Skip to main content
BMO Commercial Bank Close Icon

Select Region / Language

  • US
    • English
  • Canada
    • English
    • Français
BMO Commercial Bank
Commercial Close icon
search icon

Insights

No match found

Industries

No match found

Solutions

No match found

Experts

No match found

Get On Our Email List


Select the business and financial topics of interest to you and sign up to stay current on the latest news
Sign Up Now >
  • Industry Expertise
  • We Can Help
  • Our Podcasts
Who We Are
Industry Expertise
We Can Help
Our Bankers
Our Podcasts
Contact us Get on our email list
BMO Banking

Find

Sign In
Bookmarks 0

Reading List

Email icon
COMMERCIAL
  • Online Banking for Business
  • Auto Dealer Access System
  • Equipment Finance
  • Transportation Finance MyBMOAccount
  • Transportation Finance Business Pro 2.0
  • Diners Club
  • BMO Spend Dynamics
  • Personal
  • Private Wealth
  • Business
  • Commercial
  • Capital Markets
United States EN Contact Us Sign-in
  • Commercial

  • Online Banking for Business
  • Auto Dealer Access System
  • Equipment Finance
  • Transportation Finance MyBMOAccount
  • Transportation Finance Business Pro 2.0
  • Diners Club
  • BMO Spend Dynamics

Select Region

  • US
  • Canada

Select Language

  • English

Resources

BMO Commercial Bank
search icon
  • Who We Are
  • Industry Expertise
    View all of Industry Expertise
    • Agribusiness & Protein
    • Agriculture
    • Auto Dealerships
    • Commercial Real Estate
    • Correspondent Banking
    • Dental Practices
    • Educational Institutions
    • Engineering & Construction
    • Food & Beverage
    • Franchise Finance
    • Fuel Services & Convenience
    • Futures & Securities
    • Governments
    • Healthcare
    • Logistics, Rail and Shipping
    • Manufacturing
    • Metals
    • Not-for-Profit Organizations
    • Private Equity Sponsors
    • Professional Services
    • Retail & Wholesale Distribution
    • Specialty Finance
    • Technology & Innovation
    • Trucking
    • Agribusiness & Protein
    • Agriculture
    • Auto Dealerships
    • Commercial Real Estate
    • Correspondent Banking
    • Dental Practices
    • Educational Institutions
    • Engineering & Construction
    • Food & Beverage
    • Franchise Finance
    • Fuel Services & Convenience
    • Futures & Securities
    • Governments
    • Healthcare
    • Logistics, Rail and Shipping
    • Manufacturing
    • Metals
    • Not-for-Profit Organizations
    • Private Equity Sponsors
    • Professional Services
    • Retail & Wholesale Distribution
    • Specialty Finance
    • Technology & Innovation
    • Trucking
  • We Can Help
    View all of We Can Help
    • Addressing Covid 19
    • Asset Based Lending
    • Business Strategy
    • Corporate Advisory
    • Doing Business Internationally
    • Doing Business in Canada
    • Economic Insights
    • Equipment Finance
    • Finance Growth
    • Manage Cash Flow
    • Manage Risk
    • Mergers & Acquisitions
    • Minority-Owned Businesses
    • Wealth Management
    • Addressing Covid 19
    • Asset Based Lending
    • Business Strategy
    • Corporate Advisory
    • Doing Business Internationally
    • Doing Business in Canada
    • Economic Insights
    • Equipment Finance
    • Finance Growth
    • Manage Cash Flow
    • Manage Risk
    • Mergers & Acquisitions
    • Minority-Owned Businesses
    • Wealth Management
  • Our Bankers
  • Our Podcasts
    View all of Our Podcasts
    • Markets Plus
    • Sustainability Leaders
    • Markets Plus
    • Sustainability Leaders
  • List of bookmarks
    0
    Bookmarks

    Reading List

    Close icon
    Email icon
Navigation Skipped
Navigation Skipped
search icon

Insights

No match found

Industries

No match found

Solutions

No match found

Experts

No match found

Get On Our Email List


Select the business and financial topics of interest to you and sign up to stay current on the latest news
Sign Up Now >
BMO Commercial Banking

Dental Practice Financing: Writing a Business Plan

  • Share this page
    Share this page
    Share page link via email
    Share page link via Facebook
    Share page link via Twitter
    Share page link via Google Plus
    Share page link via Linkedin
  • bookmark

  • print

Dentist working on business plan with consultant.
July 30, 2019 | Dental Practices
Dentist working on business plan with consultant
July 30, 2019 | Dental Practices
  • Keywords:
  • business plan

Writing a business plan is an important early step in planning for a successful dental practice. Whether you’re acquiring an existing practice, expanding a current practice or starting from scratch, a business plan adds the necessary muscle to the skeleton of your idea, allowing prospective lenders and investors to evaluate your request for funds.

 

The core elements of a business plan include: 

 

Description of practice. This explains the service you plan to provide in clear terms. It includes the name and address, as well as a list of owners and licensed dentists, and the number of years they have been in practice. It also includes the legal form of ownership of the practice and the state where it is (or will be) registered. Be sure to include details like size, a target number of patients, a breakdown of staffing, and number of locations. If you are acquiring an existing practice, highlight the changes you may be planning to make regarding staffing, hours of operations, locations, and so forth. It can also explain who your target patients are, how you wish to treat them, and your philosophy of care.

 

Management and staffing plan. You may need to hire more employees, including a qualified practice manager, as your practice grows. A management and staffing plan identifies:

  1. Who you intend to hire and how potential employees will be screened (such as background checks).
  2. All salaried roles, both dental and non-dental.
  3. The responsibilities you intend to give them.
  4. The forms of compensation you plan to provide.
  5. The benefits you plan to provide.

 

Operational plan. This explains the day-to-day operations of your practice, including hours of operation, emergency and backup procedures, scheduling of clinical, procedural and administrative blocks of time, and so forth. It also considers payment options for patients, including accepted payer mix (private insurance, Medicare and Medicaid).

 

Marketing plan. This includes an analysis of client characteristics such as age and other demographics, treatment pricing, and your strategy to increase the number of new patients and retain existing ones. A marketing plan also discusses advertising and an analysis of other practices in your area. The marketing plan should also outline the geographic area being targeted.

 

Financial data. This is perhaps the most important element of a business plan and should consider the following:

 

Startup and operating budgets. When starting a practice from scratch, you’ll have to pay for the office space, equipment and supplies needed to get up and running. After your initial acquisition, you’ll need to estimate the cost to maintain practice operations over a period of time (typically 12 months), otherwise referred to as an operating budget. Until it’s earning enough to cover an operating budget, your practice will likely rely on other funds (such as a line of credit or your personal savings) to pay the operating expenses.

 

Balance sheet. This is a graphical representation of your practice’s assets, liabilities and equity at a given point in time. Through a process called articulation, the balance sheet is related to the other two major types of financial statements—income and cash flow. Including a set of forecasted financial statements demonstrates an understanding of accounting principles to lenders or investors.

 

Break-even analysis. This examines various combinations of sales and fixed costs necessary for your practice to begin earning a profit. The break-even point is the volume of sales necessary to cover your fixed and variable costs.

 

Forecasted income. The income statement is one of the two financial statements that connect the period of time between two balance sheets. An income statement measures patient collections, expenses and profit or loss over the reporting period. The most common length used for a full reporting period is 12 months.

 

Because you don't know what your income statement will look like in the future, you have to make a forecast, often referred to as projections. Expect a prospective lender or investor to question your assumptions. To counter such scrutiny, make realistic forecasts.

 

Forecasted cash flows. The cash flow statement is the other financial statement that connects the balance sheet between two points in time. The cash flow statement measures cash inflows and cash outflows from three business activities: operating, investing and financing.

 

First-time dental practice owners often have great ideas and a willingness to work hard and including a business plan with your request for funds can help demonstrate that you have financial stability with a strategic focus on running and growing the practice.

 

Note: We recommend practice owners consult qualified professional advisers for legal, finance, accounting and tax guidance when considering starting or acquiring a practice.

Read more
This is part 1 of a 4-part series on

Whether you’re acquiring an existing practice, expanding a current practice or starting from scratch, a business plan adds the necessary muscle to the skeleton of your idea.

PART 2

Dental Practice Financing: Estimating Your Capital Needs

August 07, 2019 | Dental Practices, Finance Growth

young dentist going over finances on laptop

Whether you’re opening a new practice, expanding a current practice, or acquiring an existing one, you’ll need to estimate how much mon...


PART 3

Dental Practice Financing: Leasing vs. Buying

August 14, 2019 | Dental Practices, Equipment Finance

dentist's office with brand new equipment

If you’re starting a new practice or working to expand your current practice, you may find yourself seeking to keep your cash expenditures as...


PART 4

Dental Practice Financing: Capital Budgeting

August 21, 2019 | Dental Practices, Finance Growth

young dentist working on budget

An important step before raising funding, or capital, for your dental practice is to estimate its capital requirements. Some of the capit...


Get On Our Email List


Select the business and financial topics of interest to you and sign up to stay current on the latest news
Sign Up Now >

More Insights

stock image

Resource Title

Jan 99, 2099 | Primary Category, Secondary Category
short description goes here

Find a Banker

Tell us three simple things to
customize your experience.

How we can help
How we can help
clear selection
clear selection
clear selection
How we can help
How we can help
How we can help
How we can help

Commercial

  • Personal
  • Wealth Management
  • Small Business
  • About BMO

Commercial

  • Who We Are
  • Industry Expertise
    • Agribusiness & Protein
    • Agriculture
    • Auto Dealerships
    • Commercial Real Estate
    • Correspondent Banking
    • Educational Institutions
    • Engineering & Construction
    • Food & Beverage
    • Franchise Finance
    • Futures & Securities
    • Governments
    • Healthcare
    • Manufacturing
    • Metals
    • Not-for-Profit Organizations
    • Private Equity Sponsors
    • Professional Services
    • Retail & Wholesale Distribution
    • Specialty Finance
    • Trucking
    • Dental Practices
    • Fuel Services & Convenience
    • Logistics, Rail and Shipping
    • Technology & Innovation
  • We Can Help
    • Asset Based Lending
    • Business Strategy
    • Doing Business Internationally
    • Economic Insights
    • Equipment Finance
    • Finance Growth
    • Manage Cash Flow
    • Manage Risk
    • Wealth Management
    • Corporate Advisory
    • Doing Business in Canada
    • Addressing Covid 19
    • Minority-Owned Businesses
    • Mergers & Acquisitions
  • Our Bankers
  • Our Podcasts
    • Markets Plus
    • Sustainability Leaders
phone hover icon email hover icon phone hover icon email icon phone icon share icon

Contact Us

  • Find a Banker
  • Get on our email list

Follow BMO

  • Careers
  • Security
  • Privacy
  • Legal
  • Sitemap
  • Accessibility
  • Modern Slavery Act Statement
  • About Us

Banking products and services are subject to bank and credit approval. BMO Harris Bank N.A. Member FDIC. BMO Commercial Bank, BMO Equipment Finance and BMO Transportation Finance are trade names used by BMO Harris Bank N.A. BMO Sponsor Finance is a brand name used by BMO Financial Corp and its affiliates.

Please note important disclosures for content produced by BMO Capital Markets. BMO Capital Markets Regulatory | BMOCMC Fixed Income Commentary Disclosure  |  BMOCMC FICC Macro Strategy Commentary Disclosure  |  Research Disclosure Statements.

BMO Capital Markets is a trade name used by BMO Financial Group for the wholesale banking businesses of Bank of Montreal, BMO Harris Bank N.A. (member FDIC), Bank of Montreal Europe p.l.c, and Bank of Montreal (China) Co. Ltd, the institutional broker dealer business of BMO Capital Markets Corp. (Member FINRA and SIPC) and the agency broker dealer business of Clearpool Execution Services, LLC (Member FINRA and SIPC) in the U.S., and the institutional broker dealer businesses of BMO Nesbitt Burns Inc. (Member Investment Industry Regulatory Organization of Canada and Member Canadian Investor Protection Fund) in Canada and Asia, Bank of Montreal Europe p.l.c. (authorised and regulated by the Central Bank of Ireland) in Europe and BMO Capital Markets Limited (authorised and regulated by the Financial Conduct Authority) in the UK and Australia.

The material contained in articles posted on this website is intended as a general market commentary. The opinions, estimates and projections, if any, contained in these articles are those of the authors and may differ from those of other BMO Commercial Bank employees and affiliates. BMO Commercial Bank endeavors to ensure that the contents have been compiled or derived from sources that it believes to be reliable and which it believes contain information and opinions which are accurate and complete. However, the authors and BMO Commercial Bank take no responsibility for any errors or omissions and do not guarantee their accuracy or completeness. These articles are for informational purposes only.

This information is not intended to be tax or legal advice. This information cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer. This information is being used to support the promotion or marketing of the planning strategies discussed herein. BMO Harris Bank N.A. and its affiliates do not provide legal or tax advice to clients. You should review your particular circumstances with your independent legal and tax advisors.

Third party web sites may have privacy and security policies different from BMO. Links to other web sites do not imply the endorsement or approval of such web sites. Please review the privacy and security policies of web sites reached through links from BMO web sites.

 

Notice to Customers

To help the government fight the funding of terrorism and money laundering activities, federal law (USA Patriot Act (Title III of Pub. L. 107 56 (signed into law October 26, 2001)) requires all financial organizations to obtain, verify and record information that identifies each person who opens an account. When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask you to provide a copy of your driver's license or other identifying documents. For each business or entity that opens an account, we will ask for your name, address and other information that will allow us to identify the entity. We may also ask you to provide a copy of your certificate of incorporation (or similar document) or other identifying documents. The information you provide in this form may be used to perform a credit check and verify your identity by using internal sources and third-party vendors. If the requested information is not provided within 30 calendar days, the account will be subject to closure.