Practice Development Charles J. Arcoria, DDS, MBA Demographics Location Leasing/Purchasing Options...
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Transcript of Practice Development Charles J. Arcoria, DDS, MBA Demographics Location Leasing/Purchasing Options...
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Practice Development Charles J. Arcoria, DDS, MBA
Demographics
Location
Leasing/Purchasing Options
Financing
Selection of Equipment/Supplies
Fee Schedules
Utilization of Dental Consultants
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Background Information
FACT = Most dental practices struggle financially because the practitioner does not FULLY understand the concepts of
marketing and promotional activities.
GOAL = Obtain optimum business by ANTICIPATING, then meeting the needs of the patient.
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Demographics
Financial/economic
Population
Trends
Competition
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U.S. Census BureauFact Finder
http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml
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The Policy Map
http://www.policymap.com/LandingPages/competitors.html?gclid=CMjj-9CjlKwCFUXu7QodgmwFmw
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City-Data.com
http://www.city-data.com/
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Demographics – Consumer Flow
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Demographics Now
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Scott McDonald
http://www.dentaldemographics.com/reports_marketing_demographic.asp
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ADA Workforce Data
http://www.ada.org/1622.aspx
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Perceived Competition
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DemographicsControllable Marketing Variables
>Price and costs
>Service
>People
>Place or location
Uncontrollable Marketing Variables
>Social & cultural
>Government & legal
>Technology
>Economic conditions
>Competition
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Location
>What type of practice do you want?
>How much can you physically produce?
>Find reliable information & sources
>How much income is enough?
>Focus on wealth and/or income?
>Where do you really want to live?
>Set goals - financial, personal, professional
>Continually study economic trends
>Initially keep costs low - budget
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Location – Study Economic trends
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Site SelectionLocation
Urban vs. Suburban vs. Rural
Office Building vs. Professional Building vs. Retail Center
Commercial Real Estate Brokers Negotiate lease for you
Will slightly increase your rental rate
Can get you into spaces that you do not have access to
Are aware of new projects/developments before the public is
Referral Base Important for Specialists; Know which General Dentists
currently refer to existing specialty practices
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Leasing/Purchasing Options
Tax advantages of leasing vs. building>Entire lease payment is written off each month
>Buildings are treated as real estate – financed over a long period of time (usually 20 years)
>Buildings have a small payment per month, but the tax write-off is spread out over the 20 year loan.
>Advantage regarding Building = No landlord
>Disadvantage regarding Building = Neighborhoods change over time
>Advantage regarding Leasing = Can move to better location quickly
>Leasing is more popular in Urban locations
Leasing vs. Building
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Leasing/Purchasing OptionsSite selection/space/leasing/improvements
>Design plans vs. Construction plans>Design Plans are not acceptable by most City Inspection Departments
>Construction Plans have the complete Engineering Specifications on the blueprints
>Construction CostsThese usually average around $70 per square feet
Landlords want to approve the construction bid
>Leasehold improvement allowance>Landlord will provide either cash or free rent, after the construction is finished
>Subjective location analysis>Use your gut feelings about a generic location
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Types of Financing
1. Conventional bank loan
2. SBA loan
3. Lease or signature loan
4. Unconventional financing
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Financing
1. “Bricks & Mortar” set-up
2. May have a healthcare division
3. Simple interest loans with fixed terms
4. Will finance less than 100% of need
5. Significant paperwork to fill out
Conventional Bank Loan
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Financing
1. Backed by U.S. Treasury – good for the bank that you are filing with
2. Usually has a healthcare division
3. Simple interest loans with fixed terms
4. Will finance up to 95% of need
5. Much paperwork to fill out
SBA Loan
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Financing
1. Finance Company – not a real bank
2. Responsible to their shareholders
3. Use lease financing terms that do not calculate simple interest
4. Will finance up to 100% of need
5. Little paperwork to fill out
Lease or Signature loan
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Unsecured Loan
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Financing
1. From a relative or a friend
2. Must pass IRS criteria – cannot be a “no” interest loan
3. Interest rates are usually slightly less than SBA loans
4. Must pay back all of loan, or it is classified as a gift – taxable issues
Unconventional Financing
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Financing Costs – Spreadsheet Analysis
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Financing Costs – Expense Items
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Financing Costs – Loan Proceeds
LOAN PROCEEDS Working capital $45,000 Dental equipment & computer software $95,000 Leasehold improvements $75,000 Sign, external fixtures $3,000 Furniture $8,000 Dental supplies $12,000 Security deposit, attorney, consultants $7,000 Office supplies $10,000 Landlord allowance - improvements ($5,000)
TOTAL LOAN $250,000
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Selection of Equipment/Supplies
>Use of equipment dealers vs. mail order
>Bids and budgets
>Service after the sale
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Selection of Equipment/Supplies
>Equipment dealers vs. IndependentsComparing Bids ::: Service after the sale ::: Warranties on Equipment
Henry Schein Dental
Southwest Medical & Dental
Buy Dental Equipment.com
Independent Dental.com
Patterson Dental
J&B Dental
Burkhart Dental
Lone Star Dental
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Fee SchedulesObtaining Fee Schedules
1. Call offices in your area
2. Get schedules from insurance companies
3. ADA surveys
4. Purchase schedules
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1. Udell Webb DDS
2. National Dental Advisory Service
3. Atlanta Dental Consultants – Tom Limoli DDS
Purchasing Fee Schedules
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Utilization of Dental Consultants
1. Practice Management: Improve practice finances (mostly revenues)
2. Practice Brokers: Assist with buying and selling practices; appraisals
3. Hands-On Practice Managers: Actually work in a practice to enhance finances or operations
Types of consultants
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Utilization of Dental Consultants
1. By the job – fixed fee
2. By the clock – hourly or daily rate
3. Percentage of revenues or sale
How are consultants paid or hired?
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Utilization of Dental Consultants
1. ADA has directory of Dental Practice Management Consultants
2. National Association of Healthcare Consultants
3. ***Referral from colleague is the most optimum
Experience & Advice
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The End