CONCLUSION

Now that you have digested all this material, let’s use our Practice Management Handbook to lay out the steps from graduation to finding a position as an associate, purchasing a practice, understanding the business side of running an orthodontic practice, growing your practice, and, finally, managing a growing team of employees.

Finding an Associate Position

1. Read “Associating After Residency” by Meru to understand various types of associate opportunities.
2. Consider creating a corporation that will allow you to work as an independent contractor.
3. Review “Finding a Successful Associate to Fit Your Office” by Haeger to help you align expectations with reality. You will begin to formulate questions to ask in an interview, and you will be able to think carefully about what type of associate relationship you are getting into.

Working as an Associate

1. Read “How to Create a Personal Organizer and Financial Statement” by Haeger, update your expense record keeping, and build your first personal financial statement.
2. Set up your QuickBooks accounts by reading “Strategic Financial Statement for Better Practice Management” by Haeger and McGill. This information can be used to simplify bookkeeping for itemized deductions and to create the information base for a pro forma when it’s time to start your own practice.

Preparing to Own a Practice

1. Read the roundtable on “Starting a New Practice” to decide whether you are interested in starting from scratch rather than purchasing an existing practice.
2. Enhance your understanding of the financing side of a purchase or startup by reading “Practice Acquisition: Financing and Related Issues” by Hill.

Finding a Practice to Purchase or a Location to Start a New Practice

1. Start by reading “Organizing an Office Construction Project” by Haeger and filling out the accompanying Excel worksheets. Detailing the cost of a remodel or new construction with a corresponding budget will dramatically enhance your financial analysis of the project.
2. Read the three “Strategic Marketing Plan” articles by Haeger and Colberg to anchor your understanding of where new patients and starts come from and to develop your skills in creating a targeted internal and external marketing plan. The bank will want to know where you plan to get patients. Keep in mind that a startup practice will be slow to develop dentist referrals and will be more dependent on social media, insurance plans, and direct marketing to consumers. Purchasing an existing practice will allow you to establish dental referrals much faster.
3. Reread the “Strategic Financial Statement for Better Practice Management” article and create a two-year pro forma.
4. Review the three articles by Hamula to refine your ideas regarding the scope, appearance, and traffic flow of a properly designed office.
5. Prepare a presentation for the bank with the following components:

• Business plan including the type of corporation you have established, your practice’s mission statement and office goals, the scope of services you will be providing, and your competitive advantages.
• Funding request with interest-only terms for six to 12 months and a desired payback term.
• Market analysis of national and local trends, anticipated growth of the area, and income levels of the households surrounding of your practice.
• Competitive analysis covering current and future competitors, general practices doing orthodontic treatment, and corporations with orthodontic providers.
• Employee management and staffing levels. The banker will want to know the number of current employees and how many will be staying. You will personally want to know about the existing bonus structure, financial obligations, and vacation policies. The existing office manual will help you understand what kind of office you are purchasing. The five articles in our Staff Management section will provide valuable insight into office culture, employee compensation, staff meetings, and various employee metrics.
• Personal financial statement. Any banker will want a statement like the one you prepared as an associate.
• Construction budget to determine the amount of money you will need to borrow above the practice purchase price. The construction budget will help you determine what items you can afford to update right away and what can wait. Keep in mind that if the facility you purchase is outdated, the patients will expect some upgrades in the office “look” to accompany a new, younger orthodontist. Creating a fresh look will put your stamp on the practice.
• Marketing plan to answer the question of where your patients will be coming from. An Excel sheet with active budgets and a calendar will certainly impress the banker.
• Pro forma for your first two years in business, projecting personal cash flow and how you plan to pay off the loan.
• Personal expense model, which will help you decide if you can afford the practice, assess the impact of your student loans, and forecast when you can afford a house.
• The banker will also want to see three years of tax returns, profit and loss statements, year-end bank statements, and past-due reports from the seller. While these are not required to start the loan process, they will be needed before final approval.
• Other figures you will want to obtain are the number of patients in treatment who are already paid off, the number of finished patients who are still paying on contracts, the ages of all major equipment, and the lease terms and length.

6. The final articles to reread are the three in the Business Management section. These will help you set status, procedure, and scheduling codes to enable proper data tracking. While it may not be easy to reset the existing practice’s pricing strategy from day one, you will need to master this area to achieve a seamless transition.

Once you have fully mastered all the material covered here, I guarantee you will be far better prepared for ownership than most of the orthodontic graduates who have preceded you. Although many areas of practice management are covered in this handbook, many more questions will arise along your journey from resident to business owner. Good luck, and feel free to write or send in any recommended articles or material you feel may be missing from this compilation.

RSH