by Drs. Matt & Ann Bynum
Once you have developed your business plan and presented it to a financial institution, it is time to set the wheels of progress in motion. Several integral players are involved in this game of dental business - from those in building construction, to real estate, to finances, and the surrounding dental market. You already may have contacted some of these people, but their further involvement is imminent. Let's take a look at each one's function in helping you realize your dream.
Dental supply representative - The first person to contact is your dental supply representative or branch office. These individuals possess insight not only into the surrounding areas of growth and demand for dental services, but also into the dental profession itself.
While discussing your plans with these people, keep in mind that their financial future is dependent upon your success. If your business doesn't thrive, theirs doesn't either! Sure, they make money from the initial setup, but the real money comes from your monthly purchase of materials and supplies. After all, your career probably will span the course of some 20-odd years.
Because dental supply reps know which areas are saturated with dentists and which aren't, they can help you choose a location for your practice. Ask them to drive you around and show you their recommended areas for location. Evaluate the surroundings for yourself, and ask plenty of questions!
Dental supply representatives will become an integral part of your entire building and equipping process, as well as your daily operations - from floor-plan design and layout using CAD/CAM technology, to equipment recommendations and purchasing, to staffing your office. Long-term relationships are built on the premise of friendship. As our representative, Tom Cromer, would agree, we are so much more than business clients; we are family.
Real estate agent/broker - Unless you dabble in real estate in your spare time, you need help from somebody with real estate purchasing experience. Just the initial documentation and haggling are enough to warrant outside help. Besides, real estate agents can offer something that dental people cannot: They can give you the statistics and demographics outside of dentistry that may impact the success of your practice. They can provide traffic counts, as well as housing and business statistics. Ask questions about the expected growth of surrounding areas, as well as the economic climate of other bedroom communities.
Building contractor - This is probably one of the most important people in the entire process of practice setup. The contractor is the one who will lead the troops! Your physical structure and its ever-important cost lie in the hands of your contractor. Whether you are building from the ground up or renovating an existing space, choose this person wisely.
Seek out contractors who have built medical or dental facilities before. It's not that a reputable builder cannot build a quality dental office; it's just that there are many complex design and plumbing issues to deal with in a dental office that other structures do not have. When interviewing builders, ask to see a few of their recently built structures. Then, when touring those facilities, ask the people who work there if the structure is to their liking. Find out if the builder's response time to problems is timely.
Your contractor - while in charge of estimating the final cost of your building or remodel - can, in fact, save you some money. An independent architect can run anywhere from 10 to 30 percent of the total cost of the building, but a contractor possibly can have architectural plans drawn up in-house. Many builders have employees who are licensed in design and architecture. Their cost may be drastically less than that of an independent architect. This is an avenue definitely worth considering. Having said that, there are specialized groups that design only dental offices. This may be an option if a specific design is what you are seeking. Certain builders have more influence with subcontractors than others. The result is a decrease in overall cost.
Attorney - The decisions you are making will have major legal ramifications, so excellent legal counsel is a must. While having an attorney to get you out of the starting gate may not seem necessary, it's actually crucial. Whether you are purchasing land, a building, or an office space, or even leasing a building or space, you need an attorney - usually one with a background in real estate law - to complete the closings.
For other legal matters, a separate attorney may be better suited, preferably one who is well-versed in dental language for arrangements such as contracts for purchase agreements, associate buy-in agreements, loan agreements, and covenants-not-to-compete. As confusing as many of these documents can be, a good attorney who can explain the details to you in laymen's terms is priceless.
Legal counsel may not be something you consider a necessity; however, you are about to embark on a business venture that, more than likely, will place you in a prominent position in your community. Given the litigious society we live in today, it is imperative that you have someone you can call for assistance when needed. An attorney will assuredly come in handy one day and may potentially save you quite a bit of money.
Certified public accountant (CPA) - We cannot stress enough the importance of having a personal relationship with your CPA. Of all the players we sought for our team, finding an excellent CPA who keeps our best interests in mind was by far the most difficult. Unfortunately, we went through our first two years with three different accountants, finding our fourth and final one at the beginning of year three. Life has been much less complicated since then. Knowing what we know now - five years into our practice - we would have done things much differently when filling this position.
Make sure you take time to interview the accountants you are considering first. Remember, this is the person who can either make your life easy and organized or miserable and stressful. Start by asking these questions: How many other dental clients do they have? How long have they been practicing? How long have they been with their current firm? Can they refer you to current clients for their feedback? Will you have one bookkeeper assigned to your practice? Will you have your books monitored monthly or quarterly? (We recommend monthly to keep a better handle on the pulse of your new practice.) Will their fees be based on the amount of time they spend on your business, or will they be based on your production? Will you be charged extra for phone calls or meetings? Can they access your computer system to gather necessary data, or will you have to provide hard copies to them every month? Do they have email and Internet access? And, most importantly, will they be readily available by phone or email?
We dentists went to school to learn the fine art of dentistry, not business. We would venture to guess that a majority of dentists never gave a thought to the fact that dentistry is a business. Not only did we not learn about general business matters, we also are not educated about the treacherous tax codes, laws, and vocabulary that accompany our business.
One misconception we had about the dentist/accountant relationship was that it had to be a local one. The second misconception was that if a CPA is skilled in small-business accounting, then he or she will know about dentistry as a business. Both of these statements are untrue! Our current CPA not only lives in a different city, but has only dentists as clients. A knowledgeable accountant should be able to service you and your practice from any city or state, so do not let this become a limiting factor when choosing one. Getting you strategically prepared for April 15 each year requires a CPA competent in interpreting tax codes and able to innovatively perform your tax planning. Who better suited than a CPA who caters just to dentists?
Our CPA, Rob Coleman, of Coleman, Ureda and Associates - (800) 680-4171; email@example.com - has always overprepared us for what Uncle Sam may have in store each year. This helps us to avoid any surprises when tax time rolls around. Another excellent firm is Willeford & Associates, CPA, PC - (770) 552-8500; firstname.lastname@example.org. They also limit the scope of their clients to dentists only.
The only thing worse than choosing the wrong CPA is keeping him or her on your team. When you feel you are not receiving the hands-on treatment you need (and you will need hands-on treatment starting out), professionally retire that CPA's services and search for a player who will be the right fit for you and your practice.
Insurance agent - Although insurance, in general, can be a muddy sea of terminology about premiums, limits, and benefits, breaking it down and prioritizing it can be beneficial. Let's consider two statements: The golden goose lays the golden eggs. A Without the golden goose, there are no golden eggs. In this scenario, you are the golden goose and your practice, your home, your car, and your health are your golden eggs.
So, let's start with protecting the golden goose, the doctor. The two best ways to accomplish this are with disability insurance and life insurance. These will help stabilize your life and keep your eggs in place. Once these two critical types of insurance have been addressed, then it is time to look at coverage to protect these valuable eggs. Your business needs to be covered with professional liability and malpractice insurance, worker's compensation insurance, building and contents insurance, and employee dishonesty insurance. Some 40 percent of dentists experience embezzlement in their practices yearly. And, unfortunately, someone is going to feel that loss of money. Why not someone besides you?
Next comes personal coverage - health, auto, homeowner's, and long-term care insurance. According to Richard Erlenbaugh, agency field consultant with State Farm Insurance, "Although long-term care insurance is a somewhat newer product on the market, new dentists need to consider it now while they still are, hopefully, healthy and rates are more affordable."
How do you sort out all of these different types of coverage? Your relationship with your insurance agent must be built on trust ... and the company he or she represents needs to be financially stable. The best way to be certain of this is to check the various insurance-rating agencies, such as A.M. Best and Standard & Poor's. Assure that your insurance company has a high rating so that your financial assets will be protected.
We hope this article has shed some light on the key players necessary to get you out of the locker room and onto the field.
Coming up…Next month, we will focus on how to get patients in the door on Day One, using marketing strategies and systems that you can implement for full effectiveness. Stay tuned.