“Graduate, go do a residency.”
“Graduate, serve in the armed forces.”
“Graduate, get an associate job.”
“Graduate, get an associate job and then buy in.”
“Graduate, get an associate job and then buy a different practice.”
Sound familiar? It should. These post-grad options are the main ones often touted in dental schools across the country, and for good reason – they’re relatively safe and predictable. The one option that is not frequently mentioned is:
“Graduate, get an associate job and then start your own practice from scratch.”
While the investment and productivity climate in Canada has seemed relatively precarious (i.e. risky/unstable, not pre-carious as in about to turn into a cavity) as of late, there will be room in the market for startup dental clinics to serve our growing population and replace those clinics that close down.
Starting your own clinic from nothing is not for the risk-averse – the lack of predictable cashflow compared to acquiring an existing practice can be a daunting hill to climb; however, scratch-starts do offer a plethora of advantages:
- The chance to shape a practice as your own brand from a blank slate.
- The opportunity to flex your entrepreneurial spirit in building a real, saleable brick and mortar business.
- Control and autonomy – instilling your own systems and team members, and picking the equipment, instruments, and materials that work best in your hands.
- The potential for a significant gain in net worth.
- Offer a great service to an underserved area (this is perhaps the most crucial to achieve rapid, stable success).
Dental startups are not, however, all glitz, glamour and entrepreneurial flexing. There’s plenty of risk to consider as well:
- Losing money, fast. Fixed costs can add up rapidly, and quickly get out of control. Entrepreneurial poverty can arise when a new owner is working twice as hard as when they were as an associate, just to keep things afloat, for less take-home pay.
- Ignorance and “flying blind” when navigating real estate and construction discussions and the buildout process, resulting in needless spending.
- Blowing a budget on construction and needing to finance the practice personally.
- Inexperience in leadership and business principles – dentists need to be able to stand up for their own self-interests.
- Needing additional income to supplement a slow start, which often means splitting time and focus between a part-time associate position that pays the bills, while trying to build the startup clinic.
- Time commitment issues, often resulting in extra strain on relationships/family life.
My family business background is in energy industrial project management, and once upon a time I used to work in various positions in the construction field, including as a cabinetmaker (BTW, I’m of the personal opinion that dental specific cabinetry is a poor use of your money). Since finishing dental school, I’ve worked as a locum dentist, as a solo associate in a satellite location, associate in busy group practice, partner in a startup-heavy DSO, and as an owner in my own startup. Throughout my career I’ve done three of my own clinic buildouts and held partnerships with other doctors that have done over 15 more startups. Along the way, I’ve experienced and/or witnessed all of the risks and benefits mentioned above.
A few common themes I’ve seen are to expect and plan for delays when building a clinic, and that some background research and education on the doctor’s end can save tens, if not hundreds, of thousands of dollars along the way. This latter theme is why my partner, Dr. Singh, and I created Snowball Seminars – to help Canadian dentists start or expand their own clinics in an effective and fiscally responsible manner. The ins and outs of building a dental clinic are too vast to cover in this article, but the following are some key concepts integral to the process:
VISION and RISK ASSESSMENT, WAR CHEST, BUILD YOUR TEAM
Early in the planning phase, have an honest conversation with yourself and loved ones about how and what types of dentistry you want to practice in the future (Solo? One associate? Multiple docs?), your risk tolerance and appetite for tackling a large project. Spend and save wisely and build up your war chest. But also, build up your professional team of advisors (bankers, CPA, lawyer, realtor, insurance broker, etc.) so you have the ability to move quickly if a good opportunity arises.
SITE SELECTION
Picking an adequate site is one of the most impactful aspects of the startup process. A poor location can quickly put your finances in the red and make it a painfully long process to crawl out of. Conversely, a great location can help cover up other deficiencies in your gameplan. Dentists in great locations can be successful in spite of a lack of business knowledge. We’ll always be looking to strike the perfect balance between projected patient flow and adequate square footage in which to be able to treat them. Too few patients and too much square footage is a large problem; lots of patients and too little square footage is also a problem, but one that I would take 25 hours a day, 8 days a week over the former.
EQUIPMENT SELECTION
The Cadillacs of dental equipment are not necessary to do a great Class II composite or prep the perfect crown. The Toyota versions will often suffice, and at a much lower price point. For less frequently used items, consider mobile options that allow use in multiple operatories, rather than paying for multiple units to place in each operatory (i.e. portable x-ray units).
FLOORPLAN/STORAGE
Changing a clinic’s floorplan is extremely difficult, disruptive, and costly to do once the walls are erected. Spend a lot of time picking apart your floorplan to find opportunities to create storage space, ensure smooth traffic flow, and isolate sounds. Make sure you have adequate room around the equipment you already selected: if you built a house with a garage that ended up being too small to park your $80,000 SUV in, you might be able to just park it on the street. But build a radiology room that you can’t fit your $80,000 CBCT unit in, and you won’t be willing to park that outside.
CONSTRUCTION STEPS
For a typical buildout in a leased commercial space, here are the phases of construction, many of which overlap (i.e. it’s not a purely sequential process):
- Floorplan Layout
- Scanning & Coring
- HVAC systems in strata
- Framing
- Plumbing & Sprinkler installation
- Electrical & low voltage
- Insulation
- Drywall (boarding, taping, mudding, sanding)
- Flooring install
- Paint
- Millwork & Cabinetry install (again, dental specific cabinetry isn’t a necessity here – a local cabinet shop can do a perfectly adequate job for much less)
- Dental Equipment install
- Decor & Furnishings
- Obtain occupancy permit & business license
MARKETING
The maxim “Build it and they will come” is often mentioned when starting a business. However, this may only ring true in markets devoid of any other dentists (which would be a great market to open in!). In the increasingly competitive field of dental clinics, simply throwing your doors open may not be enough. You may have a great skillset of fixing teeth and upkeeping oral health, you may now possess a shiny new facility in which to put those skills to use, but neither of those things is useful if you have no paying patients in your chair. Don’t blow your budget on a grandiose buildout with nothing left over to use to market and let patients know that your clinic even exists. We can get too wrapped up in which tile/paint colour/composite type/bib colour/handpiece design/letterhead font is best, when that brainpower and budget would be much better allocated to crafting a marketing campaign that converts well, and, ultimately, builds meaningful patient-practitioner relationships that serve both parties for a long time. Please don’t underestimate the importance of this subsection – I’ve owned a very lovely clinic that was slow to fill with patients, and it is a lonely, sad situation that one should strive to avoid.
Much like the informed consent process lets our patients know risks/benefits/alternatives for clinical procedures that they choose to undertake for a few hundred or few thousand dollars, dentists should similarly do a “startup” informed consent, where they educate themselves on the risks/benefits/alternatives to building a new clinic for a million or more dollars and be prepared to weather any complications as they may arise. This article barely scratches the surface of what to expect when building a dental clinic; there are plenty of educational resources available (dental specific, startup specific, and general business) to further prepare yourself for the challenging and rewarding journey ahead. I don’t want you to be “that dentist,” twiddling their thumbs alone in a marble-clad operatory with designer lighting, watching their rent and payroll add up and their main chequing account balance shrink. Get educated, get prepared, and get after it.
About the Author
Dr. Kollen was born, raised and educated in Greater Vancouver. After a stint in a small-town private practice, he joined a group practice and quickly became partner during a period of rapid growth: expanding from five startups to fifteen clinics in only three years. He then opened his own rapidly growing office, which reached capacity and was expanded only a few years after opening. Dr. Kollen has spoken about startup dental clinics at numerous conferences and podcasts. He can be reached at scott@kakeibodentalnetwork.com, or on Instagram: @drscottkollen.