June 1, 2004
by Anita Jupp
Most business plans follow a simple structure:
1. Practice Summary & Mission Statement
The first section of your business plan should detail your practice summary and your mission statement. The practice summary is an overview of your business. What you do, the general services that you offer–the fundamentals of your business. Please keep in mind that the practice summary is just that, a summary. Your mission statement should set out your goal(s) in a clear manner and it should very briefly detail the critical steps you’ll take to reach those goals. For example:
Jamestown Dental Centre’s mission is to become a leader in the provision of cosmetic dentistry and dental implants. Our mission statement is “State of the art dentistry for the new millennium.” In order to achieve this goal, Jamestown Dental Centre will follow these basic principles:
Positive patient relations are the core foundation of our practice.
– We will always educate our patients about available treatments.
– We will be efficient and productive with our business systems.
– We will work as a team to ensure the growth of our practice.
2. Financial policy, dental services & revenue streams
Where is your money coming from? What percentage of gross income comes from the hygiene department’s recall appointments? What percentage of your income comes from aesthetic dentistry? What is your financial policy with patients?
A written financial policy should be a part of your business plan, outlining expectations for the team. A team that has been trained using a formal financial policy produces more consistent results and is more content because it knows what is expected of it.
The Dental Services section should detail the different services you offer. For instance:
– Cosmetic Dentistry
– Applewood Dental Clinic offers a variety of cosmetic dental procedures to patients including:
– Composite & Porcelain Veneers
– Tooth Whitening
– Dental Crowns & Bridges
– Dental Implants
During 2003, tooth whitening and tooth contouring were the most highly accepted forms of cosmetic dentistry in our practice. The revenue generated from cosmetic procedures was approximately 12% of gross revenues or $47,500 during 2003.
3. Market Analysis
An important section of your living business plan, the market analysis should detail a number of areas such as:
Patient overview & target markets
The business plan should include a section about your existing and potential clients–your patients. Who are your patients? What sort of lifestyle do they live? Where are they geographically? What income bracket are they in? Over time, the demographics cited in your business plan may change. What was once a new suburban area with many young families could become an established subdivision with an older median age. Your practice overview should track the number of patients, lost patients, gained patients as well as some general demographics.
Trends in dentistry
Ensure you know what’s going on in dentistry and document your findings. It is important to keep up with dental services and education. Always know what’s going on in your health sector.
An area to document your marketing efforts and plan for the future. The marketing area should detail any campaigns, it should identify your practice brand, it should also detail your internal and external marketing procedures.
Proper business plans always include a competitive analysis. For dentistry, this section would detail items such as the number of other dentists in your area, a procedure comparison, etc.
4. Management Summary
The first section of your summary should contain general information about your practice such as the doctor(s) background and bio. You should also include your staff structure and their job descriptions as well as any intended hiring for the near future.
5. Risks and challenges
What risks and challenges does your practice face? Are you in a heavily competitive area? If so, how does that affect your practice? Are your fees higher than average and is that a challenge you need to overcome? Are you currently billing your patients and at risk for non-payment and bad debt? The real costs are often surprising. Protect your practice by reducing this risk. Offer financial options to your patients that do not put your practice and cash flow at risk, such as third-party patient financing (at 0% interest to your patients!).
Every practice plan should contain financials. You may wish to just include the standard end of year statements from your accountant or you can go further by including projections for the future. I recommend including projections for the future as another way of measuring growth and setting goals. Give yourself something positive to work toward but always keep your financial projections realistic.
Why keep the practice plan updated?
Writing a detailed practice plan probably seems like a lengthy task and you’re right–it is. However, it’s a task that need only be done once and then updated on a yearly or six month basis; whenever you regularly review your practice growth.
Writing and updating your practice plan on a regular basis will provide you with many benefits. Over a 10-year period, the changes you go through will probably be significant. Your practice plan will provide you with a detailed analysis of profitable changes and perhaps changes that did not work out as well as planned. If you have a living document in your office detailing everything about your practice, you’ll have the information at hand should you desire to sell your practice, hire an associate or perhaps seek a bank loan. The practice plan is also of great benefit for goal setting. It allows you to see where you’ve already been and where you might go in the future.
Anita Jupp is President of Anita Jupp & Company Dental Practice Management Worldwide. She is the recipient of a Fellowship Award, presented by the International Academy of Dental-Facial Esthetics for her outstanding contribution to business management in the international dental community.