By Joshua Botello
Many medical professionals start out careers learning and practicing with an already established office. These dentists were specifically trained in making notes and reading charts but not how to start or maintain those systems for building the practice.
Let’s face it, setting up a professional medical company like a dental practice is hard. Many dentists don’t know anything about the business of their practice when first starting out. They have spent several years and have acquired a particular set of skills, not necessarily conducive to running a business. In this article we’ll cover the 5 aspects of starting a dental practice from scratch and the particular considerations you need to have as a dentist opening up your own practice.
Business Concept
Providing medical advice or services is fairly straightforward. You have education and skills you have earned over the last decade of schooling(in many instances). This also changes if you have a specialty. That’s our first consideration.
What service are you providing? General dental services or specialty services? Who is primarily going to utilize these services? Specialties are great but inherently not going to apply to many of the population and may require you to partner with other dentists to refer clients to you. Understanding this will play into your marketing later but you need to know who and how many of your customers will be available to keep your business open.
Costs and Revenue
Ok, now we are getting into the nuts and bolts of running a business. The magic formula for any business is: Revenue - Costs = Profit. For your business to run and grow you need to operate at a profit. Let’s be honest, you didn’t become a dentist to not make a decent living. Managing the costs and revenue to have positive profit will be vital to keeping your practice open. So let’s take a look at some costs you need to take into consideration:
Building Rent, Lease or Mortgage payments
Equipment purchases, supplies and replacement costs
Utilities (electricity, water, internet)
Patient records management (service, server or supplies)
Scheduling programs
Accounting, tax and payroll processing
Staffing and assistants
Business insurance and corporation renewal taxes
Marketing and advertising
Just to name a few.
The other side of the coin is revenue. How much do you intend to charge for these services? You will likely be regulated by insurance and other regulatory bodies, so keep that in mind when determining those charges. What insurances will you be willing to take? Depending on your specialty and target market, patients will only be able to afford certain services based on those types of insurance or carriers and the rest is out of pocket. Will you make it easy for your customers to pay using credit and multiple forms of payment or is it cash and insurance only?
Forming Your Business
If you intend to start your own practice or even if you decide to take one over, you need to be protected legally. As a professional in the State of California this means you may only be able to operate a Professional Medical Corporation. Generally speaking there are few steps to starting your professional medical corporation to operate in California:
File articles of incorporation for the Professional Medical Corporation
Notify the California Dental Board of the Professional Medical Corporation
Build the corporation: file bylaws (if needed), pick a board and hold meeting minutes.
Take care of taxes: File EIN, set up EDD, pay corp tax fees and set up local business licenses.
You may also be able to elect S-corp status for your corporation with a 2553 from the IRS. Consult a licensed lawyer and accountant if you need help electing or filing your corporation.
Recordkeeping
There are two kinds of recordkeeping you need to keep in mind with a dental practice. Patient records and financial records. Patient records will be the contact information, services provided, insurance carriers and appointment records. These will be invaluable for providing the highest level of care and minimize liability if a problem arises.
The biggest question you need to ask yourself is how you intend to store and manage these records. As I mentioned before, there is going to be a cost associated with this through either: a service that manages records (online portal), a private server (if you want to manage digital records on site) or supplies (if you like to go oldschool and use paper).
The other is going to be financial recordkeeping. Again, you can do this yourself through billing and invoicing programs like Quickbooks or industry specific ones. The second component is payroll. If you plan to have at least one employee you need to know how you intend to pay them and who will be in charge of paychecks and taxes. You can have one person do this internally (possibly you) or have a system of timekeeping that is processed by a service. Again, costs will be a determining factor in all these decisions but don't skimp on accuracy for saving a few bucks, it will come back to bite you later.
Marketing
This is one of the hardest aspects of the business for professionals to understand and implement. This is because many professionals like dentists have a hard time articulating the benefits of their practice beyond the benefits of dental treatment in general. As a business owner you need to provide a unique selling point or in other words, why should customers come to you instead of the next dentist down the street. Determining that USP will help you put together a message that will attract customers.
The next thing you need to understand is how customers find you? Generally, medical and dental providers are found by word of mouth. That’s great, but unless these people are shouting your name from the rooftops, they aren’t bringing in much new business in the way of volume. Investing in a commercial or produced testimonials that are readily available online get more traction on social media and websites.
Finally, you will need to know how to promote your business. With many dentists, most of their clientele are local. So, you have to use some local marketing by mail or online with a Google My Business listing. The benefit of the GMB is when customers search for a provider, they can find business information, reviews and even content provided by the dental practice. This can be found regardless if the business has a website. Providers also have the option of advertising digitally through social media or google and get a fairly good ROI. Again, the effectiveness of your campaign will be largely dependent on your USP messaging and how much you are willing to invest.
Conclusion
Opening a dental practice is difficult but is an endeavor that can pay dividends throughout the business owners’ career. The biggest factor will be how well the dental professional understands the business as laid out in this article. While there are many more specific factors when starting a dental practice, you can always reach out to your local SBDC like ours here at the University of La Verne to plan your business. Do you have other aspects starting a dental practice you want to be answered? Did I miss anything or do you have any tips of your own? Let me know down in the comments.
Comments
Post a Comment