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Guidelines for Developing Dental Business Plans

The Components of a Dental Business Plan
Business Plan

If you’re looking to create a business plan for your dental practice, you can follow the same general guidelines that any other small business would follow. For example, your plan should include a detailed description of the product or service, an assessment of the competition, pricing and payments policies, growth strategy, marketing plans, form of business and more.

On the financial side, it needs to contain a summary of the businesses financial position, including prior capital contributions; current debt, lenders and terms; financial comparison with similar businesses and a risk analysis, to name a few.

Below is a detailed outline for the main components of a business plan that you can use as the building block for your own. You may also download a checklist version of the business plan and print it for your personal use.

Introduction and Statement of Business Concept

  • General statement of purpose and objectives
  • Historical background
  • Date of organization
  • Present legal structure (solo, partnership, corporation)
  • Major changes in business purpose, objectives, or strategies
  • Brief description of the market
  • Brief description of product(s)/service(s)

External Environment and Industry Analysis

  • Size and nature of the market
  • Description of total market
  • Industry trends
  • Target market
  • Competition
    • Factors influencing demand
  • Income of target population
  • Seasonal and cyclical influences
  • Price and customer sensitivity to price change
  • Influence of advertising
  • Customer profile
  • Relationship with other professional practices
    • Laws pertaining to the practice of dentistry
    • Competition
    • Nature of direct competition
    • Indirect competition
    • Nature of competitive practices (price, quality, advertising, services, other competitive forces)
    • Number and size of practices
    • Location of practices in relationship to the proposed
  • Nature of cooperative influences (other dental offices which offer encouragement)

Product(s)/Service(s) Offered and to be Offered

  • Detailed description of the product(s)/service(s)
  • Assessment of the competitive advantages and disadvantages
    • Technological position
      • Services offered
      • Location
      • Cost and pricing policy
      • Payment policy

Growth Strategy

  • Approach to entry in proposed market area
  • Approach to growth and maintenance of market share
  • Five year revenue forecast

Marketing

  • Geographical coverage of market area
  • Marketing plan
    • Internal marketing plan
    • External marketing plan
  • Estimate costs

Operations

  • Location
  • Required facilities
  • Required equipment
  • Inventory and inventory controls
  • Organization and personnel
  • Type, expertise, and availability of personnel
  • Compensation

Management

  • Form of business
  • Ownership breakdown
  • Organizational chart
  • Resumes of key personnel
  • Staffing plan
  • Facilities plan/planned capital improvements
  • Operating plan
  • Copies of licenses, certifications, insurance coverage (for all staff, if already chosen)

Financial Analysis

  • Summary of company’s financial position
    • Prior capital contributions
    • Major current stockholders
    • Current debt, lenders and terms
    • Use of prior capital
  • Historical and pro forma (three to five years) income and balance sheets
  • Historical and pro forma (three to five years) cash flow
  • Required investment
  • Return on investment
  • Financial comparison with similar firms
  • Schedule of disbursements
  • Performance mileposts

Risk Analysis

  • Statement of major areas of risk
  • Quantitative risk analysis
    • Break-even point
      • Fixed costs
      • Variable costs
      • Semi-variable costs
    • Payback period
    • Probabilistic forecast
  • Disaster plan

Plan Update

  • How, When and Who
Supporting Materials

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