For many people, starting a dental practice can be intimidating. With so much to consider and the high cost of starting a business, it may seem like you’re about to make an impossible leap into the unknown. However, when done correctly, starting your own dental practice can be one of the most rewarding decisions you make in your life.
In this blog post, I will cover everything you need to know for starting a dental practice from financing options for a new dental office. You’ll also find some helpful tips on how to start small and grow over time.
Do Your Homework
Before starting your own dental practice, you need to understand the costs. From equipment needed for starting a business to marketing and advertising expenses; you must be prepared financially before making any commitments.
Establishing good credit is also critical when looking at financing options for new dentistry offices. A history of on-time payments will show potential lenders that you are dependable and reliable with money which can make securing loans much easier.
Build a Team of Trusted Advisors
Building a team of industry-specific advisors is necessary to help you understand what needs to be done for your new dental office. This includes help with legal and regulatory requirements, running a business plan, cash management strategies, and more. Developing this team will save you from having to learn everything on your own which can take time away from starting up the practice.
Your dental advisor team should include a specialized Certified Public Accountant (CPA), dental equipment specialist, dental-specific building contractors, and a lender. You can also include a practice management consultant and a dental-focused attorney in your team of dental advisors. Your dental advisor team will help you to determine how much money you need and where it should come from.
Securing Your Finances
The best way to finance your new business is through a third-party lender. This type of loan provider, such as capital for dentists, can be very helpful in developing the financing plan that meets both your needs and the bank’s requirements. The key thing about third-party lenders is they will lend up to 100% of your desired financial goal without requiring collateral as many banks do.
Third-party lenders are better than banks as they are more flexible and will offer you a loan with better rates. They can also take over your existing debt if that is the best way to finance your business start-up costs, or they may help consolidate those debts into one monthly payment by refinancing them.
They don’t have stringent requirements about credit scores like banks do so this makes it easier for anyone looking to establish themselves in business as an independent dental practitioner.
Get Several Types of Insurance
It’s important to get various insurances to secure your assets, property, and the well-being of your employees. A standard package to consider includes dental malpractice insurance, general liability coverage, and errors & omissions protection.
Consider the following insurances for your business:
- Dental malpractice insurance covers you if a client files a suit against you for professional negligence.
- Business loan protection insurance covers your business in the event of bankruptcy or insolvency.
- Employees’ Compensation helps you protect your staff members in the event of an accident.
- General liability coverage covers you if a client is injured on your property.
- Errors & omissions protection is an umbrella policy that provides coverage if errors are made during treatment (whether it’s performed on-site or off) as well as mistakes made during any other work done in connection with the treatment of clients such as marketing campaigns.
Insurance can be a good investment for your future as it will protect you financially if the unthinkable occurs in your business. You’ll also need professional and product liability insurance which is necessary because dentists may prescribe or recommend medications that are not FDA-approved like certain painkillers or antibiotics so there’s always an opportunity for a lawsuit related to those prescriptions.
Create a Business Plan
Developing a business plan is a necessary step for starting your dental practice. A strong, thorough business plan will include projections of what you expect from each year for revenue and expenses to keep on track with your budget. It should also detail how you are going to reach all your projected goals such as increasing patient volume.
The format for this type of financial projection can vary depending on the needs that suit best for you and your team which may include budgets based on different growth scenarios or a simple cash flow statement that includes more information about where money will come in and go out than just projecting revenues and expenses alone.
Creating a Marketing Plan
Once you have your financial plan in place, it’s time to think about marketing. You’ll want a strategic marketing plan that aligns with the goals of your business and includes measurable results.
The most important thing is to create an actionable strategy based on what type of dental practice you’re starting: new or established? Your budget will also shape this aspect of starting up as well as give you insight into how much other things like advertising can cost down the road if needed.
Stay on Your Budget
Before you start spending money on different marketing methods, figure out your parameters. If you’re starting up a new dental practice and are working with an already established budget, then there’s not much to worry about because of the other constraints that come into play when opening a business.
If this is your first time starting a dental office or if it’s been a while since you’ve had one before – learn how to stay within your budget by avoiding extravagant expenses like buying expensive equipment for example unless it can be proven necessary to meet certain goals related to quality service delivery.