Dental Business Plan Case Study is Amazing Story About Successful Dental Startup Launch With The Help of Business Plan for Dental Clinic.
The most effective model for entrepreneurs who are in need of a great dental business financial plan for convincing potential investors. An entrepreneur plans everything carefully when start working on the dental office business plan. On the other hand, an investor evaluates a dental startup business plan carefully before funding it.
The growing need for specialized healthcare has augmented entrepreneurs to take their ideas to the next stage. As a result of that, we can see growth in the private healthcare service sector. Among these healthcare services dental, skin, chronic diseases, and IT-based healthcare services are trending. Above all, IT-based healthcare services are growing at a high rate.
Digital technologies like 3D imaging, optical imaging, and artificial intelligence have triggered the growth of the dental market. As a result, many entrepreneurs are starting a dental business and taking their idea to the next level. But to start a dental practice business funding is required. And to obtain required funding, the importance of a dental business financial model is immeasurable.
The Need for Dental Business Plan
Stanley was looking for funding for his business idea, so he needed a great business plan. With this in mind, I developed the best dental startup business plan for him. Consequently, the dental office business plan has received the required funding, and the business is doing great.
With this in mind, I help my clients to turn their business ideas into a good plan that attracts investors. The case of Mr. Stanley Kramer was quite interesting, and it helped me develop a unified dental startup business plan.
The dental office startup business plan deliverables
Assumptions — Developed with contemporary assumptions
Valuation — of the business idea was important
Funds — Calculating start-up cost was important
Mr. Stanley Kramer has been thinking of starting his dental clinic business plan for over a year. In this case, he has developed his business idea while he was working as a dentist in one of the famous dental care centers in southern California.
He had a good idea of the equipment he would need to start the business. Fortunately, Stanley has some savings in his bank account, but it was not enough for starting a dental clinic business. So he approached some prospective investors and shared his idea with the investors. Fortunately, he found three potential investors who were interested in his business idea. But the investors wanted a complete business plan so that they can evaluate the business prospects.
Reasons for Requesting a Dental Business Plan
Stanley had a great idea about starting the dental office business. Unfortunately, he was struggling to put everything together as a business plan to convince investors to fund his business idea. At this point, he came to me to seek professional help. We have developed a dental office startup business plan for his dental office.
In due time, we considered all the important aspects of the dental office startup business plan including:
- Start-up Cost
- Required capital expenditure
- Financial forecasting
- Marketing and selling
- Customer service quality
- Other important business-related issues
F inally, the pitch deck was ready for the investors, and Stanley presented it to the potential investors. As a result, he got the required investments for starting his dental officer center.
Defining the Objectives of the Dental Office Startup Business Plan
At the beginning of our cooperation, I have talked with Stanley hours after hours to learn about his business idea. At the same time, I was making a list of things that were necessary for meeting his expectations.
To my surprise, Stanley had a good plan for ensuring a good return to his investors. He knew exactly how he was going to make a profit from the dental officer business. On the positive side, our client had great knowledge about the industry and dental practice profit margin. Particularly, the client gave us information about the industry turnover, growth rate, and IT-based trend in the sector.
The information that we got from the client helped us understand his business idea from different aspects. It helped me to work on the assumptions; especially the revenue assumptions. Now it was time to set objectives that Stanley wished to achieve with the dental clinic business plan. In the long run, Stanley had to meet several goals to run his dental clinic successfully.
The business plan had to meet the following objectives for ensuring funding:
- Dental practice startup cost breakdown
- Feasibility study of the dental business plan
- An effective dental business plan financial model
- Realistic sales and expenses assumptions
- Investment plan for the dental clinic
- Marketing & its impact on the revenue
- Dental practice income statement forecast
- Valuation based on assumptions
- Analysis of profitability
- Analysis of underlying risks
Dashboard of the Dental Office Startup Financial Model
The work began with designing the dashboard, as it is a tool to manage the dental business. Additionally, the dashboard was planned to design in such a way that it gives investors a great idea of the plan.
I n the first place, I had to determine all the variables that were significant for the dental office business plan financial model.
Also, I had to ensure that the principal variables of the model represent the real market condition. Information that I gathered from Stanley about his business helped me a lot to define these key drivers. The analysis revealed that dental business revenue is dependent on the number of patients. So, all the variables that are relevant to acquiring patients would be the significant ones for the model.
For the dental office business plan financial model, we have got the following variables:
- Marketing budget for acquiring new patients
- Percentage of retained patients
- Prices of different services
- Potential operating expenses
- Variable expenses
Once I had identified the key drivers of the dental clinic business plan financial model, I started looking for connected dashboard components.
It occurred to me that the following components would provide a good idea on the business at a glance:
- The assumptions for undertaking debt
- What tax rate would be implied on the business
- Contribution of different services to the revenue
- Projected financial performance for the next five years
- Cash flow behavior (forecasted)
- Profitability of the business
When I shared the dashboard idea with Stanley, he agreed that it would help him to meet his goals. Therefore, the dashboard components for the financial model was made final. Moreover, the dental office business plan writing was progressing with the model.
Forecasting Performances of The Dental Clinic Business Plan
The fact is, I could not overlook the principal objective of my client; funding his business idea. So, I had to think not only as an entrepreneur but also as an investor.
It is quite rational to think an investor will look for the following things when evaluating a business plan:
- Potential cash flow
- Valuation of the business
- Forecasted financial performance of the plan
- Feasibility (accuracy of the assumptions)
- Revenue & Expenses related to the model
Dental Business Plan: Revenue and Seasonality assumptions
T he price of different services was also defined based on economic equations. Not to mention that I also have considered the competitor’s price for different dental services. The marketing strategies for the business are great to bring enough patients to the clinic. Therefore, it was pretty clear that the marketing budget and marketing costs per customer are the determinants of revenue.
Dental lab business financial model revenue assumptions
The revenue for the dental clinic business plan will come from its potential patients. Hence, the accuracy of the revenue assumptions depending on the existing market conditions. Thorough research on the local market revealed the number of patients a standard dental clinic was getting.
The price of different services was also defined based on economic equations. Not to mention that I also have considered the competitor’s price for different dental services. The marketing strategies for the business are great to bring enough patients to the clinic. Therefore, it was pretty clear that the marketing budget and marketing costs per customer are the determinants of revenue.
Dental lab business plan seasonality adjustment
The financial plan for the dental practice should consider every aspect that makes it look authentic. Hence, I needed to adjust the seasonality impact on revenue. The client provided a great idea on the matter. Now the marketing budget was allocated to different months based on the probability of sales. As can be seen, the seasonality adjustment made the revenue model look real.
Dental Clinic Business Plan: Variable, Fixed, COGS, Wages expenses
Dental business plan financial model fixed expenses assumptions
Generally, expenses are significantly related to the dental practice profit margin. Naturally, fixed cost assumptions should show a realistic expense. A little research was done to get a realistic idea on the components of the fixed expenses.
Once the fixed expenses identified, several assumptions used for representing a real condition. Normally, fixed expenses increase over the years due to inflation. An inflation adjustment has done in the fixed expenses assumptions of the model.
Dental office business plan financial model variable expenses assumptions
Variable costs are directly related to the services and have a clear idea of these expenses are important. Stanley knew everything he would need to provide a service, so I have used his knowledge in this case. Consequently, the model had a perfect variable expense assumption. The expenses calculated as a percentage of revenue.
Dental business plan cogs calculation
Finally, I have all the components ready to prepare the COGS calculation function. It consists of the costs of materials and costs of direct labor.
Dental Office Business Plan: Financial Statements and Valuation Reports
Dental business income statement, balance sheet & cash flow statement
At this point, I had all the assumptions ready for using to estimate the probable income or loss of the business. Therefore, the income statement functions added to the model. Dental business income statement shows the projected income after tax over the next 5 years. Also, it shows a monthly breakdown, which makes it more realistic.
Similarly, the balance sheet and the cash flow statements of the business included in the model. Additionally, the cash flow statements showed in both the direct and indirect methods. It was really helpful in the case of the client as he was starting a dental office business.
Dental business valuation
The valuation model discounted the free cash flow of the business over the next five years. It also calculated a terminal value using different components like growth rate, the required rate of return, internal rate of return, etc. The discounted terminal value and cash flow provided a net present value (NPV) of the plan.
Apart from that, the client had options to use other valuation models as well. The valuation part was undeniably important for the client for securing funding for the dental clinic business plan. Generally speaking, there are several valuation methods that I could use for valuing the plan. I have discussed the valuation methods in another article which you can read here. Specifically, I have used the discounted cash flow model for valuing the proposed business plan.
Useful Features of the Dental Business Plan Financial Model
In order to ensure efficient management, some useful functionalities were added to the model. The model has the functionality to track the capital expenditure and capital of the business. Besides, the model helps in monitoring the inventory and working capital requirements.
For controlling the expenses, the model shows top expenses; and to facilitate marketing, it shows top revenues. In addition to that, the KPI indicators help monitoring the activities of staff; to determine the effectivity of wages.
Ultimate Benefit of the Dental Business Plan Financial Model
The financial model was prepared for the client so that he can achieve several goals. Among those goals, the most important goal was to ensure funding for the dental clinic business plan. The amazing fact is, Stanley secured his funding within 3 months of preparing the business plan.
oreover, the client described he had received the following benefits from using the financial model:
- Pricing of services was easy
- Assumptions were realistic
- Made operations management easy
- Marketing budget-related strategies become easier
- Controlling the cost becomes easier
If you are thinking of starting your dental practice, then you may try our unified version of the dental clinic business plan financial model.
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