Buying a Dental Practice? Here’s How to Write a Business Plan
So, you've decided to purchase a dental practice? Congratulations! This is an exciting venture that can be very rewarding. However, it's important to remember that buying a dental practice is not like buying any other business - there are unique considerations that must be taken into account.
Your business plan is the document that will outline your goals for the practice, how you intend to achieve those goals, and what financial investment will be required. It should also include a market analysis to ensure there is a demand for the services you intend to provide.
Creating a business plan can seem like a daunting task, but it doesn't have to be!
In this blog post, we will discuss how to write a business plan when buying a dental practice, and the key areas you need to consider such as finance and investment. Let's get started!
1. Start with an executive summary
This is a brief overview of your business plan that should include a snapshot of all the essential information that lenders require before deciding on whether or not to lend to you. As an introduction to your business plan this pivotal document needs to outline what services you will be providing, what funding is required, and a plan for repaying the loan. It’s important to remember that this summary should be persuasive and convince the reader that your dental practice is a good investment.
2. Create the core section of your business plan
This section will include more detailed information about the dental practice you are intending to purchase, such as the location, size, number of employees, and any unique selling points. It's also important to provide an overview of your team and their experience in the industry. You should include a description of the services you offer, your target market, and your marketing strategy, as well as an analysis of your competition and how you intend to stand out from them.
• Strengths: What will be your company’s strengths when you launch? How do you see this changing in the future?
• Weaknesses: If you were the competition, what would you say to prospective customers about where your company’s services are weak or deficient? What are the most important weaknesses to overcome first?
• Opportunities: With product improvements or new partnerships, where could your business grow? What new segments could you enter in the future?
• Threats: What external factors could put pressure on your business growth or cash flow? Which of these threats can you control? Which ones can’t you control?
3. Don't forget the financials
All businesses need a solid financial plan, and dental practices are no different. The final part of your business plan should include a financial forecast for the first three years of operation. Banks and private investors will want to be confident that the business they are lending to will be profitable. Make sure to include relevant research and data to support your financial forecast. Be sure to consult with a qualified accountant to ensure that your financials are accurate and realistic.
4. Maintaining the business's success
It is important to be able to demonstrate to lenders that you can maintain the success of the business, by thinking about how it is ran now and the working environment. Describe your skills and experience, why you would be good for running this business? Will you be bringing in new ways of working? The lenders need to feel comfortable with your plans for the future of the business, they need to understand how much time you can contribute to the working clinically and how this supports the handover of the business from the previous owner.
These are just a few tips to get you started writing your dental practice business plan. Remember, this document is vital to the success of your dental practice, so take the time to do it right! Buying a dental practice is a big decision, but with a well-thought-out business plan, it should be a smooth and successful process.
If you are a dental associate looking to purchase your first dental practice, or an experienced dental practice owner looking to expand your portfolio, the team at MediEstates can help. We have a wealth of experience in the dental industry and can provide you with the advice and support you need to make your dream a reality. Contact us today to learn more!