Tips for Running a Successful Dental Practice
Wonder if you’ve got what it takes to run your own dental practice? We’ve got everything you need to know about the operational side of dental practice ownership in this definitive guide.
Whether you are starting a new dental practice or hoping to grow an existing operation, then this guide will help you to succeed. From discovering what you currently do well through to identifying areas of improvement, there is always more to learn when it comes to running your own dental practice business.
Running a successful dental practice relies on you having a combination of both the necessary skills and qualifications required to be a senior dental practitioner, as well as the business acumen to build your operation from the ground up.
Of course, you can’t be everything at once. You’ll often find success when you take the time to identify your strengths and then surround yourself with people who can provide complementary skills. So, from planning for the future to understanding your finance operations and running a tight ship, keep reading this definitive guide to learning everything you need to know about running a successful dental practice.
Develop a strong business plan
It’s never too late to write a business plan - even if you’re a decade into your practice. Don’t worry if you’re not starting a new practice this year because a business plan will help you to contextualise your operational and financial situation. It’s like breathing a new lease of life into your business’ direction and recontextualising your performance.
From identifying weaknesses to highlighting the need for new finance, a business plan is a fully comprehensive document that guides your operations. Most importantly, a business plan is fluid - it changes as the world does. So, if you haven’t updated your business plan since the COVID-19 pandemic, then it’s time to reassess. Are your goals still the same? Are you able to maintain the same levels of growth or is it time to reel in spending and take stock? Whatever your circumstances, your business plan is key to the success of your practice.
Depending on whether you run a squat practice or an operation with multiple facilities, your business plan will look different. However, to get you started, here are some things to consider when developing your dental practice business plan.
As a business plan is an extensive and detailed document, it’s vital to have a comprehensive executive summary at the beginning. You may need to provide your business plan to lenders or banks, so this section will help them to gain an initial overview of your intentions and where your business is going.
If you struggle to write in a concise manner, then it might be worth speaking to a business consultant to help you create an executive summary that truly summarises your business plan, and highlights why you are a great fit for any partner or lender.
You must include information about the structure of your dental practice in your business plan.
If you run a small practice, such as a squat practice, then you may be the only director. However, you may have management staff in place to ensure the smooth running of the business, for example, a practice manager is often a vital role for any successful dental practice. Remember, your business plan may also include future projections. So, if you intend to appoint another director or senior manager, then this is a goal you will need to include in your plan. By doing this, you will be able to determine at which stage you can start recruiting, and what salary you could afford to pay.
For dental partnerships, your business plan will clearly denote the shareholders, their stakes and their return on investment. Often, people go into business with someone they know well on the premise of trust. However, it’s critical that you create a clear structure that includes shares, salaries, dividends and other financial considerations. All of this can be included in your business plan, so potential investors, lenders and new partners can clearly see how the business is structured and where each partner fits into the practice.
Financial plan and projections
A necessary part of any business plan is the financial plan. If you are new to dental practice ownership, then you might benefit from talking to a financial advisor to determine how best to invest your money. You will most likely need to secure finance to support your business venture, as opening a new dental practice can be an expensive project. As with any new business, investment is often front-loaded as you seek the best property, equipment and team. Until you open your doors to patients, you won’t be in a position to start earning and repaying any finance.
Use this section of your business plan to outline your financial plan. How much are you and your partner(s) investing? And what finance do you need? Remember, we can help to match you with the best finance lenders and get you the right terms to fit with your plans (more on that later.)
You may be the only dentist at your practice, or you might have a team of practitioners delivering services to patients. Whatever your circumstances, you’ll need to recruit a team of support staff. From dental nurses and hygienists to operational staff like receptionists and practice management, even the smallest practices require a recruitment strategy.
Take the time to determine your budget and plans, then identify key roles and responsibilities. From here, you’ll be able to assemble the perfect team to run your practice. And if you’re already in operation? Look to the future and think about what you need to achieve in order to grow your practice, or even open another dental practice under the same umbrella.
There is a lot more to consider when creating your business plan, but these basic foundations will help you to frame your mindset and start thinking about how to run a successful business from the outset.
Secure the right finance
As we already mentioned in the business plan section, you may need business finance. There are many reasons why you might consider finance for your dental practice, including expensive setup costs, support through turbulent economic times or a bolster for that next practice opening… whatever your reason, it’s important to find the right finance and lender to suit your needs.
Your business plan, even if you’re well-established, will still be critical to any lender looking to invest. They’ll want to see that you’re not ‘resting on your laurels’ and have a plan for growth going forward that justifies their investment in you.
When it comes to financing your practice, here are some things to consider to ensure success…
Squat or partnership?
A squat practice is a small dental practice, typically with only one surgery. Most of the time, this is fully owned by the dentist. As with any sort of finance, lenders will take into account your background, skillset and any relevant business experience. It’s about identifying risks. So, if you are the sole dentist at your practice, and you run it with a small but experienced team, then the lender will want to know if you have managed practices before, even if this is your first solo venture. Equally, if you have previous financial problems, such as poor credit score or default payments in your personal life, this may very well work against you when it comes to securing the best finance on good terms.
For that reason, many dentists choose to start partnerships. Legally, a dental partnership must consist of two dental professionals, so you can’t go into business with your practice manager, for example. However, there are some ways around this, so be sure to read our definitive guide to starting a dental practice with a partner to ensure you fully understand where you stand.
Again, there are positives and negatives to working with a partner. The lenders are keen to identify any risks early on, so for the best chances of success, it’s worth coming to Rangewell. We don’t just match you with specialist dental finance lenders, but we guide you through the application process, spot any gaps and help you to present your expertise in the best possible light.
Working with an experienced finance partner like Rangewell could be the difference between success and failure for your dental business. If you are unable to secure the finance you need at the beginning of your venture, then you may fail to exit the starting blocks. Equally, if your existing finance product is no longer relevant or on preferable terms, then refinancing could help take you to the next level.
Refinancing your dental practice
So let’s talk about refinancing your practice. Whether you are looking to switch from your initial finance product, or are ready to transition from a bridge loan to an asset loan, then you should work with Rangewell to determine what the best solution is for you.
There are a number of reasons why you may choose to refinance your dental practice or group. For example, refinancing can help to improve cash flow or consolidate debt. Equally, you may now qualify for finance on better terms. So, refinancing is really a gateway to success for many dental practices.
Given the last few years, many dental practice owners are planning for survival, rather than success. The COVID-19 pandemic has caused many dental practices to go from busy waiting rooms to emergency appointments only. So, refinancing can help to improve cash flow so you can continue to operate your business even when appointments are low.
Understanding your financial situation, and knowing when to refinance, is key to running a successful dental practice. So, be sure to work with Rangewell for both financing and refinancing your business.
The right equipment is critical to the operation of your dental practice. From dental specialist equipment, like dental chairs, x-rays and cabinetry, through to electronic devices like computers, smartphones - and their software - this all requires considerable investment. Without the right equipment and maintenance protocols in place, your dental business will fail to succeed from the outset.
If you are an NHS practice, you will need equipment that is up to their standard. And if you intend to offer specialist private services, like cosmetic dentistry, then you’ll need the state-of-the-art equipment that your patients have come to expect from a high-end service.
When it comes to buying and maintaining equipment, one thing’s for sure: it’s expensive.
Every successful dental practice, even the smallest squat practice, requires the necessary equipment to operate. So, consider this in your finance application and speak to your broker about your requirements and budget.
Budgeting for dental equipment should be a significant part of the finance section of your business plan. When you work with Rangewell, we’ll access lenders across the whole of the lending market, including specialist dental finance lenders, to help you secure the best funding for your equipment and wider operational requirements.
Market your business
For many businesses, marketing is a high priority. However, the healthcare industry is notoriously behind when it comes to embracing the power of marketing, particularly in the digital arena.
Regardless of whether you are opening a brand new practice or looking to improve an existing operation, a strong marketing strategy is key to your success. Marketing is often paired with sales. However, it is its own discipline that requires special attention and a clear, concise strategy from the outset.
From getting to know your local community, identifying advertising opportunities and getting active on social media, marketing is a multi-facet discipline that requires significant time and investment. So, consider outsourcing it to an experienced consultant. After all, you wouldn’t want a marketer working on your teeth!
Marketing can be an expensive process, so may also be worth seeking funding assistance for if you have ambitious plans for growth and can justify it as part of your business plan - which further reinforces the need for a good business plan at any stage of your business.
Dedicated marketing consultants can command high daily fees and the specialist digital software, tools and techniques they utilise will also likely come with a cost. Before working with any marketing agencies or professionals, make sure you research them online to check reviews - it may even be worth analysing their GlassDoor website to see employee stories so you can gauge if the agency will be a personality fit for your brand.
Now we’ve discussed planning and finances, it’s time to look at the operational side of your business. One of the most important tips we can give you to running a successful dental practice is to understand your strengths and weaknesses and delegate the latter. As the owner of a dental practice, you have a lot on your plate. Not only do you oversee the running of your business, but you also must deliver excellent services to your patients.
For that reason, many dental professionals will recruit an experienced practice manager to help run the day-to-day operations of the business. As a practice owner, you will spend your days with patients, so it’s critical to have someone who has oversight of the business side. From managing appointments to monitoring key dates like equipment maintenance and tax deadlines, your practice manager is at the core of everything you do.
In addition to your practice manager and their support team, you’ll also benefit from outsourcing some key areas of your business to industry experts. For example, a good accountant pays for themselves in the time they spend organising your accounts and helping you to identify savings opportunities. Equally, a marketing consultant will help to position your business as the go-to practice in the local area, drawing the attention of the community using a combination of offline and online marketing tactics.
Whatever your plans, you may need an initial cash injection to support your plans. Get in touch with Rangewell to find out what financing options are available to you and how to access the specialist finance providers in your field.