Congratulations! You've decided to take the plunge… or
have you? Opening your own private practice can be a very
exciting but also frustrating period, due to all of the time, paperwork,
telephone calls and “blind” decisions that are involved.
Remember, everything you do is a reflection of who you are, so,
start early, stay organized and manage your time efficiently. Your
practice will be an extension of you, your personality and your
philosophies, so be creative, prepared, neat and professional in
all that you do!
1. Choose Your Space and Location
This is your initial vital decision! Your location will either
make or break you. I would recommend getting on board with
a commercial realtor in your area. Consider:
- Demographics – You need to do your homework on your
area. Look for growth, new neighborhoods, schools and
shopping centers.
- Access for your patients – Is it near a major highway or
intersection? Will they be able to find you easily?
- Visibility – Will there be a sign with your name and specialty
on it?
- Parking – Will there be adequate parking for your team
and patients?
2. Establish a Realistic Time Frame
Your design and construction team will understand what is
required to deliver a thoughtful and successful project. Listen to
them! Plan ahead and establish a realistic time frame. Once the items in the pre-design phase are completed, I would plan seven to 10 months for the build-out of leased space and 12 to 20
months for full building construction. Remember: Draft a realistic
timeline for design and construction of your new office! Do
not create additional pressure on yourself by trying to open too
quickly. You can always open early if you get done sooner than
planned. You are in charge!
3. Contact a Dental Supply Company
You need to choose your dental supply company carefully.
Their goal is to establish a long-term working relationship with
you while your goal is to find the best possible match with your
practice. Consider if they will be supplying your dental equipment
as well as your soft supplies, their reputation (talk to other
dentists), their turnaround time for delivery of supplies and
ask if they have a program to assist you in establishing your practice.
Some companies have financial planners, loan assistance, a
CAD-CAM program that will help you with your floor plans,
elevations, etc. Also, ask if they will be available to be on site
during the construction and installation phase.
4. Begin Initial Lease Negotiations
You will need to hire an attorney at this point. It is extremely
important that you have a thorough understanding of your lease
and all written paragraphs. Seek out an attorney who has experience
with medical and dental lease negotiations. Remember that once you sign your lease, you are at the mercy of the landlord
– for the entire period of your fully executed lease! Some items of interest:
- Length of your lease.
- Up-fit allowance (aka “T.I.” or tenant improvements).
- Commencement date and certificate of occupancy. Ensure that you will not be charged rent if the build-out
is not completed by the proposed completion date.
- What is yours? What is theirs? If any alterations or
improvements are made to the office space, understand if
it becomes the property of the landlord. Also, if your cabinets
are built in, you may not be able to take those with
you if you move.
- Fire and casualty damage.
- Insurance.
- Access.
- Sufferance rate.
- Relocation during build-out.
- Lease execution.
- Consumer price index (CPI). Basically this is additional
rent that the landlord can raise you to. Ensure you have a
ceiling of no more than three percent annually and not
less than one percent.
- Common area maintenance (CAM). This is common
space that has to be maintained, like hallways, building
restrooms, parking lots, landscaping, snow removal, etc.
Don’t sign a lease or close on a piece of property without an
evaluation! There’s nothing more disappointing than discovering
that the lease space or property you secured is too small to
accomplish your office design goals – or worse yet, too large and
more money than you needed to spend.
5. Develop Business Plan/Pro-forma
Your business plan is developed to not only eventually guide
you through your endeavors, but to initially assist you in convincing
a bank to provide your financial banking. Remember
that a banking institution may need to be educated on how
profitable a dental practice can be. You have to educate them! A
framework outline is given below:
- Executive summary (mission statement, purpose, the service,
the market, competition, management team, financial
information, conclusion)
- Statement of objectives and qualifications of principals
- Description of services to be offered
- Background of proposed business
- Marketing plan (product, price, place, promotion – both
internal and external)
- Business plan (goals, inventory, practice income, collections,
fees)
- Loan proposal
- Loan itemization schedule
- Origination expenses (architect fees, legal, accounting,
practice announcements, first months rent)
- Dental treatment/administrative expenses
- Office space expenses (up-fit construction, working capital)
- Professional meetings (board review course, board exam, CE)
- Statement of personal net worth
- Income projections for 36 months (profit/loss)
- Appendices (curriculum vitae, references, proposed floor
plan, proposed building lease, tax returns, etc.)
It is highly advisable to have a CPA or practice management
consultant review your business plan with you. After modifications,
they should be present during your interviews with all
financial institutions for clarification and support.
6. Equipment Selection/Soft Supplies
One of your largest expenses will be the cost of your dental
equipment. It is imperative that you estimate as closely as possible
the amount you will be budgeting for dental equipment and supplies. You will need this number when figuring your loan request.
When meeting with your dental supply representative, plan to
spend several hours ordering all of your supplies. Also consider:
- You need to decide if you will be purchasing, renting or
leasing your equipment. Consider depreciation and business
expense.
- Weigh the options of up-fitting all of your operatories
now (possible discount) or later.
- Will your equipment be built-in? If you move, it might be
considered part of your building and you cannot take it
with you (check your lease).
- Coordinate with your architect, millwork, plumbing and
electrical sub-contractors all necessary allocations.
- Consider your water delivery system – I would advise a
self-contained water system, as the “dental water line contamination”
issue is now upon us.
7. Develop Theme Office/Sketches
This is where you can be the designer… and the doctor too! Let
your imagination run free – you have to walk through those doors
every day, so create it the way you want! You want your office to
reflect a very comfortable, secure and up-to-date atmosphere.
8. Line Drawings for Office to Architect
It is vital that you convey to your architect your ideas and
concepts. Be as specific as you can when it comes to details and
images you want to see developed. Put onto paper as many pictures
and ideas as you can. When you meet with your architect,
explain to him what it is you do and the importance of carrying
out your ideas to best represent what it is you are trying to
achieve. Consider a curvilinear design (eliminate as many 90-
degreee angles as possible). What is the best flow pattern for
patients as well as your team? Remember to plan for the future!
It is much more expensive to go back and redo than it is to plan
ahead and be prepared. Most doctors outgrow their dental facility
in less than five years. The culprit: short-term planning! The
investment in a new office is too significant to ignore future
needs. Before starting your project, consider these questions:
- How many operatories do you need today? In the future?
- How many administrative staff are in the business area
today? How many do you anticipate in the future?
- How many doctors and clinical staff are in the facility
today? How many do you anticipate in the future?
- What new technology do you anticipate introducing into
the practice today? In the future?
- How does HIPAA affect how your office will be layed out?
- Where will all of the soft supplies be stored? (This is one of
the biggest problem areas that gets minimized or forgotten.)
I highly advise talking to as many people as possible and getting
their input on your design. Here are a few ideas:
- Colleagues – ask other dentists who are in private practice
to look at your initial plans. Their experience is invaluable!
- Assistants and hygienists – have as many clinical team
members from other offices evaluate your layout and
patient flow. They are the ones who have to do the majority
of the running in the office.
- Front Office Team – the administrative side of the practice
is the most foreign to us as doctors. You must seek
advice from as many front office team members as possible.
They will advise you on what to do and more importantly
what not to do!
- Friends – ask your friends what they like and dislike about
their physician and dentist’s offices and reception rooms.
It is also important to remember that proper zoning ensures
an efficient floor plan. The first key when reviewing the dental
office plan is to verify that the zones of your dental office are not
violated. In other words, spaces that are meant to be together
(within one zone) are together – and spaces that are not meant
to be together are not together. The zones of the typical dental
office are:
Treatment Zone: operatories, tray prep and sterilization,
lab, imaging and X-ray.
Public Zone: reception room, front desk and business
area, consultation area, patient toilet.
Private Zone: doctor’s office and toilet, team lounge and
toilet, storage and dental mechanical area, server room.
An easy way to identify the zone is to color code your floor
plan, with each zone a different color. If a disparate color shows
up inside the same color zone, you have identified a space that is
“out of zone.” This signals inefficiency in your floor plan design.
9. Secure Personal Insurance/Begin Underwriting Process
The bank that will be backing your financial adventure typically
will insist that they are named as the primary beneficiary in
the unlikely event of your death. Therefore, you will need to
secure enough personal insurance to cover your indebtedness.
There are many insurance companies available who deal exclusively
with medical and dental policies. You will need to begin the
underwriting process for the following personal insurance (typically
all of these can be offered by the same insurance person):
- Life insurance – term or whole? Which is best for you at
this stage in your life (based on age, etc.)?
- Disability insurance – monies paid to you monthly if you
become disabled and cannot perform your job.
- Disability overhead insurance (DOI) – monies paid to the
practice to ensure the office can continue to pay monthly
overhead expenses while you are disabled.
10. Initiate Up-fit Bids on Office Space
Your commercial realtor should be able to recommend
highly qualified general contractors to bid on the build-out of
your office. Usually you will want to have three to five contractors
bid against each other on the final cost of your build-out.
This should take no longer than a week. Your commercial realtor
will guide you through this process. Again, this is a vital dollar
estimate that will be needed to help you decide on your final
loan estimate. One word of advice: the lowest bid is not always
the best choice. Visit other projects that each contractor has
completed and interview the owner of each.
11. Financial Backing From Bank/Lender
You will need to interview several financial institutions. As
mentioned previously, your accountant or practice management
consultant should be present during your interviews with all
financial institutions for clarification and support. Points of interest
that you want to challenge the financial institutions with:
- Revolving line of credit – request that you only get
charged interest on the money you use.
- Length of loan – usually this will be five to seven years if
you are up-fitting in an existing building, based on the
amount you borrow. This is the time they expect to have
the loan paid in full.
- Interest rate – this should be discussed in detail and is
negotiable.
- Interest-only payments – request to pay only the interest
on the amount of money you have used from your line of
credit for the first 12 months. This will give you time to
generate an income base when the actual loan payment
comes due.
- No penalty for early repayment – ensure there is no
penalty for paying off your loan early!
- No co-signer – insist that you do not need a co-signer. There
is no need to bring anyone else into the financial equation.
Although most doctors prepare financial projections, many
fail to include all project costs. Be sure to resource a knowledgeable
expert for your financial assumptions. Overall project costs
should include:
- Hard capital costs: construction, land, landscaping, parking,
etc.
- Soft capital costs: professional fees, new furniture, accessories
and dental equipment (soft costs are usually about 25 percent
of the anticipated construction costs of the building).
Consider the following formula:
Cost of function + Cost of aesthetics = Overall construction
costs
12. Attorney to Review Completed Lease
Have your attorney complete final revisions of your negotiated
lease. It is not uncommon for lease negotiations to exchange
hands between your attorney and your landlord multiple times.
At each of these revisions, make sure you understand what was
changed, why it was changed and any implications this might
have in the future. A word of caution: Be very attentive to the
amount of time your attorney spends on revisions. This can
become extremely expensive! Ask him/her for your approval prior
to discussion with any other individual regarding your lease.
Numerous phone calls, meetings, discussion, etc. between your
attorney and another party can add up to a disheartening bill!
13. Secure Office Insurance
It is time to begin the underwriting process for your office
insurance. Umbrella policies (where one company underwrites
multiple policies) are usually more affordable. Shop around, as
there are many companies to choose from. You will need to purchase
the following types of insurance:
- Commercial liability office insurance
- Business personal property insurance
- Personal property of others
- Personal property of premises
- Monies and securities
- Malpractice insurance
- Workers’ compensation
14. Sign Building Lease
Once your lease is finalized, you will need to sign it and obtain
a copy to be kept in a safe. Your space is now officially yours! No
one can out-bid you and “steal” your office out from under you!
Thank your attorney and write him or her a big ‘ole check!
15. Sign Equipment List
Sign your dental equipment and supply list. The equipment
order can now be placed and you can begin to give your dental
supply company some general dates when equipment should be
delivered. Remember that some equipment can take longer to
order, ship and install… so plan ahead!
16. Secure General Contractor
Decide on your general contractor and have an initial meeting
with him to ensure all questions are clarified. Advise him
that you would like to meet with him and any applicable subcontractor
foremen who might have questions regarding a dental
up-fit. Advise him you will be calling him to schedule a
second meeting with all team players (architect, general contractor,
dental equipment manager, etc.) He will have you sign a
contract with him. Obtain a copy of this contract!
17. Set Up Meetings
Set up times to meet with dental supply companies, your
general contractor, all sub-contractors (plumbing, electrical,
millwork, etc.) architect, landlord and your team. Some areas of
interest to discuss are:
- Imaging (radiograph) room must follow state radiation
guidelines.
- X-ray controls must be located a certain distance outside
of the room with a view window (lead glass).
- Special wiring to accommodate pan/ceph and intra-oral
radiograph unit.
- Location of mechanical room (compressor, vacuum system,
phone board, computer exchange board).
- Air lines run to sterilization and lab (hand piece for acrylic
trimming, lab work, etc.).
- Water lines to lab for model trimmer.
- Plumbing, air, vacuum lines to each dental chair (core
drilling through a concrete floor will be required).
- Recessed ultrasonic in sterilization and drainage.
- Any sterilization equipment that will be placed in vented
drawers.
- Special orders for pediatrics (small sinks, urinals, short
toilets, etc).
- Placement of master control switches for vacuum and air
compressor.
Points of interest to remember and discuss between your
team members are:
- Once you feel you have designed the ideal operatory,
“construct” the operatory from cutout cardboard including
the dental chair, operatory and assistant stools, cabinets
and counters. This will give you a chance to try it out
for size and working space. Do not neglect this step if you
are designing an area that is different than what you have
used in the past! Ideally, a closed operatory should be 11
feet x 11 feet if you utilize technology and plan to have
seating for a guest in the room.
- Do not neglect ergonomics in designing your operatories
and administrative areas. I would recommend working
with someone who is knowledgeable on dental operatory
layout, doctor, assistant and patient positioning.
- Make sure you have sufficient electrical outlets strategically
placed.
- Plan which way the cabinet doors in the administrative,
quiet room and treatment area will open. The “standard”
way might not work for the assistant or receptionist. In
some areas, you might not want doors on cabinets. Watch
the swing of the cabinets and measure them to make sure
they will not hit anything. Consider sliding cabinet doors.
- Remember to design signage for bathrooms and other
doors and areas you need to designate.
- Place all light switches in the most convenient locations. Do
a walk-through first before confirming the electrical plan.
- Dental software – make sure all of your video and audio
is networked throughout your office.
18. Architect to Seal and Approve
Plans/Elevations
Almost all states will require that an officially certified architect “seal” your plans (his professional approval). Many dental supply companies offer to draw and design your office on a CAD/CAM machine and can even print out realistic “blueprints,”
but these are not “official” by the state. You will have to
have your architect makes these “official.” Make certain all cabinetry
is drawn as you have requested. If uncertain, have your
architect draw a schedule or detail of it. Once it is in the field, it
is up to your general contractor to interpret, which can be risky!
19. Up-fit Construction
On average, the internal build-out of an office space in an
existing building should take no longer than three to four
months to complete. The dental equipment and chairs can be
installed in less than a week. I cannot stress enough to try and
be onsite with your general contractor as much as possible. I was
there almost every day! So many minor changes can be made in
the field that will save you much headache and expense down
the road. Your contractor will have many questions to ask/confirm,
and it is important for you to be right in the middle of it
all! You know how you want your office to look, so ensure that
every detail is how you want it. You have to walk into this office
every day… make it the way you want it from the beginning!
Common items missed that are costly to fix:
- Door locations and the direction they swing.
- All outlets are in correct location (consider all below
counters with drop grommets, any above counter should
be horizontal and not vertical).
- Location of all light switches and are three-way switches
in the correct location?
- Counter heights: seated counter height, transaction ledge
height, standing counter height, sink height.
.
- Computer monitors mounted on wall and cabling chased
below counter to hard drive.
- Flat screen TV’s reinforced wall mounting with power and
networking cabling behind.
- Outlets for microwaves, dishwashers, refrigerators, crock
pots on an island in the kitchen for buffet service.
- Computer/phone/network close to desk layout in consult
rooms, doctors’ offices, etc.
20. Interview Staff/Secure Office Personnel
It will be up to you to interview and hire your initial team.
I hired my practice administrator first, so that the front was covered
while I was my own dental assistant for the first few
months. This way, someone can answer the phones while you
are producing!
21. Marketing of Practice
Approximately six weeks prior to opening your office you
will want to send a letter introducing yourself and announcing
your practices’ opening to the following groups:
- Local general dentists
- Local dental specialists
- New home/home relocation companies
Referral pads, business cards, letterhead, envelopes and all
office forms should be developed and printed at this time. You
want to be prepared to open your doors and see patients as soon
as possible. Remember that your rent begins the day your certificate
of occupancy (C.O.) is approved!
22. Open Doors and See Your First Patient!
I would advise having your staff in the office two days without
seeing any patients. It will take you that long at minimum
to ensure:
- Department of radiation protection has surveyed your
office and approved it with the state.
- You have walked through with your contractor and made
a punch list of any imperfections you want corrected.
- All forms are ready.
- All dental supplies are inventoried.
- All staff are trained on your dental software.
- You have completed “trial runs” without patients including
printing all patient documents to every printer.
- All equipment is in working order.
- You feel comfortable with your environment.
I am reminded on a daily basis that the decision I made to
open a practice was the right decision for me. Good luck in the
pursuit of your dream!
Author's Bio |
Dr. Robert Elliott is a practicing pediatric dentist in Cary, North Carolina (CaryPediatricDentistry.com). He is the founder of Pedo Springboard, a
consulting business that helps pediatric dentists successfully open and manage their offices nationwide (PedoSpringboard.com). He can be
contacted at The2thFxr@aol.com.
|
|