offered by their accountant. A CPA can help you determine the length of loan that best suits your particular needs. A CPA can also help you decide how much new dental equipment would be wise for you to initially invest in, based on current tax laws and your unique tax situation.
Attorney
Some dentists begin looking for an attorney only when things go badly. When opening a new dental office, though, there are several instances in which using an attorney can be of great value. You can call your local bar association for a list of attorneys who have experience with the specific service that you’re interested in, and ask colleagues about the attorneys they have used for similar matters.
An attorney can:
Negotiate agreements with landlords or sellers, suppliers, and with team members such as your architect and contractor
Analyze any alternative to the A.I.A. bond that a contractor may recommend
Negotiate or review loan documents
Review any other contracts pertaining to your practice
Practice Management Advisor
Hiring a practice management advisor is optional for a dentist opening a new dental office.
Services that may be of benefit to busy dentists include:
Interviewing and hiring new office employees
Completing paperwork for third-party contract services
Training staff
Creating a personnel manual
Developing office policies
Marketing your new practice
The key to any dental marketing strategy is to reach out to your preferred patient niche while maintaining a high degree of professionalism. For a potential patient to take notice, you will need to be creative. A great source of information to help you reach your preferred patient niche and select the most effective medium of advertising is available through a professionally-analyzed demographics report. Many practice management advisors charge a small fortune doing little more than direct mailings or discount coupons in magazines. A creative marketing message offered through the most effective medium available will help set you apart from the “junk mail” dental postcards lying in the recipient’s mailboxes.
A qualified attorney should also be consulted for certain of these services, such as your personnel manual, training programs, and marketing.
Summary
Building a new dental office is a challenging and expensive project, one that requires a tremendous amount of planning, coordination, and supervision. Understanding the vital role of each vendor, and anticipating and controlling the inherent pitfalls associated with new dental office development will help you complete your project on time and on budget.
Contributor Biography
Gordon F. Osterhaus, Jr., D.D.S., opened an office in Glendale, Arizona, starting from scratch, and practiced general dentistry as a sole proprietor for 20 years. He subsequently gained extensive experience in dental equipment sales, which inspired a career in new dental office project management. To date, Gordon has overseen the development of 80 new offices. He is founder and past president of Valley Dental Consulting Services, Inc., founder of GFO Publishing, LLC, and has recently attained Lifetime Member status from the American Dental Association. Gordon’s new book titled How to Open a New Dental Office or Relocate Your Current One: A Journey Through the Dark Side of Dentistry is available online at: www.valleydentalconsulting.com.
Cited Resources/Recommended Readings
Academy of Dental C.P.A.sc/o Schiff and Associates, L.L.C. Allen M. Schiff, C.A.P., C.F.E. 100 West Road, Suite #410 Baltimore MD 21204 Phone: 410.321.7707 Email: [email protected] Website: www.adcpa.org
American Institute of Architects (A.I.A.)1735 New York Ave., NWWashington, DC 20006-5292Phone: 800-AIA-3837 or (202) 626-7300Email: [email protected]Website: www.aia.org
Osterhaus, Gordon F., Jr., How to Open a New Dental Office or Relocate Your Current One: A Journey Through the Dark Side of Dentistry. Phoenix: GFO Publishing, 2011.
This chapter is a brief summary of a topic covered in Gordon’s new book, How to Open a New Dental Office or Relocate Your Current One: A Journey Through the Dark Side of Dentistry. A more in-depth analysis of this topic, as well as a comprehensive overview of the entire process of new dental office development, can be found in his book.
Chapter 2:
Financial Planning
Chapter 2:
Financial Planning
By Wells Fargo Practice Finance
LEARNING OBJECTIVES
Manage your financial profile to help qualify for preferred loan amounts, rates and terms
Understand the financial implications of a practice construction, expansion or remodel project and how to calculate whether your practice can absorb your project costs
Compare financing options and understand the differences between conventional practice financing, Small Business Administration loans, and specialty lender financing
Differentiate types of lenders and the approaches they use to make credit decisions
Identify the tax programs that can help maximize your project investment
Perhaps the most exciting aspect of designing your dental practice is watching your vision come to fruition, with the exact ambience, equipment and technology you prefer. But getting there requires the disciplined work of financial planning — the careful investigation of all financial aspects of your project in order to produce a realistic design plan and budget. Sound dull? It’s not! Because a careful financial planning process is the beginning of making your dream practice a reality. As you put your financial plan together, the question of whether you can afford this kind of project is definitively answered. You learn about the financial implications of a remodel versus rebuild, the types of loans that are available, how to calculate the amount of debt your practice can manage, and much more. And it all starts long before your project manifests a single blueprint — with a strong financial profile that positions you for maximum leverage with your lender.
NOTE: All financing is subject to credit approval, and if applicable, determination of SBA eligibility.
Manage Your Financial Profile
Ask yourself: “How strong is your financial profile? What does your credit history tell a lender?”
Good credit is the key to both your professional and personal financial investments, and your credit score signifies to lenders your overall creditworthiness. In fact, your credit score is critical in determining the amount