The Much Neglected Business Plan
One of the main reasons for business failure is the lack of a realistic and adequate business plan. It is like going out to sea without a navigational chart and praying that the wind currents will take you where you want to go. In order to get a loan from a lender or investor, the dentist must prove that there is limited risk and give good reason to think that the dental practice will be a profitable venture long term. Statistically dental practices are good investments, but if not managed correctly they can struggle to be in the black and may never achieve their full potential simply because the business operators are under-informed and ill-prepared. Often dentists rely on key staff members to keep the business on track for success and are trusting that this is being done correctly.
Most dental office managers or business coordinators have never seen a business plan. It is not uncommon to be considered experienced in dentistry, great at scheduling and collecting the money and billing insurance, but a novice when it comes to business planning. In the beginning when you needed financing for start-up, a business plan was necessary, but why do you need a business plan after that?
A good business plan serves as a guide that you will follow throughout the lifetime of the business. A business plan is a blueprint that serves as a starting point to future analysis of the business systems to monitor growth and determine where to implement changes in the practice. Knowing the past performance will provide history of the practice and help give projections to the future of the practice.
Briefly the core principles of a business plan are:
The Organizational Plan addresses the description of the particular dental business, administrative set-up and descriptions of services and products offered. The creation of your Mission Statement and your short and long term business goals are part of this segment. Establishing the Employee Policy Manual and other procedure protocols to standardize office systems will be clarified in this principle. The type of management style is defined and job descriptions are created to assure accountability. Create an organizational chart to visually show areas of responsibility and the personnel in charge of each section along with the number of employees they will manage. If your management style is that of autonomy then who will the clinical staff answer to if there is a question about buying more instruments or taking a vacation? Without these organizational principles in place the practice is doomed to constant chaos and miscommunications.
The Marketing Plan integrates the activities involved in advertising, selling treatment acceptance, customer service, internal and external marketing strategies and networking. It is vital to know how to measure your patient base and monitor patient retention to insure practice growth. Determine how many new patients do you get each month and where are they coming from. Decide if and how you want to niche your practice in the current demographic and define your target market and how to reach them. An ongoing marketing plan is more necessary in today’s market than ever before as people choose more carefully where to spend their money.
Financial Documents are those records used to show past, current and projected finances. Using good financial software like QuickBooks will help keep you organized in this important area. Keeping overhead under control by managing current costs and projected costs is fundamental to a healthy practice. Understanding the principles of cash flow and how it relates to the practice accounts receivables is a required skill of a trained business coordinator.
U. S. Tax Information is the responsibility of the dentist CEO. A basic understanding of the U.S. tax system is an absolute necessity if you are going to write a business plan for a business that will operate within the U.S. Keep a calendar of federal taxes depending on how your business is defined. Whether a Sole Proprietor, Partnership, S Corporation or other, this must be set up correctly and using a professional in this area is recommended because of the ever changing tax laws.
If your original business plan is collecting dust somewhere, get it out and look it over. Get your staff onboard to spur the business in a new direction by giving them an opportunity to own their success. Visualize and strategize. Need help - call McKenzie Management and we will get you on the right course for future success.
If you would like more information on McKenzie Management’s Advanced Training Programs to improve the performance of your dental business skills, email email@example.com and inquire about our Dentist CEO Training or Office Manager Training.
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