and investigation this secondary solution could partially remove the risks and limitations of a fixed delivery location. More rural areas are the obvious target for such a resource, such as Black Country that have very little in the way of independent facilities and are largely dormitory. The plan would be to have a fixed rote once every 3 months ramping up to once per month in each location, with a low-key i.e. poster marketing preceding the arrival of the unit by 48 hours. A possibility of setting up a similar van with a childrens chair similar to the chair in-practice could be used for visiting by agreement and on contract to private pre-prep and prep schools in the same general areas. Marketing The sales and marketing process for delivering a non-utilitarian dental service has to be the same as for any other business with product to sell. That process is to find the customer (the marketing proposition), Research the product needs of the customer and their current supplier, make a formal introduction and assess the fit of the opportunity for the customer and ask for their feedback after delivery of the product, deliver that product and follow up the opportunity and delivery. The very first face to face enquiry is sufficiently important that absolutely every member of staff handles this situation with upmost respect and time for the customer if they are in the front of house area.
17. 17. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 17 The customer is likely to enter and say to whoever is on Reception Can I have a price list? The response should be Certainly, and let me take you through it. Would you like a drink? Followed by some key questions already helping the practice to tailor services for the individual: 1. How long since you last saw a dentist? 2. Had many problems? (that can mean with the dentist or dental health) 3. Did your previous practice have a dental hygienist, did you ever see them? 4. Are you aware of what a dental therapist does? 5. Are you looking to make any changes to your smile? 6. Can I take your details? Sometimes we run exclusive promotions. This logo was obtained from Google Images as an example of the Twinkle Star type representation (as also found in some pre-school Twinkle Twinkle Little Star nursery rhyme books in varying styles). This could form the starting point to a smiling star with a trail of smaller stars behind it, possibly with colour-keys (eg. a powder blue as a corporate colour, with baby-pink for the childrens area, pastel green for general adults). LivingSocial / Groupon type local deals website.. Brochure (pre-opening and month 1-3, to businesses and on desk for year 1) >500. Estimated cost 650. Flyers low cost (design and print approx. 300 for 250) to manage promotions, new innovations at the practice, staff news, oral health facts. Maximising signage on the building ground-floor overhead sign, 1st floor sign for King Street visibility, Banner and stand-out sign (all in use by current tenant). A-frame although placing may be problematic. For digital presence beyond groupon, a bespoke website with basic elements including tour, staff profiles and map should be constructed early along with a complete Facebook page inviting feedback. Social Media targeted marketing for students and young people to advise benefits for oral health and student-only offers. Emphasis on an easy-to-reach dental service offering not seeing the dentist first appointments via hygienist, and short wait times for appointments. The lighter dental option
18. 18. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 18 The Fresh Start Retail Packs The concept of the fresh start packs derives from the Orthodontic Home Care Packs which OrthoCare (a UK orthodontics supply company) produce and distribute to dental practices for resale, consisting of a clear cosmetics- type zip bag, an information leaflet, and a collection of appropriate retail items provided at a combined simple price (7.50 wholesale, 11.50 retail). The business is looking to expand on this concept with an in-house daily oral care routine product (which could mention products only included in the top-model pack as an upsell opportunity), and products which are selected and recommended by our dental team. A further benefit of packaging this way is stock control of retail lines, and by having a set total margin a staff incentive for selling these packs can be introduced. Proposed Pre-opening Survey Questions (constructed November 2014) 1. Do you think that there is room for a new dental practice in this central location? 2. If you have a dentist currently, who currently provides your dental care? 3. Does your current dental practice have an in-house hygienist? 4. Would you consider joining the practice or changing dentist if the new practice offers something more? 5. Do you think that the centre of Wolverhampton is the right location for an independent dental practice? 6. How much would you be prepared to pay for a dental check-up? 7. How much would you be prepared to pay to see a dental hygienist, if you could see one without needing to see a dentist first? 8. How much would you pay for routine dental treatment? 9. Would you pay for your children to see a dentist if they were given special care? 10. How much would you pay for your child to see the dentist and have treatment if they needed it? 11. If an independent dental practice was only a small step up in price over an NHS practice but delivered a lot more would you consider trying it? 12. Would you be interested in more cosmetic dental procedures if you had more information about them, or do you think that routine care is most important to you right now? Proposed contract elements for all shareholders A. Payments to shareholders The proposed method of payment to shareholders is purely by dividend (and certain commission arrangements which would be payable monthly). A dividend pay-out is made by the company annually, on provision that the company has made a profit as a whole that year. We would like to propose that the initial pay-out made by the company is 30% of total profits. This percentage needs to allow funds to the company for growth (in line with increasing patient numbers), improvement and maintenance (such as annual renovations to cover commitments to CQC and HTM standards or provision for changes to the above) the dividend is split proportionally to each individual based on their level of shareholding. If any individual requires a salary alongside a dividend, this must be a sustenance budget (in line with the legal meaning of this definition) and would form a blended arrangement which equates to their total dividend entitlement.
19. 19. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 19 B. Training, Development and Rewards. The current proposal would be to re-invest approximately 4% of practice profits annually towards whole- staff training and development on a fair, rotation basis so that every member of staff has the opportunity to develop. Training costs between 200 and 2000 depending on the course, normally the more clinically natured the programme, the more expensive. Rebecca has particular interest in studying clinical hypnotherapy to support treatment of nervous patients. In addition to support clinical practice she would like to refresh herself on implant maintenance, and radiographic diagnosis so that x-rays can be exposed without a dentist needing to be on site. Mark needs to formalise his management training, preferably through an Institute of Leadership and Management approved course, and would like to undertake extended duties training. It is also suggested that non-board staff should be given equal shares of 1% of overall profit, on an annual basis at the end of the financial year as motivation to enhance skills and knowledge, and to reward individuals for their support and commitment towards the overall growth of the business. C. Settling boardroom disputes The board is committed to giving fair consideration to every suggestion and recommendation put forward by any board member. If a board member raises a suggestion or concern at a formal directors meeting, but the suggestion is overruled (any acceptance at this stage must meet at least 60% approval), then the individual has the opportunity to appeal the decision within 10 days of the meeting. The method of appealing is as follows a written business proposal setting out the suggestion or concern and its impact on the business should be prepared and provided to the board members in a sealed envelope marked board decision appeal at the start of the business day. The remaining board members will consider the business proposal in isolation, and the content will not be discussed. At the end of the business day each board member will provide the nominated chairman of the board with their decision (decision upheld, or reversed). At this stage if 50% of the board approve the business proposal, the decision will be passed and added to the agenda for the forthcoming business month alongside other meeting outcomes. D. Reducing clinical hours Reducing clinical hours applies to board members (10% holding or greater) who have also committed to working within the practice towards financial goals. If a board member has a contracted number of clinical sessions (half day) or as modified by a written contractual amendment, and later find that they need to reduce their hours but are still seen as business critical hours to the business, this is accounted for in a 1.5% reduction in dividend per group of clinical sessions accounted for annually. E.g. if a DCP needed to drop a Thursday which they had previously committed to working, they would need to account for two (2) clinical sessions, which means a total of 3% would be reduced from their next and subsequent annual dividends if this was a continuous absence. The proceeds from these dividend reductions would not be reallocated to other board members, but instead would be used to pay the salary of the individual brought in to provide cover for those sessions. These reductions would be assessed annually based on an agreed percentage of clinical time which would be considered minimum over the course of a year e.g. minimum necessary clinical hours covered 70% (excluding statutory holidays).
20. 20. Version 1.61 (Release) SSDP1 SENSITIVE MATERIAL CONFIDENTIAL 20 E. Exiting the company Exiting the company for any shareholder on a voluntary basis would mean that the company is due to repay their original investment. It may be necessary to arrange for this to be repaid over a period of time e.g. 12 months from notice of resignation from the board. If the company is making financial losses at the time of departure, the current value of the business will be sought through third party valuation, and the relevant percentage of total value will be paid. Upon exit, no interest will be payable on the original financial investment (save for remuneration of any business devices e.g. items of value or intellectual nature which have independently assessed to have added financial value to the business overall. F. Share Arrangements The share arrangements are currently to distribute 100 ordinary shares among all shareholders, proportional to their financial and/or intellectual value to the company e.g. Mark 24 shares, Rebecca 26 shares, incoming shareholder (each share worth slightly more), 50 shares. The only exception to the 100 share policy would be if additional goods were brought into the company e.g. if a property purchase with additional was made external to, but on behalf of the company. In which case, additional shares would be issued to that individual GLOSSARY OF TERMS DCP - Dental Care Professional An licensed individual (non-dentist) registered in a disclosed capacity with the General Dental Council. OHI - Oral Health Instruction The delivery (by a dental professional) of educational information related to continuing self-care of the oral cavity by the patient / customer. Hygienist / Dental Hygienist Provides oral health instruction through education and delivers a range of preventive patient care either directly to the patient or under prescription from a dentist. Therapist / Dental Therapist As hygienist plus provision of direct restorations (fillings) for adults and children, as well as a full range of paediatric treatment under prescription from a dentist. Dental Nurse Provides clinical assistance of other clinical staff, primarily in the areas of cross-infection control and patient comfort. Dental Practice A place specifically adapted to delivering dental care to customers who opt to choose the service a dental practice is usually privately owned, and delivers first-point care. Department of Health Government department which is the overall commissioner and regulator of how healthcare is delivered in the United Kingdom Relevant document HTM:01-05 (2013) Decontamination in Primary Dental Care General Dental Council The industry-appointed internal regulator required by government statute to preserve patient interests Care Quality Commission The third regulator independent regulator contracted by government to inspect all care sectors.