new owner wishes to include a spouse’s
income to qualify for lending, the spouse
will likely need to guarantee the debt with
the new owner. sonal and professional budgets and
implementing quality bookkeeping serv-
ices are among the most important deci-
sions for the new practice.
Financing Location – Need or Growth,
Visibility & Accessibility
Once established clinically and otherwise,
the first step toward practice ownership is
to secure financing. When carried out
properly, the dental practice remains one
of the most sought-after small business
loans in the industry. As such, lenders
clamor to lend to dentists. Larger banks
such as Bank of America or Wells Fargo
offer standard loan packages and reason-
able terms while regional banks such as
Sunflower Bank have flexible lending
opportunities with competitive terms.
Selecting a lender should not be about
discovering who can offer an approval;
rather, the banking relationship should be
at the forefront of this choice. Remember,
the start-up loan is the first of many times
the practice will need to secure funding.
An experienced consultant can assist you
in selecting the bank that is likely to be the
best long-term fit for personal and profes-
sional needs.
Cost & Timeline
Most dental practice start-up projects
take six to twelve months from inception
to opening day and cost ranges from
$350,000.00 to $600,000.00+ with the
average new office cost landing around
$500,000.00, exclusive of any real estate
purchase considerations. Cost, of course,
depends on a number of variables, with
the largest contributing factors being
location, practice size and number of
operatories plumbed and equipped.
Legal & Financial Framework
The legal and financial framework of the
dental practice is paramount to its suc-
cess. While it may be tempting to keep
legal and other financial advising costs to
a minimum during the start-up process,
it certainly does not pay in the long run
to do so. The start-up team should
include a qualified and experienced attor-
ney and financial team. Selecting the
appropriate legal entity, designing per-
The ideal location for a new dental prac-
tice includes an underserved or growing
area that is both visible and accessible to
the patient. At maturity, the average den-
tal practice needs 1,400 to 1,700 active
patients to support a full-time dentist. In
order for a new practice to succeed, it
should be located in an underserved area
or, in an area where established dentists
exist, demographics should be evaluated
to ensure that the area’s growth will be
able to support filling a new practice to
the desired number of active patients.
Own or Lease?
Owning and leasing each come with
unique pros and cons. For the well qual-
ified buyer, limited opportunities exist for
a doctor to own with minimal down pay-
ment requirements, but most real estate
purchases require 10-20 percent of the
purchase price in down payment. Most
doctors lease their first practice location
in order to preserve cash for personal and
professional working capital. Engaging a
qualified leasing professional that can
help negotiate favorable lease terms is
critical to the success of the new office.
Contractor Selection, Space
Design & Build Out Budget
For most start-up practices, the most sig-
nificant investment is the finish out for
the new office space. The cost to design
and finish-out a dental space is higher
than most construction projects due to
plumbing and other dental specific
needs. An experienced, quality, dental
specific contractor and architect should
be selected for the project. Remember to
design the interior of the practice with
the future in mind and engage qualified
consultants to help craft a space that will
accommodate the early and established
days of the practice.
Vendor & Equipment Selection
One of the most attractive components of
the start-up practice is the doctor’s oppor-
tunity to select everything for the office
from the computer, the dental chair,
the instrumentation and everything in
between. Working with experienced,
trusted vendors and equipment special-
ists, the doctor should select equipment
and other things with the business and
patient in mind. For example, while pur-
chasing the most expensive dental chair
may be attractive, an equally functional
and comfortable chair may serve the
patient equally while preserving part of
the budget for other needs. Don’t get
caught up buying pricey items that offer
little value to the patient or the business.
Insurance & Business Systems
In an industry that is increasingly com-
petitive, regulated and evolving, the
insurance and business systems of the
dental practice are paramount to its suc-
cess. The startup budget should include
funds to hire experienced consultants
and other professionals who are trained
to prepare fundamental insurance and
business systems. This process should
include evaluating, negotiating and cre-
dentialing insurance plans and fees,
assisting with the practice management
software selection and installation, set-
ting up initial patient schedule prefer-
ences, preparing and integrating fee
schedule and CDT codes, crafting the
recall system, implementing insurance
claim submission and payment systems,
developing collection and billing systems,
and more. Attention should also be given
to HIPAA and OSHA systems.
Marketing
Increasingly, dentists understand the
importance of a strong brand and mar-
keting plan for the new dental practice.
The marketing budget should include
practice name development, brand and
brand collateral creation (logo, business
cards, etc.), website (keep HIPAA & ADA
compliance in mind when building a
website), marketing materials, social
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