1.0 Executive Summary
The purpose of this business plan is to showcase the ongoing development of a periodontist dental practice based in Seattle, Washington. Deutsch Periodontal Group PLLC (“the Company”) was founded this year with the intention of providing a wide range of services specific for the needs of treating gum related issues. At this time, the Company is seeking a $300,000 loan in order to establish the Company’s operations within this population dense and wealthy market. Full scale revenue generating operations will commence in the fourth quarter of this year once the periodontist office has been fully developed.
Operations
The Company will offer the full range of services that are offered by a properly trained periodontist. This will include comprehensive treatments that address issues of the gum and other related dental matters. The business will primarily generate its revenue from reimbursement from dental insurance carriers. Given the substantial population of this area, as well as the large number of major corporations, the vast majority of people in this market have access to dental insurance. The business will also accept direct patient payments.
Each engagement with the patient is expected to produce $400 to $2,000 of revenue depending on the complexity of their procedures. For dental implant posts, the Company will typically generate $2,500 to $5,000 per engagement.
The third section of this periodontist business plan will further document the operations of the Company.
The Financing
The $300,000 of funding required to establish operations will be primarily used for the build out of the Company’s state-of-the-art dental clinic within Seattle. These funds will also be used for general working capital purposes, as well as the acquisition of equipment when rendering periodontal services.
On an as needed basis, Deutsch Periodontal Group could easily acquire additional rounds of to further boost growth. In the event that it is economically viable to develop a second periodontal practice location within the greater Seattle and King County market, the Company may acquire additional capital.
The Future
A major component of the Company’s growth will come from the ongoing hiring of staff periodontists that will render services alongside the Owner. The business will make ongoing reinvestment into its marketing operation so that the business becomes the preeminent periodontal practice within the Seattle metropolitan area market.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The funds discussed the executive summary will be allocated as follows:
The Founder will contribute $100,000 towards the development of the practice.
2.2 Management Equity
The Founder is the 100% owner of Deutsch Periodontal Group LLC.
2.3 Exit Strategies
There would be a significant amount of complexity for divesting Deutsch Periodontal Group to a third-party. This is primarily due to the fact that the business would need to be acquired by someone who is a properly trained periodontist. There is also a possibility that a dental group within the greater Seattle metropolitan area may absorb the operations of the business if they are seeking to provide a greater degree of periodontal services to their clients. In either of these potential sales events, the Company will work with a qualified business broker that has extensive expertise with dental practices.
3.0 Operations
As noted, the executive summary, the Company will offer a wide range of diagnostic and surgical services for treating gum disease issues. The specific types of services that will be offered will include:
• Crown Lengthening
• Cosmetic Procedures
• Deep Gum Cleanings
• Dental Implants
• Grafting
• Laser Therapies
• Pocket Reduction Surgery
The Company will enroll among numerous programs that provide ongoing reimbursement among a wide range of dental insurance carriers. It is expected that each engagement, on average, will produce $750 of revenue with a range spanning $400 to $2,000.
One of the major components of the Company’s profitability will be from install installing posts that are appropriate for dental implants. As this technology has evolved over the past twenty years, there is a tremendous demand among dental patients to acquire dental implants rather than using dentures or bridges.
4.0 Overview of the Organization
4.1 Registered Name
Deutsch Periodontal Group PLLC. The Company is registered as a professional limited liability Company in the State of Washington.
4.2 Commencement of Operations
The business will commence operations in the fourth quarter of this year.
4.3 Mission Statement
To provide cost-effective treatments that address an individual’s gum disease issues.
4.4 Vision Statement
To become the preeminent periodontal practice within the greater Seattle area.
4.5 Organizational Objectives
• Implement numerous marketing campaigns that will drive brand visibility within Seattle among people that have gum disease issues.
• Maintain ongoing relationships with general practitioners throughout the target market area for referrals.
• Maintain a program for continuing education so that the business operates implements best practices when rendering periodontic care.
• Properly onboard staff periodontists that will further expand the billable revenue of the business.
• Potentially develop satellite locations on it as needed basis as the brand grows.
• Adhere to all laws and regulations regarding the practice of dentistry within the State of Washington.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the periodontist business plan will focus on the current economic climate, the industry, the patient profile, and the ongoing competition at the business will face.
At this time, there are some moderate issues with the US economy. Foremost, the issues with inflation have caused the underlying costs of nearly all products and services to increase significantly over the past five years. It should be noted that numerous federal government agencies, including the Federal Reserve, and the United States Treasury, are taking the appropriate measures to address affordability and inflation.
As it relates to rendering periodontal care, issues with the economy should only have a minimal impact on the ability for the practices ability to remain profitable. This is primarily due to the fact that people that have gum disease and related dental issues require comprehensive care as this is imperative for their health. The vast majority of people within the greater Seattle metropolitan area have access to comprehensive dental insurance that covers periodontal procedures.
5.2 Industry Analysis
There are 181,000 businesses that provide dentistry services to the general public. These businesses aggregately produce $180 billion of revenue while employing 900,000 people.
As it relates to the specialty of periodontists, there are approximately 5,500 practitioners that render care for gum disease issues. The demand for periodontal care is expected to increase in the coming years, especially as people from the Baby Boomer generation require a greater degree of dental services.
5.3 Customer Profile
Any individual that has a gum disease related issue is a potential patient of Deutsch Periodontal Group. As will be noted later in the document, the Company will take a broad-based approach for sourcing patients within this market with a major focus on establishing referral relationships with general dental practitioners. The average client will have an income ranging from $80,000 to $200,000 and will have access to dental insurance.
5.4 Competitive Analysis
The ongoing competitive issues that the business will face as it establishes its periodontal practice are relatively low. The demand for comprehensive gum disease treatments is substantial and there are only a limited number of dentists that have a specialty in the field of periodontics. As such, the Company will be able to quickly establish profitable operations.
6.0 Key Strategic Issues
6.1 Sustainable Operations
Deutsch Periodontal Group will have sustainable operations as a result of the following:
• The business is operating within a highly in demand specialty of dentistry, which will lead to rapid patient onboarding.
• The Company can provide complete solutions when treating specific gum disease issues.
• The owner has more than ten years of experience as a periodontist and he is board certified in this specialty.
• The Company can easily onboard staff periodontists that will allow the business to increase its billings.
6.2 Basis of Growth
The Company will expand via the following methods:
• The business can establish satellite locations on it as needed basis.
• Continued hiring of periodontists and specialized dental technicians to provide a greater degree of services for the Seattle general public.
• Expansion of operations to include subcontracted labor among endodontists and oral surgeons when rendering treatment.
7.0 Marketing Plan
7.1 Marketing Objectives
• During the development period, conduct extensive direct outreach with general dentist in the Seattle market for referrals.
• Maintain an expansive online presence that showcases the entire scope of periodontal services offered.
• Use target advertisement among people that have recently conducted searches for addressing gum disease issues within the market area.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• The business will establish its periodontal clinic in Seattle.
• Revenue will reach $1.1 million.
Year 2
• An associate periodontist will be hired in Year Two.
• Revenue will reach $2.2 million.
Years 3-5
• By the fifth year of operation, revenue from periodontic services will reach $3.9 million.
• The business may establish additional locations at this time.
7.4 Marketing Strategies
Management will use a number of marketing strategies that will drive immense interest in the Company’s periodontal services. Most importantly, the business will receive the bulk of its patients from ongoing referrals among general dentists that do not have the capability for treating extremely severe periodontal issues. As the practice is being developed, the owner will conduct extensive direct outreach with general dentists within the market in order to inform them that the business is able to cost-effectively provide the full scope of periodontal care.
In regards to the Company’s website, the business will showcase the end-to-end periodontal solutions including both diagnostic and surgical services. This website will undergo substantial search engine optimization specific for the King County and Seattle area. Numerous articles regarding the proper care of an individual’s gums and teeth will be included so that the business can be quickly found among people that are looking to address their dental health needs.
On social media, the Company will use targeted advertisements among people that have recently conducted searches for gum disease issues. The business’ profiles will include Facebook and Instagram. On LinkedIn, the Company will maintain a page specific for onboarding periodontists that may work at the practice.
To position the practice as a community minded enterprise, the business will offer free periodontic screenings every quarter is well further increase brand visibility, especially among people that cannot afford comprehensive periodontic care.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• Deutsch Periodontal Group will achieve a compounded annual growth rate of 37%, which is supported by the ongoing hiring of periodontists.
• The Founder will contribute $100,000 towards the venture.
• A loan of $300,000 will be acquired to establish the practice.
9.2 Financial Highlights
• The Company achieve contribution margins of 85% on all periodontal services rendered.
• Staff cost will not exceed 36% percent in any given year.
9.3 Sensitivity Analysis
The business’ services will remain in significant demand even during an economic recession. In any economic climate, people suffer from issues related to their gum and dental health. As such, the Company will be able to continually provide diagnostic and surgical services within the scope of the periodontal specialty. This substantial contribution margins generated from all dental and periodontal services want for this business is able for main profitable.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
9.6 Breakeven Analysis
9.7 Business Ratios
SWOT Analysis
Strengths
• Extremely strong demand for periodontal services within the Seattle market.
• A limited number of service providers is driving this demand.
• The Company will receive a highly predictable frame of referrals from general dentists in Seattle.
• The significant size and scope of the target market coupled with the large number of technology companies that operate within this market will contribute to the economic stability of this periodontist practice.
Weaknesses
• Extensive operational complexities given that this is a dental focused enterprise.
• Moderately high cost related to payroll as staff periodontists command significant salaries.
Opportunities
• Continued hiring of specialized staff to further revenue growth.
• Onboarding of adjacent dental professionals, such as oral surgeons, prosthodontists, and endodontists that can render her services in tandem with this periodontic practice.
• Development of additional locations.
Threats
• Ongoing issues with inflation can cause many of the Company’s operating cost to increase.
• Changes in policies related to insurance reimbursement could impact profitability.
Risk Analysis
Development Risk – Low
The service architecture that will be offered through this periodontist practice has already been developed. The primary issue that needs to be addressed is securing the funding in order to establish operations in Seattle.
Financing Risk – Low/Moderate
The $300,000 of debt capital will be prince will use for the build out of this practice’s location as well as for periodontic treatment equipment. The economic stability of these types of practices will abate many of the financing risks.
Marketing Risk – Low
Referrals from general dentists is the most important aspect of the Company’s marketing operations. This will be complimented with general public facing marketing campaigns that will create significant brand-name invisibility.
Management Risk – Low
The Owner has been a practicing periodontist for the past 10 years. He will be able to effectively launch the operations of this practice while providing comprehensive care to his patients.
Valuation Risk – Low
The valuation risk is offset by:
• Highly limited competition within Seattle given at the demand for periodontic care exceeds the number of service providers.
• The Company will be able to thrive in any economic climate.
• The operations of this practice are highly scalable.
Exit Risk – Low
As noted earlier, there would be a significant amount of complexity for transitioning the ownership of this periodontic practice to a third-party practitioner. In all likeliness, associate periodontists will ultimately become the buyers of this practice, although this is not expected to occur for at least fifteen years.