practice management feature Hanging Your Single Shingle · to 10 months for the build-out of leased space and 12 to 20 months for full building construction. Remember: Draft a real-istic

Hanging Hanging Your Single Shingle – Are You Ready?

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practice managementfeature

Congratulations! You’ve decided to take the plunge… orhave you? Opening your own private practice can be a veryexciting but also frustrating period, due to all of the time, paper-work, telephone calls and “blind” decisions that are involved.Remember, everything you do is a reflection of who you are, so,start early, stay organized and manage your time efficiently. Yourpractice will be an extension of you, your personality and yourphilosophies, so be creative, prepared, neat and professional inall that you do!

1. Choose Your Space and Location

This is your initial vital decision! Your location will eithermake or break you. I would recommend getting on board witha commercial realtor in your area. Consider:

• Demographics – You need to do your homework on yourarea. Look for growth, new neighborhoods, schools andshopping centers.

• Access for your patients – Is it near a major highway orintersection? Will they be able to find you easily?

• Visibility – Will there be a sign with your name and spe-cialty on it?

• Parking – Will there be adequate parking for your teamand patients?

2. Establish a Realistic Time Frame

Your design and construction team will understand what isrequired to deliver a thoughtful and successful project. Listen tothem! Plan ahead and establish a realistic time frame. Once the

by Robert Elliott, DMD, MS

There is a lot more to opening a practice than just moving in

your boxes. Elliott talks about big stuff like real estate and

leases, and the small stuff like making sure your printers

work before you open up for patients.

continued on page 34

NEW GRADS » dentaltown.com34


items in the pre-design phase are completed, I would plan sevento 10 months for the build-out of leased space and 12 to 20months for full building construction. Remember: Draft a real-istic timeline for design and construction of your new office! Donot create additional pressure on yourself by trying to open tooquickly. You can always open early if you get done sooner thanplanned. You are in charge!

3. Contact a Dental Supply Company

You need to choose your dental supply company carefully.Their goal is to establish a long-term working relationship withyou while your goal is to find the best possible match with yourpractice. Consider if they will be supplying your dental equip-ment as well as your soft supplies, their reputation (talk to otherdentists), their turnaround time for delivery of supplies and ask if they have a program to assist you in establishing your prac-tice. Some companies have financial planners, loan assistance, aCAD-CAM program that will help you with your floor plans,elevations, etc. Also, ask if they will be available to be on siteduring the construction and installation phase.

4. Begin Initial Lease Negotiations

You will need to hire an attorney at this point. It is extremelyimportant that you have a thorough understanding of your leaseand all written paragraphs. Seek out an attorney who has expe-rience with medical and dental lease negotiations. Rememberthat once you sign your lease, you are at the mercy of the land-lord – for the entire period of your fully executed lease! Someitems of interest:

• Length of your lease.• Up-fit allowance (aka “T.I.” or tenant improvements).• Commencement date and certificate of occupancy.

Ensure that you will not be charged rent if the build-outis not completed by the proposed completion date.

• What is yours? What is theirs? If any alterations orimprovements are made to the office space, understand ifit becomes the property of the landlord. Also, if your cab-inets are built in, you may not be able to take those withyou if you move.

• Fire and casualty damage.• Insurance.• Access.• Sufferance rate. • Relocation during build-out.• Lease execution.• Consumer price index (CPI). Basically this is additional

rent that the landlord can raise you to. Ensure you have aceiling of no more than three percent annually and notless than one percent.

• Common area maintenance (CAM). This is commonspace that has to be maintained, like hallways, buildingrestrooms, parking lots, landscaping, snow removal, etc.

Don’t sign a lease or close on a piece of property without anevaluation! There’s nothing more disappointing than discover-ing that the lease space or property you secured is too small toaccomplish your office design goals – or worse yet, too large andmore money than you needed to spend.

5. Develop Business Plan/Pro-forma

Your business plan is developed to not only eventually guideyou through your endeavors, but to initially assist you in con-vincing a bank to provide your financial banking. Rememberthat a banking institution may need to be educated on howprofitable a dental practice can be. You have to educate them! Aframework outline is given below:

• Executive summary (mission statement, purpose, the serv-ice, the market, competition, management team, financialinformation, conclusion)

• Statement of objectives and qualifications of principals• Description of services to be offered• Background of proposed business• Marketing plan (product, price, place, promotion – both

internal and external)• Business plan (goals, inventory, practice income, collec-

tions, fees)• Loan proposal• Loan itemization schedule• Origination expenses (architect fees, legal, accounting,

practice announcements, first months rent)• Dental treatment/administrative expenses• Office space expenses (up-fit construction, working capital)• Professional meetings (board review course, board exam, CE)• Statement of personal net worth• Income projections for 36 months (profit/loss)• Appendices (curriculum vitae, references, proposed floor

plan, proposed building lease, tax returns, etc.)It is highly advisable to have a CPA or practice management

consultant review your business plan with you. After modifica-tions, they should be present during your interviews with allfinancial institutions for clarification and support.

6. Equipment Selection/Soft Supplies

One of your largest expenses will be the cost of your dentalequipment. It is imperative that you estimate as closely as possiblethe amount you will be budgeting for dental equipment and sup-

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plies. You will need this number when figuring your loan request.When meeting with your dental supply representative, plan tospend several hours ordering all of your supplies. Also consider:

• You need to decide if you will be purchasing, renting orleasing your equipment. Consider depreciation and busi-ness expense.

• Weigh the options of up-fitting all of your operatoriesnow (possible discount) or later.

• Will your equipment be built-in? If you move, it might beconsidered part of your building and you cannot take itwith you (check your lease).

• Coordinate with your architect, millwork, plumbing andelectrical sub-contractors all necessary allocations.

• Consider your water delivery system – I would advise aself-contained water system, as the “dental water line con-tamination” issue is now upon us.

7. Develop Theme Office/Sketches

This is where you can be the designer… and the doctor too! Letyour imagination run free – you have to walk through those doorsevery day, so create it the way you want! You want your office toreflect a very comfortable, secure and up-to-date atmosphere.

8. Line Drawings for Office to Architect

It is vital that you convey to your architect your ideas andconcepts. Be as specific as you can when it comes to details andimages you want to see developed. Put onto paper as many pic-tures and ideas as you can. When you meet with your architect,explain to him what it is you do and the importance of carryingout your ideas to best represent what it is you are trying toachieve. Consider a curvilinear design (eliminate as many 90-degreee angles as possible). What is the best flow pattern forpatients as well as your team? Remember to plan for the future!It is much more expensive to go back and redo than it is to planahead and be prepared. Most doctors outgrow their dental facil-ity in less than five years. The culprit: short-term planning! Theinvestment in a new office is too significant to ignore futureneeds. Before starting your project, consider these questions:

• How many operatories do you need today? In the future?• How many administrative staff are in the business area

today? How many do you anticipate in the future?• How many doctors and clinical staff are in the facility

today? How many do you anticipate in the future?

• What new technology do you anticipate introducing intothe practice today? In the future?

• How does HIPAA affect how your office will be layed out?• Where will all of the soft supplies be stored? (This is one of

the biggest problem areas that gets minimized or forgotten.) I highly advise talking to as many people as possible and get-

ting their input on your design. Here are a few ideas:• Colleagues – ask other dentists who are in private practice

to look at your initial plans. Their experience is invaluable!• Assistants and hygienists – have as many clinical team

members from other offices evaluate your layout andpatient flow. They are the ones who have to do the major-ity of the running in the office.

• Front Office Team – the administrative side of the prac-tice is the most foreign to us as doctors. You must seekadvice from as many front office team members as possi-ble. They will advise you on what to do and more impor-tantly what not to do!

• Friends – ask your friends what they like and dislike abouttheir physician and dentist’s offices and reception rooms.

It is also important to remember that proper zoning ensuresan efficient floor plan. The first key when reviewing the dentaloffice plan is to verify that the zones of your dental office are notviolated. In other words, spaces that are meant to be together(within one zone) are together – and spaces that are not meantto be together are not together. The zones of the typical dentaloffice are:

• Treatment Zone: operatories, tray prep and sterilization,lab, imaging and X-ray.

• Public Zone: reception room, front desk and businessarea, consultation area, patient toilet.

• Private Zone: doctor’s office and toilet, team lounge andtoilet, storage and dental mechanical area, server room.

An easy way to identify the zone is to color code your floorplan, with each zone a different color. If a disparate color showsup inside the same color zone, you have identified a space that is“out of zone.” This signals inefficiency in your floor plan design.


9. Secure Personal Insurance/

Begin Underwriting Process

The bank that will be backing your financial adventure typi-cally will insist that they are named as the primary beneficiary inthe unlikely event of your death. Therefore, you will need tosecure enough personal insurance to cover your indebtedness.There are many insurance companies available who deal exclu-sively with medical and dental policies. You will need to begin theunderwriting process for the following personal insurance (typi-cally all of these can be offered by the same insurance person):

• Life insurance – term or whole? Which is best for you atthis stage in your life (based on age, etc.)?

• Disability insurance – monies paid to you monthly if youbecome disabled and cannot perform your job.

• Disability overhead insurance (DOI) – monies paid to thepractice to ensure the office can continue to pay monthlyoverhead expenses while you are disabled.

10. Initiate Up-fit Bids on Office Space

Your commercial realtor should be able to recommendhighly qualified general contractors to bid on the build-out ofyour office. Usually you will want to have three to five contrac-tors bid against each other on the final cost of your build-out.This should take no longer than a week. Your commercial real-tor will guide you through this process. Again, this is a vital dol-lar estimate that will be needed to help you decide on your finalloan estimate. One word of advice: the lowest bid is not alwaysthe best choice. Visit other projects that each contractor hascompleted and interview the owner of each.

11. Financial Backing From Bank/Lender

You will need to interview several financial institutions. Asmentioned previously, your accountant or practice managementconsultant should be present during your interviews with allfinancial institutions for clarification and support. Points of inter-est that you want to challenge the financial institutions with:

• Revolving line of credit – request that you only getcharged interest on the money you use.

• Length of loan – usually this will be five to seven years ifyou are up-fitting in an existing building, based on theamount you borrow. This is the time they expect to havethe loan paid in full.

• Interest rate – this should be discussed in detail and isnegotiable.

• Interest-only payments – request to pay only the intereston the amount of money you have used from your line of

credit for the first 12 months. This will give you time togenerate an income base when the actual loan paymentcomes due.

• No penalty for early repayment – ensure there is nopenalty for paying off your loan early!

• No co-signer – insist that you do not need a co-signer. Thereis no need to bring anyone else into the financial equation.

Although most doctors prepare financial projections, manyfail to include all project costs. Be sure to resource a knowledge-able expert for your financial assumptions. Overall project costsshould include:

• Hard capital costs: construction, land, landscaping, park-ing, etc.

• Soft capital costs: professional fees, new furniture, accessoriesand dental equipment (soft costs are usually about 25 per-cent of the anticipated construction costs of the building).

Consider the following formula:Cost of function + Cost of aesthetics = Overall construc-

tion costs

12. Attorney to Review Completed Lease

Have your attorney complete final revisions of your negoti-ated lease. It is not uncommon for lease negotiations to exchangehands between your attorney and your landlord multiple times.At each of these revisions, make sure you understand what waschanged, why it was changed and any implications this mighthave in the future. A word of caution: Be very attentive to theamount of time your attorney spends on revisions. This canbecome extremely expensive! Ask him/her for your approval priorto discussion with any other individual regarding your lease.Numerous phone calls, meetings, discussion, etc. between yourattorney and another party can add up to a disheartening bill!



“Do not neglect ergonomics in

designing your operatories and

administrative areas. I would

recommend working with someone

who is knowledgeable on

dental operatory layout, doctor,

assistant and patient positioning.”




13. Secure Office Insurance

It is time to begin the underwriting process for your officeinsurance. Umbrella policies (where one company underwritesmultiple policies) are usually more affordable. Shop around, asthere are many companies to choose from. You will need to pur-chase the following types of insurance:

• Commercial liability office insurance• Business personal property insurance• Personal property of others• Personal property of premises• Monies and securities• Malpractice insurance• Workers’ compensation

14. Sign Building Lease

Once your lease is finalized, you will need to sign it and obtaina copy to be kept in a safe. Your space is now officially yours! Noone can out-bid you and “steal” your office out from under you!Thank your attorney and write him or her a big ‘ole check!

15. Sign Equipment List

Sign your dental equipment and supply list. The equipmentorder can now be placed and you can begin to give your dentalsupply company some general dates when equipment should bedelivered. Remember that some equipment can take longer toorder, ship and install… so plan ahead!

16. Secure General Contractor

Decide on your general contractor and have an initial meet-ing with him to ensure all questions are clarified. Advise himthat you would like to meet with him and any applicable sub-contractor foremen who might have questions regarding a den-tal up-fit. Advise him you will be calling him to schedule asecond meeting with all team players (architect, general contrac-tor, dental equipment manager, etc.) He will have you sign acontract with him. Obtain a copy of this contract!

17. Set Up Meetings

Set up times to meet with dental supply companies, yourgeneral contractor, all sub-contractors (plumbing, electrical,millwork, etc.) architect, landlord and your team. Some areas ofinterest to discuss are:

• Imaging (radiograph) room must follow state radiationguidelines.

• X-ray controls must be located a certain distance outsideof the room with a view window (lead glass).

• Special wiring to accommodate pan/ceph and intra-oralradiograph unit.

• Location of mechanical room (compressor, vacuum sys-tem, phone board, computer exchange board).

• Air lines run to sterilization and lab (hand piece for acrylictrimming, lab work, etc.).

• Water lines to lab for model trimmer.• Plumbing, air, vacuum lines to each dental chair (core

drilling through a concrete floor will be required).• Recessed ultrasonic in sterilization and drainage.• Any sterilization equipment that will be placed in vented

drawers.• Special orders for pediatrics (small sinks, urinals, short

toilets, etc).• Placement of master control switches for vacuum and air

compressor.Points of interest to remember and discuss between your

team members are:• Once you feel you have designed the ideal operatory,

“construct” the operatory from cutout cardboard includ-ing the dental chair, operatory and assistant stools, cabi-nets and counters. This will give you a chance to try it outfor size and working space. Do not neglect this step if youare designing an area that is different than what you haveused in the past! Ideally, a closed operatory should be 11feet x 11 feet if you utilize technology and plan to haveseating for a guest in the room.

• Do not neglect ergonomics in designing your operatoriesand administrative areas. I would recommend workingwith someone who is knowledgeable on dental operatorylayout, doctor, assistant and patient positioning.

• Make sure you have sufficient electrical outlets strategi-cally placed.

• Plan which way the cabinet doors in the administrative,quiet room and treatment area will open. The “standard”way might not work for the assistant or receptionist. Insome areas, you might not want doors on cabinets. Watchthe swing of the cabinets and measure them to make surethey will not hit anything. Consider sliding cabinet doors.

• Remember to design signage for bathrooms and otherdoors and areas you need to designate.

• Place all light switches in the most convenient locations. Doa walk-through first before confirming the electrical plan.

• Dental software – make sure all of your video and audiois networked throughout your office.

18. Architect to Seal and Approve

Plans/Elevations

Almost all states will require that an officially certified archi-tect “seal” your plans (his professional approval). Many dental




supply companies offer to draw and design your office on aCAD/CAM machine and can even print out realistic “blue-prints,” but these are not “official” by the state. You will have tohave your architect makes these “official.” Make certain all cabi-netry is drawn as you have requested. If uncertain, have yourarchitect draw a schedule or detail of it. Once it is in the field, itis up to your general contractor to interpret, which can be risky!

19. Up-fit Construction

On average, the internal build-out of an office space in anexisting building should take no longer than three to fourmonths to complete. The dental equipment and chairs can beinstalled in less than a week. I cannot stress enough to try andbe onsite with your general contractor as much as possible. I wasthere almost every day! So many minor changes can be made inthe field that will save you much headache and expense downthe road. Your contractor will have many questions to ask/con-firm, and it is important for you to be right in the middle of itall! You know how you want your office to look, so ensure thatevery detail is how you want it. You have to walk into this officeevery day… make it the way you want it from the beginning!Common items missed that are costly to fix:

• Door locations and the direction they swing.• All outlets are in correct location (consider all below

counters with drop grommets, any above counter shouldbe horizontal and not vertical).

• Location of all light switches and are three-way switchesin the correct location?

• Counter heights: seated counter height, transaction ledgeheight, standing counter height, sink height.

• Computer monitors mounted on wall and cabling chasedbelow counter to hard drive.

• Flat screen TV’s reinforced wall mounting with power andnetworking cabling behind.

• Outlets for microwaves, dishwashers, refrigerators, crockpots on an island in the kitchen for buffet service.

• Computer/phone/network close to desk layout in consultrooms, doctors’ offices, etc.

20. Interview Staff/Secure Office Personnel

It will be up to you to interview and hire your initial team.I hired my practice administrator first, so that the front was cov-ered while I was my own dental assistant for the first few

months. This way, someone can answer the phones while youare producing!

21. Marketing of Practice

Approximately six weeks prior to opening your office youwill want to send a letter introducing yourself and announcingyour practices’ opening to the following groups:

• Local general dentists• Local dental specialists• New home/home relocation companiesReferral pads, business cards, letterhead, envelopes and all

office forms should be developed and printed at this time. Youwant to be prepared to open your doors and see patients as soonas possible. Remember that your rent begins the day your cer-tificate of occupancy (C.O.) is approved!

22. Open Doors and See Your First Patient!

I would advise having your staff in the office two days with-out seeing any patients. It will take you that long at minimumto ensure:

• Department of radiation protection has surveyed youroffice and approved it with the state.

• You have walked through with your contractor and madea punch list of any imperfections you want corrected.

• All forms are ready.• All dental supplies are inventoried.• All staff are trained on your dental software.• You have completed “trial runs” without patients includ-

ing printing all patient documents to every printer.• All equipment is in working order.• You feel comfortable with your environment.I am reminded on a daily basis that the decision I made to

open a practice was the right decision for me. Good luck in thepursuit of your dream! ■

Author’s Bio

Dr. Robert Elliott is a practicing pediatric dentist in Cary, North Carolina (CaryPediatricDentistry.com). He is the founder of Pedo Springboard, aconsulting business that helps pediatric dentists successfully open and manage their offices nationwide (PedoSpringboard.com). He can be contacted at [email protected].


Documents

practice management feature Hanging Your Single Shingle · to 10 months for the build-out of leased space and 12 to 20 months for full building construction. Remember: Draft a real-istic