Owning my own practice seemed insurmountable in 2010 when I put together my first business plan. It took me three months to add the lines and numbers into various spreadsheets and when I realized that I didn’t have enough money, time or knowledge about business, I put the well-detailed, colour-coded binder in a storage bin that moved around the city of Toronto with me.
As a dental hygienist of seven years at the time, I wasn’t sure if I could do it. I quickly gave up and went back to my weekly grind. At 27 years old I lived with my parents, worked seven days a week and dreamed that one day I could take back control of my dental hygiene practice. I knew back then that something needed to change in my career; my neck started hurting and there were days I laid in bed, staring at the ceiling, contemplating calling in sick to work for no good reason other than I didn’t want to go.
Fast forward to October 2018. I’m now happily married and purchased our first modest home in Toronto. I dug up the very outdated binder and scheduled a meeting with my husband Chris, an accountant by training, now working for a large financial institution in tax, wealth and estate planning. I was enlisting the assistance of the person whom I’ve trusted my entire life with and now the future of my career. We had a choice to make: renovate our home or open a business.
Over 30 days, we relentlessly created an updated version of my 21-page business plan. The idea of opening my own practice and how it would operate in my mind was a well-thought out and planned business. Putting my thoughts down on paper was much more challenging than I expected.
My business plan wasn’t merely for me but for the institutions I ultimately would approach to seek financing for this venture. With only six per cent of dental hygienists in Canada owning their own practice¹, lending/borrowing would still require some convincing to the banks and private lenders. Ironically, when applying for funding from a bank, an independent dental hygienist is categorized in the same group of applicants as dentists, physicians and chiropractors.
From my research, I realized that there were a few ways dental hygienists were compiling their business plans and outlining the day-to-day activities of their business. Some were purchasing practices with the equipment in place, some were starting from scratch and purchasing gently used equipment, and few were opening from scratch and building a brand-new office. Some generated other streams of revenue from chair rental agreements to other hygienists or room rental agreements to other allied health care professionals. Adjacent to mobile dental hygiene clinics, which were a very interesting concept but didn’t quite fit the model I was looking for, I reached out to multiple colleagues (so if you’re reading this – thank you for your insights). The collaborative efforts will help us grow and sharing your experiences is the greatest gift you could have given me.
We’ve all had a different start, different planning stages and ultimately different business plans related to opening our own practices.
Michelle Worton, RDH from Blooming Smiles Dental Hygiene in Fort St. John, BC, said “I am a mother to two incredible young humans and they are my everything. Having a schedule that fit the needs of my family, with a mother that could take the TIME when needed. It injected me into my practice. A practice where my patients feel valued, where they are an extension of a Blooming Smiles family. A culture. A practice where we laugh, we cry, WE bloom.” Beautifully spoken words by a fellow #Perioslayer with a thriving practice, which has recently expanded.
Jennifer Michelle Grzebien, RDH of Eternal Smiles Dental Hygiene Studio, said “I started out as a mobile practice in 2015 and have been working on growing and tweaking my practice ever since. I am not where I want to be yet but am slowly getting there one day at a time. I still have plans and I don’t think you are ever 100 per cent perfect from the start. Your practice is like an ever evolving being and it grows and changes as you grow, seeing what works and doesn’t, what feels right and what doesn’t quite sit well with you.”
I had a vision in mind: a state-of-the-art facility with brand new equipment, space for educational events and a place I could amalgamate all of the aspects of my career in one location, all while providing a high-level of dental services to patient/clients I had grown over the years. Trying to find words to describe how social media, product reviews and dental hygiene services all fit into a practice was an odd thing to relay to the bank. Selling that concept to an institution would be an even greater challenge and I hadn’t heard of anyone doing that just yet.
My executive summary was the first statement in my business plan. It’s like a 60 second elevator pitch to a financial institution stating what I do, what I’m looking to build and how much I’m asking to borrow.
“An opportunity exists for an ambitious and experienced registered dental hygienists in Ontario to create their own thriving, successful independent practices. Irene Iancu is motivated to open a practice in her own neighbourhood to serve her devoted patient following and provide quality hygiene and education services in a modern setting. We are seeking a financing partner for the purchase of equipment and leasehold improvements for this independent dental hygiene practice, Toothlife Studios Inc., to be opened in East Toronto.
Estimated financing required is $250,000.”
This was followed by the opening balance sheet detailing working capital, inventory needs, equipment estimates, leasehold improvements and legal costs.
Subsequently, a section titled “The Opportunity”, which was basically an educational 302-word section educating the financial institution about Independent Dental Hygiene practice. Using statements related to the “Who, What, Where, When, Why and How” dental hygienists are opening up clinics and operating. Still to this day, it is a very new concept to much of the world, despite us having the authority to do this for nearly a decade.
The first person at the bank I spoke to was a huge disappointment. Chris and I went into this meeting together after prepping for three days to ensure I knew every word and item line so that we could defend my numbers. Despite sending her this document weeks prior, she didn’t read it, kept questioning my legal ability to open a practice, and then confusingly called me doctor multiple times. If this happens to you, please do not be discouraged.
Eventually, we met with a great banker who got it. Not only did he read the overtly detailed document but he Googled me and pulled off some impressive facts that I was shocked he even knew. Not a pitch for the professional department at RBC by any means, but if you’re looking for someone I’ve had success with, that’s where I went.
Understanding Your Gross Billings
In my final months of private practice, I really started to pay attention to my gross billings daily and the comparisons to the same month, one-year prior to estimated growth percentages.
This information would be very helpful not only for my business plan but for my operation of the practice. The reality was that I was working in an established practice operated by a dentist, which was different than a start-up clinic; however, I didn’t want to deviate from those metrics much.
I wanted to adopt the “if you build it they will come” mentality but I knew that some efforts would be required to build up my patient base. What I didn’t want to do was discount my work and instead devote the capital to marketing and events. I documented my earnings and gross billings to better understand what the growth potential was for my practice, which was a direct comparison to the work I was already doing in a different practice setting.
If you’re looking to open your own practice, start looking at numbers for an entire calendar year, if not more. As we know in dentistry, there are high and low times for billings. Had I only used the metrics from July to November, my business plan projections would have been specific to this time of year and likely calculation errors would have presented when my plan was forwarded to the analysts who was involved in plan approvals. It’s essential to create your business plan, plug in your numbers, and over a year or two, keep defending those numbers in your plan. If it doesn’t make sense to you then the bank will tear that plan apart.
Accounting/Legal/Corporate Structure Considerations
There are a few ways to identify the business structure for a practice, which depends on a few variables. Is there a partnership involved? What’s your personal income tax situation and where are you planning on operating? These questions, along with dozens more, were proposed to me when I met with my accountant and lawyer, who both specialize in dental practice corporate structures. No two individuals and practices are alike so I can’t stress enough the importance of working with someone who has successfully set up these structures, specifically for dental professionals. With new practice builds, we knew that HST would be something we would like to recover, which is one of the largest that contributed to my corporate structure.
Cost for a specialty accountant/lawyer = $250-$400 per hour in the city of Toronto.
Location, Location, Location!
Commercial real estate is also very different than residential. I opted to work with a commercial agent who only deals with the listings related to businesses. She was instrumental in my negotiation of my space, assisted me in navigating tough conversations with my landlord, and ultimately through her experience and negotiation was able to secure me with four months of free rent, while fixturing tens of thousands of dollars of leasehold improvements.
The lease agreements are very detailed and having them looked at by a lawyer is very important. My lawyer had closed dozens of dental deals. Yes, his fees were higher than most would expect but his experience was worth the capital. Signing a 10-year lease is a really big deal that shouldn’t be taken lightly and it’s interesting that commercial tenants have fewer rights than residential tenants – so be prepared for those documents. They can be brutal!
What’s my greatest weakness? Control. I need it all. I can’t give any of it away and I have struggled with this my entire life (I’m working on it). I was faced with this reality early on and had a really challenging time getting out the words, “I can’t do this alone”. Despite my only child “I don’t need anyone” mentality, I knew that I needed a team.
It’s funny how expectations and reality often don’t align. I had this vision that my father (a civil engineer and an architect) would design my office and together like the good old days flipping houses together, we would enlist the assistance of family and friends in putting up drywall and doing plumbing and electrical work. In the past, we’ve all hammered a nail in a wall but when it comes to building a practice, I’ve learned it’s best to leave it to the professionals.
I interviewed three contractors for the job, all very well-known in the industry and all solely work on and build dental practices. Discount construction can serve to be helpful in some cases but in my situation, I was in a time constraint. With only four months of free rent, I knew that I needed someone who would be efficient. By hiring Tripar, the company who is building the space, I not only was given a contractor but also an expert in the dental field. Dave and Lee were instrumental in the selection of equipment, communication with the landlord, and they both involve me every step of the way. I highly recommend using a company that has a proven track record for successful office buildouts. Yes, they too come at a higher price point per square foot but they definitely make up for it in efficiency, time management and project management. Dave and Lee, along with my suppliers at Patterson, have been in direct communication together to move the project along smoothly and efficiently, which is worth the extra injection.
The stress is real, the tears are real, but the moments of accomplishment are the best part. Followed by the little celebrations. I’m sharing this story with you all in real time for those of you that may be considering practice ownership. I’ve been told building a practice is a lot like having a child. In the moment, you remember every painful thing but as time passes, you forget about the struggles and can focus on the good. I can’t defend or deny that, I don’t have children or a practice yet. But I can see how that might be true.
To close out the first article in this series, I leave you with a statement that my tennis coach used to say to me:
“Lots to think about, nothing to worry about, focus on your game and take it point by point. Hold on to the the advantage for as long as you can.”
About the Author
Irene Iancu, BSc, RDH, CDTP has worked in various specialties including Paedo, Perio, General Practice and Orthodontics. Her goal in her current holistic practice is preventing and maintaining an optimal mind, mouth and body. Irene connects the systemic effects of oral conditions to her clients, while making a change for overall health and wellness. As a Peer and Quality Assurance Mentor contacted by the CDHO, a Clinical and Theoretical Dental Hygiene instructor at Oxford College, and a practicing dental hygienist in Toronto, Irene shares her passion for education with us today in the hopes we can change the lives of our clients and their loved ones. Irene can be contacted at Irene@toothlifestudios.ca, www.toothlifestudio.ca, IG: @ToothLife.Irene, @Toothlife, @Toothordare.podcast.