If you want to start your own practice, a business plan can be an indispensable tool for solidifying support with your lender and sharing your goals with contractors and vendors. A typical plan details the business objectives, management functions, operational features, marketing goals, and financial projections for your proposed practice.

A good business plan is based on sound logic and careful research, and it can take some time to complete. However, the recipe for creating a business plan is standard across industries. Below is a quick overview of the key components of a business plan for any eye doctor’s office, dental practice, veterinary hospital, or other healthcare practice.

  Tip  

Use Business Plan Quick Builder’s interactive tool to help you organize your development and research.

1. Executive summary 

The executive summary serves as an introduction to you and your business venture, and can include the following: 

  • Mission statement. Outline your business philosophy and the principles and values that guide your practice. (For example, “I believe all children deserve the best medical care available.”) Also include the rationale for building your own practice.
  • Practice description. Provide a brief overview of your practice and services, including where your practice will be located, your ideal patient, and any specialty services you offer.
  • Financing requirements. Provide a summary of the capital you will need to get your practice up and running. 

  Tip  

You may want to write the mission statement first but save the description and financing pieces for later, after you complete the financial and marketing sections of your business plan.

2. Practice description 

The practice description section goes into greater detail about the structure of your business, your qualifications for managing the business, and your business resources. This section should illustrate that you have the personal know-how and means to help ensure practice success, including: 

  • Practice history. Provide a description of your professional experience to date, including where you went to school, when you graduated, and any experience you’ve gained through associateships.
  • Management team and key personnel. Identify the principals ultimately responsible for your practice’s financial performance, as well as key team members and their roles. Also list your professional advisors and explain how they can help you grow your business and your business structure, including its legal and insurance components and risk mitigation.

3. Market research 

The market research section demonstrates that your practice is based on a solid grasp of the local market. It can include: 

  • Prospective customer. Describe your ideal patient, including needs.
  • Market description. Describe who lives in your practice community (with respect to your target customer) and what sort of growth is predicted for this area over the next 10 years.
  • Competitive analysis. Define how many other doctors with your specialty are practicing in the area and the range of services they provide.
  • Competitive advantage. Define any benefit or advantage that your practice will offer that local competitors do not. 

4. Marketing plan 

The marketing plan describes the internal and external marketing activities you plan to use to attract patients and grow your practice. For example: 

  • Brand image. Articulate the specifics of who you are, what you do, and who you serve. Consider aspects of market research that show how you are set apart from the competition. Also include a logo, your color palette, and any other details you may have.
  • Marketing strategies. Describe specific ways you will create awareness and keep your patients coming back.
  • Marketing budget. Include the total amount allocated for marketing for the next year. Break this into smaller segments to show how much you will spend in various areas, including print, promotions, referrals, email, website, social media, TV, and other channels. You may want to talk to a marketing professional who specializes in your field. 

  Tip  

Research the recommended spend on marketing, based on your specialty. For newer dental practices, it’s recommended to spend about 20% of annual revenue on marketing, but in one survey, 7% of dentists said they spend nothing at all on this.

5. Operations 

The operations section details the day-to-day functions and requirements of your practice, and can include the following: 

  • Location and premises. Include why you chose your location, the number of operatories you will have, and whether you will own or lease the space.
  • Hours of operation. Describe what the work week looks like for every employee and associate.
  • Staffing. Include recruitment plans, staff roles, compensation, and personnel policies. Identify the resources you are using to create job descriptions.
  • Equipment and supplies. Describe the equipment required now and in the future, and who your major suppliers will be. 

  Tip  

This can be a good time to start thinking about creating a manual of standard operating procedures and office policies. Read about why these are helpful and what they include.

6. Business continuity plan 

COVID-19 has proven that practice owners need a solid back-up plan if forced to close unexpectedly. Business continuity planning (BCP) involves creating a system of prevention and recovery from potential threats, as well as policies for how to maintain operations as much as possible. The plan ensures that personnel and the assets of your practice are protected, that staffers will be paid, and that you will be able to pivot quickly in the event of a disaster or other event. It also can help mitigate risk and protect against liabilities. At minimum, you’ll want to include: 

  • Communication plan. Describe how your staff will manage the communication with your patients/clients and one another in the event the practice is forced to close.
  • Cash reserves. Explain how much you have in cash reserves and/or if you have a line of credit for your business operations to keep things going in a downturn.

  Tip  

Work with an insurance company specializing in your field and discuss what is needed both in the event of a disaster as well as in other areas of practice.

7. Financial forecast 

The financial forecast is probably the most difficult section to complete, as well as the most important. Look at these key areas: 

  • Income and cash flow. Report projections for the first 12 months of practice operation.
  • Capital and operating expenses. This refers to the total funds needed to build and operate your practice. Be specific and include categories, such as contractor costs, loan payments, staff salaries, rent, utilities, lab fees, supplies, and even seemingly minor expenses.
  • Startup costs. Detail your projected expenditures and how much you need in financing to build and launch your practice. Make note of the terms you are looking for (duration, interest rate, monthly payment, etc.). Also include any personal assets you will be contributing to the project.

  Tip  

The financing package you receive from your lender may be based on the numbers in your forecast. To be as accurate as possible, you may want to enlist the help of financial experts who have worked with practice owners in your specialty.

A final note: Consult with your advisors to ensure your business plan is realistic, and set an annual date to review and refresh your plan. Building a business plan today may help you build a bright and successful career, and updating it regularly can help keep you growing. 

Source: Dental Practice Marketing and Management Blog, Dentaltown, Wells Fargo Small Business