Budget Musts by Dr. Kha Nguyen

Budget Musts 

Smart budgeting strategies every dentist should know before starting a practice


by Dr. Kha Nguyen


I was one year into practicing dentistry as an associate when I decided it was time to open my own practice. I started talking to multiple local practice transition brokers and scouring the Colorado Dental Association classifieds for an office to purchase. The problem was, whenever I found an office I could see myself working at, a DSO would swoop in and snatch it up for a much higher price than I could offer. As for the ones I could readily buy, the equipment and spaces themselves were so outdated I would have needed to invest at least another $100,000 to $200,000 to renovate and update the equipment.

That’s when my wife, who is also a dentist, and I decided that instead of trying to fit into someone else’s office, we would build our own dream practice from scratch—one where we could create our own layout, interior design, operating systems and specialized equipment to our liking. Does an office designed to your specifications sound attractive? Then a dental startup might be right for you, too.

I’ve had many friends and colleagues ask me for advice on the startup process and how we were able to break even our second month of opening. Although there’s a lot I could cover, I’ll keep it simple and share a few suggestions on how to budget smartly when you open a dental startup to set yourself up for success down the road.

1. Hire a dental coach
I can’t stress enough how important this was to our success. Unless you are a seasoned business owner and have experience opening businesses and/or other dental offices, I highly recommend you find a dental coach who can advise you throughout the entire dental startup process. Dr. Henry Ernst on Dental Practice Heroes Podcast made a great analogy: If you wanted to be good at a sport, you would hire a coach to teach you how to improve your skills, show you what you’re doing wrong and help you become the best. In the same way, if you are starting a dental practice and have no idea what you’re doing, wouldn’t you want someone to show you the ropes? After all, this is your livelihood, and failure would impact your life a heck of a lot more than losing your high school tennis competition.

Fortunately, when we went to Breakaway Seminars in 2022, we got connected with an amazing coach, Emily Lingo, who had experience helping hundreds of dental startups across the nation. From tenant improvement negotiations to IT build-out advice to providing Excel sheet templates for budgets and bank loan approvals, there wasn’t anything she couldn’t answer via email or text. I remember an instance where our sign company charged us an extra $5,000 because they had difficulty installing the sign. Emily was able to share her experience to guide us. In total, we saved at least $200,000 from hiring a dental coach, which added to our working capital for a healthy safety net when we finally opened.

2. Join a buying group
If you’ve ever worked at a DSO, you have probably heard the term “formulary.” Is that dental cement on the formulary? If it is, then you can order it because it’s at a much cheaper price than the other brands. If not, then you can’t order it because it’s not in the formulary. DSOs work with vendors to choose which supplies to buy in bulk so they can get a discount for those specific items. As a small business owner, you don’t usually get that luxury. Buying groups change that.

How does it work? Basically, you sign up and pay a monthly fee (i.e. $99/month) and get a discount on items available to all members of the group. Think of it as multiple small business owners coming together to buy in bulk, with everything managed by a third-party company. We previously had a membership with Dental Whale, but have transitioned to Synergy Dental. All the buying groups are pretty similar, and no matter which one you go with, your savings will be worth the minimal monthly fee. You can easily save hundreds, if not thousands, of dollars a month by joining a buying group.

3. Use a local equipment rep to buy and install your equipment
We’ve all heard it; all the big dental distributors are expensive and you can find better deals elsewhere. Although I think there is some truth to this, I also think when it comes to opening a startup, using one of them is a good move.

We partnered with Henry Schein for our equipment purchases. Although we could’ve gone with a cheaper brand chair or autoclave, the reassurance of a big company backing up the warranty and installing all the equipment was unmatched. Mike Stanislawski, our equipment representative, was there during every progress construction walk-through to ensure the space was large enough and optimized to fit our dental chairs, CBCT, sterilizers and anything else we could think of. And because we bought new from them and leveraged their Platinum Thrive Rewards, installation was included. Also, if we had issues with any of the equipment, parts and labor was included for 18 months. The peace of mind that gave us was great, but what was even better was the reassurance everything would fit perfectly in our space design and we could start seeing patients right away. While it’s difficult to determine how much we actually saved, I can see it preventing tens of thousands of dollars in costs. For example, realizing an operatory was too small to fit the chair we wanted would have meant modifying the walls in the space, a costly and time-consuming endeavor.

4. Choose the right architect and general contractor
Take the time to find an architect and a general contractor who have worked with one another and are dental-specific. Ask other startup doctors in your area about their build-out experience to find which team has the best reputation. It makes for a much smoother process, and you’ll be able to finish on time (or with minimal delays).

Teams that aren’t dental-specific may not be familiar with dental codes, which could lead to revisions that delay your process. One of my colleagues who did not use an architect had issues with equipment fitting into the operatories because they were too small. Spend the money to get it done right the first time (buy once, cry once), as change orders take time that could be spent seeing patients, costing you money in the long run.

We used a local dental-specific architect that included interior design services (Paul Battista) and a local dental-specific general contractor, Mountain States Construction Company. We spent about $215 per square foot for our construction and were given an estimated timeline of 12 weeks to finish the project. We ultimately finished in 14 weeks. I highly recommend them to anyone in the Colorado area. Even two years after the build-out, their supervisors follow up to see how we are doing and have been to our office to touch up issues such as paint, electrical lighting and plumbing concerns. You really get what you pay for. The total cost would be in the tens of thousands, if not hundreds of thousands, had we been delayed months and had to start paying our rent without any income. A bad contractor could have easily bankrupted us if issues had kept us from opening.

5. Don’t build all of your operatories at once (but get them plumbed during construction)
Operatories are expensive, and if you don’t use them to their maximum capacity, you’re wasting money. During the Breakaway Seminar we attended, Dr. Scott Leune asked, in terms of number of operatories, “When are you the most profitable and when are you least profitable?” The answer? You are the most profitable when you are fully booked and using all your ops and the least profitable when you just built out your additional ops. I would much rather have three full, busy operatories than five operatories that are used some days of the week and are there “just in case we need them.” That money could be used toward other equipment, such as a CBCT unit or an iTero, that can help produce additional income.

For us, each additional op cost about $50,000 to equip because in addition to chair and stools, we had to buy handpieces, cassettes, computers, TVs, instruments, x-ray sensors, etc., to make each operatory work to its full potential. We started out with three operatories between two doctors and built out two additional operatories at our one-year mark. Our decision to wait on equipping all seven of our potential ops saved us $200,000 from the start.

6. Market yourself
Let’s be honest: It’s difficult to find a good dental marketing company that aligns with your vision and creates a good return on investment. Marketing is a long game, but you really want to see results now because you’re spending a lot of limited working capital on it. We tried multiple companies before we found our marketing soul mate, Pain-Free Dental Marketing.

Whether you currently have a good marketing team or haven’t found the one yet, I encourage you to do some marketing yourself via social media. The best part? It’s free. All it takes is some time and motivation to get behind a camera. When patients see your human side and that you’re not a scary dentist who only wants their money and to hurt them, they are more likely to schedule an appointment with you.

My wife, Dr. Lynn Doan, and her sister, Lyly Doan, were the masterminds behind our social media presence, helping bring in more than 60 new patients a month right from the start. Admittedly, this is rare in the dental world, but if we can do it, you can do it. We started our social media journey before our construction began by recording the whole process, including a short, fun video of us signing our lease and popping a bottle of champagne to celebrate. Documenting the entire process lets your patients feel connected to where they get their teeth cleaned. Our decision helped save us more than $5,000 a month as we did not use any paid ads our first year.

There are other topics I could discuss, but like I tell my patients, I prefer not to overwhelm you on your first visit. I only have two final pieces of advice: one, choose your business partner wisely (it is basically a business marriage, after all), ensuring your dental and business philosophies are similar, and two, attend a startup seminar. These two things will help you in the long run.

If you have any questions or want clarification, you can reach me at khadentist@gmail.com. I’m happy to help as much as I can. Best of luck on your journey—it’s challenging but extremely rewarding. 


Author Bio
Alan Rencher Dr. Kha Nguyen earned both his Bachelor of Science in biology and his Doctor of Dental Surgery degree from the University of Missouri-Kansas City. He and his wife, Dr. Lynn Doan, founded The Dental Bar in Aurora, Colorado, a speakeasy-inspired practice with faux cocktails featured in the January 2024 issue of Dentaltown. Outside dentistry, Nguyen enjoys golf, gaming and playing acoustic guitar, often jamming out to popular hits with his wife.

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