Expanding your dental group can be an exciting and daunting task. It's a significant step that requires careful planning and preparation to ensure the success of your new practice. Instead of diving right in, take time to plan for the impending changes, and prepare for any challenges you may face.
Before expanding and taking your business to the next level, here are 5 steps you should take.
Research your target market
Before opening your new location, it's essential to conduct market research to ensure there's a demand for your services in the area. The research should include analyzing the local demographics, the competition, and the expected growth of the area.
You can also conduct surveys to get feedback from potential patients and gather information about their dental needs. Understanding the local market will help you determine the best location for your new practice, the services you should offer, and the pricing strategy that will work best in the area. Market research is crucial in making informed decisions and avoiding costly mistakes when expanding your dental group.
Develop a strategic plan to expand your business
A business plan is a blueprint that outlines the goals, strategies, and financial projections for your new location. It should include a detailed description of your services, target market, marketing plan, pricing strategy, and financial projections.
A big question to ask is whether you want to acquire an existing dental practice or build one from the ground up. Starting from scratch gives you the opportunity to put your own protocols in place from day one, while an existing practice might come with big habits that could be hard to correct.
Conversely, buying an existing practice comes with a built-in cash flow from the beginning, making it much less risky financially. A brand-new practice is going to have significantly higher initial marketing costs, plus the costs of outfitting the location — a pricey undertaking.
Most importantly, listen to the numbers. A solid business plan can help you secure financing for your new location, attract potential investors, and provide a roadmap for managing your operations. It will also help you stay focused and accountable throughout the expansion process.
Establish a solid foundation for success
Before you add a new location into the mix, it’s critical that your primary practices are running smoothly. Prior to Dentist or DSO led expansion, evaluate whether your current standard operating procedures and business practices are working to support your growth.
Are front-office workflows optimized?
Is the hygiene schedule full?
Are billing and collections running smoothly?
If there are any problems in these areas, they will surely transfer to the next practice.
It’s also best to establish an end goal: While you may only be adding one location now, consider your ultimate objective? Think about scalability in the processes and technology you have in place to save headaches and time down the road.
It's all about location, location, location
There are endless location-based considerations that can affect the success of your additional practice, including the socioeconomic landscape of the area. If you’re looking to expand into an area with different demographics, you’ll need to consider how you can best serve the community and remain profitable, particularly if you are in an area where fewer patients have dental insurance.
As you expand your business, consider offering a dental membership plan at your new (or all) locations to make care more accessible. It's estimated that out of pocket payments account for 42 percent of patient dental care costs, making dental care cost-prohibitive for many people. Patients with membership plans have been found to accept nearly 3X more treatment than uninsured patients—helping both the patients’ health, but also the practice’s bottom line.
Assemble the ultimate squad
The success of your new practice will largely depend on the team you hire. While front-office teams and clinical support staff are critical (pro tip: hire your office manager first, because they will be the one that ensures the practice runs smoothly), the biggest challenge can be finding (and retaining) an associate to help shoulder some of the workload. Identify your goals, priorities and code of ethics, and ensure any new associate meshes with the way you practice dentistry.
To get the best talent, you’ll have to compensate well, both in salary and benefits. Will the practice cover malpractice insurance, or is that on the associate? Who pays for continuing education? By taking good care of your associate, you’ll create a framework for a successful — and hopefully long-lasting — relationship in which the associate is just as dedicated to the success of the practice as you are.
If you prepare carefully, do your research, invest in both your patients and your team, and grow at a responsible rate, you can add a second practice successfully. After that, the sky’s the limit!
If you're interested in learning more about membership plans now to prepare for future expansion, read Kleer’s 3-step guide to group practice success.