INTRODUCTION:

In essence a dental practice is like any small business in its management and financial aspects. Whilst clinical aspects are obviously of paramount importance, lack of attention to the business side of the practice can have serious consequences for the practitioner who is not protected from normal commercial considerations merely by the nature of his/her chosen profession. Indeed the increasingly competitive nature of dentistry with its pressures to attract more patients through the projection of a high quality image, has meant that serious attention to running a sound business has become more important than ever.

It is hoped that this section of the manual will cover a number of key points critical to a successful start in your own practice.

LOCATION:

Selecting the right location is an extremely important factor in your first practice project as it will need to offer both good business potential and an environment in which you are happy to work, and perhaps live in.

The following is a list of some of the factors to be considered in selecting a favoured area:

• Personal preference – rural, city, suburban.

• Dentist/patient ratio (local HA can supply information)

• Economic factors in the area.

• Population – static? declining? increasing? young? old?

• Property values – future planned developments (local authority planning department)

PREMISES:

Several different types of property may be available in the area. The opportunity to purchase freehold premises should obviously be taken if possible. From a financial standpoint, combining the practice with your home is often an attractive option in the early years although.

Here are some of the factors to think about:

• Cost (if freehold property)

• Security of tenure if rented or lease-hold.

• Availability of surgery space.

• Parking.

• View or setting.

• Opportunities for expansion.

• Proximity of other services.

• Quality of environment.

• Local transport system.

THE BUSINESS PLAN:

In order that you have a structure to refer to and a measure against which to judge performance, it is essential that a formal business plan – stating your present and future intention – is compiled. This will also be vital if you intend approaching sources from which to raise finance for your project. At this point you should retain the services of a good accounting firm, preferably one with experience of dental and medical practitioners. This will ensure that your business plan, including a first year budget and cash flow forecast, is correctly put together in a businesslike fashion. This business plan should cover the following areas:

• Personal requirements.

• Why you have selected the particular area.

• Physical resources.

• Capital Expenditure requirements.

• First year budget showing expected income/overheads.

• First year cash flow showing monthly movement of money.

• Anticipated future expansion potential.

FINANCE:

Your business plan will assist you in approaching lenders from whom you may wish to borrow funds to assist your plans. There is no shortage of banks, insurance companies and finances houses competing for this business, indeed some finance houses have specialised operations to cater specifically for dentists. It is important that you have the right loan, from the right lender, and here again your accountants should be able to provide impartial advice. Your likely requirements and sources likely to meet them are as follows:

• Property – banks, insurance companies, building societies.

• Renovation/refurbishment costs – as above plus finance houses.

• Equipment – banks, finances houses.

• Working capital (overdraft) – banks.

MANAGEMENT:

Even the best planned operations often fail due to bad management and so in addition to paying close attention to clinical skills and requirements, it is imperative that every care is taken in how you manage your practice, or in other words – your business. You will have responsibilities in the following key areas:

• Clinical management.

• Administrative management

• Financial management.

• Staff management.

In the dental world of the future it is likely that marketing the practice will become increasingly important. Key areas of the marketing function are:

• Planning for growth.

• Motivation planning.

• Creating the dental care team within your practice.

• Image building.

• Postgraduate education.

• Patient communication/information within the practice.