If you want to develop a practice based on your vision, de novos are the best approach.
By Dee Fischer
Starting a dental practice takes a lot of hard work. There are no easy choices, and every decision you make introduces a set of new equally challenging questions that you have to find an answer for. Whether you are choosing to build a practice or purchase a practice, the processes are equally challenging. Even with the inherent challenges for starting a dental practice, there is one advantage to the de novos approach.
With de novos, you get exactly what you want. You get to create and manifest your vision for your dental practice, without the hassle of buying someone else’s culture. With acquisitions, everything comes as a packaged deal: the doctors, the support team, the building, and the company culture. That does not mean acquisitions are less effective, but they will not have your fingerprints on them without spending extra money after a major purchase. If you want to do this your way and develop a practice based on your vision, de novos are the best approach.
Establishing Your Location
First, you need to decide where you want the dental practice to be located. When I start to plan a de novo, I take a five-mile circle around the general location that I am looking at and learn everything I can about that area. Go in and talk to the surrounding businesses to see how they are doing, what their traffic looks like, who their customers are. Who is moving in and out of the neighborhood? Are their families close by? What is the average age of the families?
In addition to the demographics of the people in the area, it is also important to understand the market of that area. Are there any other dental practices nearby? Are they in a mall? Are they standalone? I will often visit other practices in the area to see how busy they are. In fact, I will act like a patient and ask for an appointment. If they do not have any appointments that day and the office is empty, that might tell you everything you need to know.
Not only do you want to find a community that fits what you are looking for, you also want to fit into the needs of the community. Census reports and heat maps can give you the specific information you need to know if your practice is going to fit in the community. It is all about getting out the boxes we typically operate in. That creativity will open doors and give you access to information that the usual avenues would not.
By investing time and money into research on the front end of your efforts, you will put yourself in a better position for opening day. Doing this ahead of time could potentially save you a lot of money in the long run. Also, it is important to trust your gut! If it feels like a bad situation, pull out before it is too late. There will always be another deal.
Building With a Budget
Once you have transitioned into the building phase of your de novo, there are many different things to consider. First, you need to build smart. Do not worry about building the Taj Mahal; build what you need to operate on day one. If you need to hire an interior designer, know the scope of the work they are going to do for you. Tell them exactly what you need them to do and nothing more. Drawing boundaries on interior decorating will keep them from tacking on projects that will increase the price of the overall job. On the other hand, buying a few buckets of paint and some inexpensive wall art is a budget-friendly way to add some personality to your practice.
When you hire general contractors, there are three things you need to consider:
1. Are they able to get bonded? You need to know if the people you hire can carry a good builder’s risk insurance while they work on your building. Also, ensure that they have current licenses with the Construction Commission.
2. Keep an open bid book to track the bids on your projects and track the time that your contractors spend on your projects. With a bid book, you can see the scope of the work that is needed and pick the best bid for your practice. You also need to approve everything so that the bank releases the money. For all my de novos, I sign and approve for everything. It is your property, and you need to understand where the money is going and what it is being used for.
3. Make sure that you are building contingency money! This is money that you set aside for unforeseen circumstances that may occur in the construction of your dental practice. Because it is set aside for a contingency, this is not money that the contractor is meant to touch,
for any reason.
Hiring and Marketing
During the construction of your practice, you should start the hiring process at a minimum of 45 days from opening day. The first person I hire is the doctor, followed by the dental assistant and the various members of support staff. Good people are an investment, so it is important to hire the best people you can find. Early on, you need to establish expectations for both parties, compensation, guarantees, and the vision of what you hope to accomplish. As important as it is that new hires are proficient in what they do, they also need to be a culture fit with your organization. Culture is everything, but it is not really something you can train. If they do not fit your culture, that is something you want to know early on.
When I open a de novo, I start marketing 30 days into my project. That may seem early, but there are a couple of good reasons for doing this: I want to fill my book and I want people to know that we are coming. A lot of patients are on a cycle of getting their teeth cleaned every six months or so, and I want to get in that cycle of cleaning to add patients to my docket. You captivate them with a creative marketing approach and make an appointment for them. Buy practice management software early on so that you can tell people your target open date and get them on the schedule to come in. When you open an office, you want to start with a good book where you have patients available to you from the beginning.
Starting a dental office is not easy, but it does not have to be impossible. When you approach your de novos with the right questions, preparation, and mindset, you will set yourself up for success. Make smart and informed decisions at every step of the process. Even if it means you have to walk away, you will not regret being informed.
Dee Fischer is CEO of Fischer Professional Group and has decades of experience growing DSOs helping doctors create systems, accountability, and passion in the workplace. She has been an integral part of several DSOs’ exponential growth, guiding the operations and HR management to scale to larger organizations
Dee helps practice owners construct state-of-the-art locations, providing a seamless and fun experience while delivering a remarkable turn-key project on time and within budget.