Business Planning

Advisors

Business Plan

Market Research

Partnerships & Incorporation

Financing

Advisors

Accountants

An accountant handles business records and financial matters. Choose an accountant using similar criteria to choosing a lawyer. The most helpful accountant will have experience with professional practices.

An accountant will help you:

understand the pros and cons of setting up a professional corporation.
choose the right business structure.
review the financial aspects of your business plan.
set up a system to track revenue and expenses.
prepare financial statements and tax returns.

Insurance Advisors

A knowledgeable insurance advisor understands you, your business, and your needs. The following is a brief description of the most common types of insurance:

Personal insurance protects you against claims by someone who suffers a bodily injury in your office.
Life insurance is for your beneficiaries in the event of your death.
Disability insurance provides income replacement in the event that you can no longer work due to an accident or illness.
Automobile insurance can cover a car that is used for business.
Fire insurance allows for reconstruction or repair in the event of damage due to fire.
Office-overhead insurance covers business expenses in the event that you can no longer work due to illness or a natural disaster (e.g., a flood).

For additional information: contact BMS or call 1-855-318-6557 for the CDHA Clinic Business Package

Bankers

A bank is a place to deposit and withdraw funds, but a banker should be much more. Your banker needs to understand your vision and goals, be kept up to date on the progress of your business, and be there to assist you when you want to grow and when you are facing financial difficulties.

Lawyers

It is important to look for a lawyer who is knowledgeable about professional practices. Many lawyers currently advertise their services in Canadian and provincial journals and publications. Word of mouth is also very helpful. Ask your friends and colleagues with professional practices who they work with.

A lawyer will help you:

perform relevant property searches and draw up a property lease.
draw up contracts with suppliers, employees, and independent contractors.
draw up agreements with partners.
draw up wills and plan your estate.
anticipate potential personal, professional, employee, and property liabilities.
set up your professional corporation.

Landlords

A landlord is the owner of leased premises. Your landlord may provide input by identifying problems, limitations, and solutions related to the premises.

Mentors

Mentors are an extremely important part of managing your business. They are individuals who may have guided you in the past and want to see you succeed in the future. They may be friends, colleagues, or family, but they must be those who are not afraid to ask you the tough questions and whose opinions you respect.

Business Plan

A business plan, the first step in planning your independent dental hygiene practice, is a document that summarizes the operational and financial objectives of a business and contains the detailed plans and budgets for how the objectives will be realized. The following describes the major components of a business plan.

Executive Summary & Mission Statement

The executive summary gives the reader a brief overview of your business and of your proposed plan. It should capture your passion and enthusiasm for the project.
The mission statement outlines your business philosophy and your vision of what your business will become. Include the name and address of your business and a short description of why you have chosen your location.

Staffing

Recruiting and hiring the right staff is crucial to the success of your business. Remember that your staff represents your business and vision when you cannot be in the office. The following is a list of some key positions you may be considering:

receptionists
dental assistants
dental hygienists
dentists (chair rental agreement only)

Include a brief summary of your proposed staff members duties and how they will be paid.

Timelines

Describe your proposed schedule for getting your practice up and running.

Advertising & Promotion

What are the advertising and promotional tools you will use to attract clients? These may include stationery, business cards, a website, signage, and radio, television, and newspaper advertisements. Describe which tools you expect to use and their costs. Also consider personal-networking strategies such as joining service clubs, introducing yourself to local businesses, and visiting schools, retirement homes, and community centres. Become visible! Volunteer to speak whenever possible, or set up a booth at local health fairs.

Contingency Plan

Describe your plans for insurance in case of illness or disability. Do you hold sufficient life insurance? What will you do if construction goes over cost or takes longer than expected?

Services

What services do you plan to provide? Do you plan to add additional services that differ from what is currently available? For instance, are you planning to promote custom mouth guards or teeth whitening procedures? Are you interested in naturopathic medicine and plan to use only natural products in your practice? Are you considering working with a massage therapist and including these services in your office? Describe your plan in detail.

Current Situation

What does your market look like? How large is the potential population base and what is their income, age, and education level? Are there any other dental hygiene practices competing with you? What trends can you identify in the market?

Marketing Plan

How do you plan to compete with other businesses and attract clients? What do you expect your competitors to do when you open? Also describe the technical advantages you provide over your competitors (fees, hours of operation, follow-up, customer service, etc.).

Business Planning

Before you can purchase equipment or start building your space, you need to ensure you have the following:

a business loan
a property lease
an agreement with a contractor
an agreement with a supplier

Describe your plans for acquiring the above.

Financial Plan

Describe your plans for financing the following:

construction and renovation
equipment, furniture, and supplies
business licenses
insurance, legal, and accounting fees

Provide the following revenue projections:

worst
expected
best
debt repayment

Market Research

Market research is a systematic, objective collection and analysis of data from a particular target market, competition, and/or environment. It incorporates some form of data collection about the characteristics of population groups within your business's geographic area of operation. You can hire a company to conduct your market survey, but doing the leg-work yourself will give you a much better idea of the characteristics of your target audience and provide you with insights you might not otherwise glean. There are abundant resources available to conduct your market research.

Sources

Use these sources for objective data about your target market:

Newspapers and periodicals: Financial Post, The Globe and Mail, Report on Business, Consumer Reports
Government catalogues: Statistics Canada and provincial and territorial statistics offices
Directories: Telephone and city directories
Websites: City websites and Chamber of Commerce websites

Consumer Behaviour

Consumers act according to a set of criteria. This means that consumers make purchase decisions that reflect a variety of personal characteristics and values, including:

cultural values.
social factors like family, social roles, and social status.
personal factors like age and life stage, occupation, economic circumstances, and lifestyle.
psychological factors like motivation, perception, learning ability, and personal beliefs.

Service Quality Model

This diagram illustrates how word of mouth, personal needs, and past experiences combine to influence a consumer's expectations of a service. It also demonstrates that management makes service decisions based on its perceptions of consumer expectations.

Word of Mouth→Personal Needs←Past Experience
↓
Expected Service
↑↓
Perceived Service
↑
Service Delivery (pre- and post-contact)
↑
Service Quality Specifications
↑
Management Perception of Consumer Expectations

A business owner's goal is to provide a service that is better than the consumer's expectations. The main determinants of service quality are access, communication, competency, and courtesy.

Interpretation of Market Data

To interpret your data, determine:

target population characteristics like age, sex, family status, culture, income, and educational levels.
whether there is a sufficient market population to support your business vision.
how many competitors have a similar business model, and how many have a different business model.
appropriate mathematical assessments. For example, the total population is 100,000, and the target population is 50,000. There are 10 competitors. Therefore, the ratio of competitors to the target population is: 1:5,000.

Buying Process

Typical steps consumers follow when purchasing services:

Needs recognition
Research
Evaluation of options and alternatives
The decision to purchase
Post-purchase behaviours

Partnerships & Incorporation

Cost-Sharing Agreement

A cost-sharing partnership refers to a relationship whereby two or more parties work together in one clinic and agree to share common costs. This agreement allows both parties to maintain separate client lists and charts and to bill their own clients. The partners share costs of the facilities, shared equipment, and shared staff, all of which are divided on an agreed-upon basis. In general, a cost-sharing agreement is easier to put together and easier to take apart than a shareholder agreement.

The cost-sharing agreement should describe in detail the respective obligations of the participating parties. Include the following information:

Names of the parties
Name of the clinic and who has the right to the name if the parties separate
How new clients will be allocated to the separate practices
Names on the property-lease agreement
List of common equipment and shared staff
Which expenses are shared and which are attributed to one party or the other
Statement of the right of first refusal if either party wants to sell their share
How the arrangement should be terminated if one partner dies, becomes disabled, or wishes to relocate or retire
Other points, such as the effective date and the term of the agreement

Corporations and Shareholders

A corporation is a legal entity. It consists of two or more partners who pool their income and their expenses. A corporation differs from a cost-sharing partnership because all of the income is owned by the corporation, not individually by each partner. The corporation pays all of the staff and expenses (supplies, rent, etc.) and is taxed on its net income as a legal entity. It also pays each of the partners a salary. Compared to a cost-sharing partnership, it is more complicated and more expensive to set up, and it is subject to more regulations and reporting requirements. Shareholders can sell their ownership by selling their shares in the corporation to others.

The shareholder agreement should include the following information:

Names of the parties
Procedures and circumstances for issuing additional shares
Loans and advances to the officers or shareholders
Declaration of dividends
Assets of the corporation
Whether any family members can be hired
Transfer of shares
Major contracts
Right of first refusal
How the arrangement should be terminated if one partner dies, becomes disabled, or wishes to relocate or retire
Any disagreement between shareholders including value of the shares and non-competition clauses

Financing

Financial Institutions

Chartered Banks & Trust Companies

A logical first step in financing your practice is hiring a bank manager. Many banks have centres that work exclusively with professionals.

Canada Small Business Financing Program

With the Canada Small Business Financing Program, the federal government assists by partially offsetting any potential losses from your regular bank loan. This program can only be used for leasehold improvements, improvements to equipment and leased property, and purchases of equipment.

Venture Capitalists

Venture capitalists are companies and individuals that have excess capital and are looking for an investment opportunity. A venture capitalist will take a share (equity) in your company, and you in turn give up partial ownership of the business. The Business Development Bank of Canada (BDC) may assist small and medium-sized businesses in this manner.

Types of Financing

Term Loans

A term loan is most often used to purchase equipment. The advantage is that the repayments of the loan are matched to the income that the equipment generates, and the schedule is matched to the equipment's life expectancy. Typically, the interest rate of a business loan is fixed.

Lines of Credit

A line of credit allows you to draw money as you need it, typically for day-to-day expenses. You apply for it as you would a loan. The interest rate fluctuates because it is tied to the prime lending rate.

Credit Cards

More than 70% of small-business owners use credit cards for small purchases, as a temporary source of cash, and to cover immediate expenses. A credit card gives instant credibility because suppliers are assured they will receive payment.