3/3 New Owner Pocketbook – A Three Part Series
Some people will tell you that the recent and unprecedented pandemic has irreparably altered your ability to be financed for the undertaking of building a new practice. They are right that today’s reality has seen a big change in both VC (Venture Capital) and regular bank financing. Having said that, the answer to whether to give someone money for their business idea, specifically with banks and credit unions, has and will always be dependent on risk. Bottom line is, if you come prepared, you will be able to secure the funding you need for your new and beautiful clinic.
These are some of the most important aspects you should investigate, prepare for, and incorporate into your business planning.
Peter Drucker, who is considered “the father of modern business management,” described the aim of marketing in one of his books as: “to know and understand the customer so well the product or service fits him and sells itself.” Peter believed that marketing is the most important aspect in business and, as such, is the beginning and end of every activity and process in an organization. In the scope of a clinic, and especially for a brand new one, the definition of your vision and what you want to be known for in the neighbourhood is crucial to your success.
The following are some elements to consider:
Brand – Your brand defines how existing and potential patients perceive you, your services, and your clinic. As such, you want to ensure that it encompasses your purpose and your core values. Most people think that they get to decide what brand they want to represent them; however, that cannot be further from the truth. Your purpose is something that is instilled in you and does not change over time. The only difference is that there are some people that have not discovered their purpose, while others have. I recommend reading Simon Sinek’s book, called “Start With Why” and use one of the exercises he recommends for finding your purpose. Once you are clear on your purpose, your clinic must become a reflection of it.
Colours – Humans are visual creatures. Using colours, we can communicate emotions, feelings and experiences. The right colour choice for your brand and clinic is one of the main pillars of your success and must be followed consistently throughout everything you do. Here is a very brief orientation of colours and what they represent in order to give you a better understanding.
Blue: Positivity, security and responsibility. Often used by companies to instill trust.
Red: Aggressive, provocative. Used by organizations to express passion and energy.
Green: Health, nature and wellness. Lighter shades have a calming effect.
Yellow: Vibrancy and optimism. Motivating and captivating. Helps capture people’s attention.
Purple: Sophistication, nostalgia, exclusivity and royalty. Works best for expensive products and services.
Pink: Dark shades for energy and excitement, with lighter shades for romance and beauty.
Orange: Friendly and fun, works great for children.
Brown: Simplicity, stability and elegance. Used to project a “down to earth” feeling.
Black: Simplicity and class. Often used for exclusivity and luxury.
White: Cleanliness and purity. Although simplistic, this color is very appealing to the human eye.
Positioning – Positioning encompasses all activities that are designed to portray yourself and your clinic as a particular type. This is an exercise which, by its end, you will know more not only about your future clinic but about all other clinics in your neighbourhood. Recall your purpose and core values and determine a spot on the axis where you see your clinic. Repeat the exercise for all the other dental clinics in your vicinity. You might end up seeing that many clinics already exist in your area. Then you will be up for a tough decision whether to keep the location, stay true to yourself and outperform everyone, or consider finding a new location or changing the theme of your clinic. I recommend against going against your purpose and values and strongly recommend pursuing the niche you are passionate about – there is nothing more valuable.
Competition – Continuing the thought from the previous point, when opening a new clinic, you are going to be competing with established clinics for patients. Analyzing the strengths and weaknesses of your competition is a delicate task, but a necessary one. For you to make the right decisions surrounding the construction, design, equipment, etc…, you must identify UVPs (Unique Value Propositions), which will make you stand out from the rest. You do not have to be unique in every aspect, just unique enough to make a difference to a patient. I understand that this is vague, so I’ll provide an example. Let’s say there are 35 dental clinics in your geographical radius. Through your research, you’ve determined that only three clinics have digital impression technology. If you decide to use it, you will not be unique, but add this to other “fairly unique” elements within a patient’s experience and you are building enough value to make an impact.
Location – I cannot stress enough how important location is for a dental clinic. As an owner of a brand-new clinic, you should not even consider a location on the 25th floor of a high rise building downtown with another 15 dental clinics. Unless you are offering unique procedures, this can be a death sentence for your clinic ownership. What you should look for is a ground level, high exposure location with great foot traffic and located near many residential areas. Your location will also affect the hours of work for your clinic. For example, in a residential location you will have to be open evenings and weekends to accommodate patients who work downtown. Consult with multiple advisors about the locations you are looking at so you can gather many opinions prior to your decision. As an insider tip, I recommend meeting with a few residential realtors that specialize in the neighbourhood and ask them about some of the outlooks of it and what type of home buyers do they see more (and sellers). This alone can give you a good insight into what the neighborhood will look like in 10–20 years. If you are not married to the idea of working in a big city, you can save yourself the research and open a clinic next to the new big box store. You can be sure that they have already done very expensive research and that location is prime.
Another aspect that you would want to focus on is the proper hiring of staff. Here, you must ensure they share your core values and purpose. It is not easy, but it creates a stronger team that stands together for something they believe in.
All this needs to get funded somehow. The items I covered in the article, and many more, must be outlined in detail in a business plan when you are looking to obtain funding. Make sure to compare terms of loans and not just the interest rate. In times like the current pandemic, I’ve seen too many young dental owners who lost their clinics because they had taken on too much debt and the terms of their loans did not allow them to pay only interest during times of crisis. We live in uncertain times, but if you plan extensively and ensure you have a plan B (and C), you will be able to own a successful clinic and take pride in your achievements, on a daily basis.
About the Author
Alex Zlatin is the CEO of dental practice management software company Maxim Software Systems (MaxiDent). He helps dental professionals take control and reach the next level of success with responsible leadership strategies. He leverages his experience in “Responsible Dental Ownership – Balancing Ethics and Business Through Purpose”, a detailed guide providing practical tools and a unique, proven approach to running a successful practice. alexzlatin.com; maxidentsoftware.com