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Dental Strategies For Success library

Planning Your Way to a Successful Start-up or Expansion

by Gavin Shea | 06/25/2015 | Practice Acquisition & Start-Up , Dental

2014 Dental Office Design of the Year - Group Practice Spodak Dental GroupTo successfully plan and complete a practice start-up or expansion project requires that you organize your tasks and schedule so you are prepared for each step in the process. So how do you get started?  If you?re not hiring a project manager and plan to oversee the project yourself, follow these basic steps to get your start-up or expansion underway.  Note that many steps will need to be implemented simultaneously.

Define your project plan.

Articulating your project objectives, expectations and strategies in a project or business plan will help ensure that you get the outcome you actually want. Your plan forms the foundation for your project and describes the direction your practice will take in the short and long term. Questions your plan should answer include:

- What is my practice philosophy or mission statement?

- What are my project objectives?

- How do my project objectives support my practice mission?

- What is my project budget?

- How will I finance the project?

- What is my project timeframe?

Determine your new office size.  

Once you understand your project objectives, you?ll want to determine the size of practice you plan to build as this drives every aspect of your office build-out, including the type and amount of financing you will need. 

- Calculate the number of operatories you plan to have, keeping in mind that each one can produce between $125K?150K annually. 

If you need six or fewer, multiply the number of operatories X 450 square feet for total office space.  If you need more than six, multiply the number of operatories X 400 square feet. 

- If you are building an office from the ground up, calculate the total square footage of land you need by multiplying the number of operatories X 475 square feet X 110% X 6.

Check with the City Building Department to ensure you meet minimum requirements for your particular parcel.

Find an experienced real estate broker. 

A good broker will save you time in determining the best location for your practice.  Your broker should provide a demographic report for the areas you?re interested in and use research to help identify potential locations that are compatible with your career objectives. Ask friends and colleagues for real estate broker referrals and be sure to check references.

Get pre-qualified. 

Talk to your lender to determine whether your project is financially feasible. If you?re building a start-up, you?ll likely need to provide a business plan with cash flow projections, as well as personal tax returns and a credit application. If you have an existing practice and are doing a ground-up project, expect to provide two years of personal and corporate tax returns, a current P&L statement, and a set of drawings for a preliminary project appraisal. An experienced dentist going into a lease space will typically need to show two years of personal and corporate tax returns and a current P&L statement.

Assemble your project team. 

The role of your project team is to help you maximize your project investment. Your team should include:

? A lease negotiator to secure favorable terms and conditions with your landlord.  This individual may also be your attorney and should be engaged before you start any negotiations with your landlord. 

? An architect, interior designer, contractor and equipment vendor who can start working together early in the project to help maximize project efficiencies and ultimately save time.  Be sure your equipment vendor and contractor view your space before you sign a lease to ensure it is compatible with your build-out and equipment plans. 

? An accountant to advise you on how to use current tax laws to your advantage, and set up books and accounts for efficient administration of your project and practice. 

? An attorney to review lease or real estate contracts. 

? An experienced lender who can provide project funds and resources, and protect your investment by structuring a financing program that fits your budget. 

Assemble project costs. 

Once you have completed the steps above, you?re ready to assemble final costs. These should include project estimates from your architect, designer and contractor, equipment costs, supply allowance, working capital, moving expenses, signage, telephone, and furnishings. Have your accountant review all costs before submitting to your lender for a final loan commitment. With the loan commitment, you are ready to start your project!

Managing a project as comprehensive as a dental practice expansion or start-up is a significant undertaking. But with thoughtful planning and a capable project team, you will soon be headed towards successful completion of your project and a beautiful new office for your practice. 

Gavin Shea
Gavin Shea is the Senior Director of Sales and Marketing at Wells Fargo Practice Finance. Gavin has over 17 years of financial experience helping practitioners start, grow, and transitions their practices through a diverse array of financial products and services.

All practice financing is subject to credit approval. Business Refinance Program is for business term debt only. Revolving credit and existing Wells Fargo Practice Finance debt are not eligible for consolidation.

The articles and materials on the Wells Fargo Practice Finance Web site are provided for general information only and do not constitute, nor are they intended as, a substitute for consultation with accounting, tax, legal or other professional advisors. Wells Fargo makes no representation regarding the articles available in the Strategies for Success Library or the completeness or accuracy of the information contained therein. The articles and the information contained therein may be incomplete, may contain errors or may have become out of date. Wells Fargo makes no commitment, and disclaims any duty, to update any of the articles or materials in the Strategies for Success Library. The views expressed in the articles are those of the authors alone. They may or may not reflect the views or opinions of Wells Fargo.

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