Opening an Specialty Practice
5409 Gateway Center Suite F Flint, MI 48507
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Agenda
Advantages vs. Disadvantages Checklist Timeline Resources
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Opening an Specality Practice Why?
Advantages vs. Disadvantages
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Advantages
Autonomy Taxes Retirement Profits
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Disadvantages
Risk Coverage Solidarity Management
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Checklist For Starting a Practice
Legal Set-Up
Office Set-Up
Vendor Set-Up
System Set-Up
Marketing Preparation
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Checklist For Starting a Practice
Legal Set-Up
• State Dental License • ADA/State/Local Membership • Proper Zoning Requirements • DEA License • IRS Tax ID # • OSHA Regulations • Workman Comp • Banking
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System Set-Up Entity Formation Business Plan Banker Accountant Attorney Bookkeeping Patient Mgt
Office Set-Up • • • • •
Design/Layout Buy/Lease Build Out Permits Loans
Vendor Set-Up • • • •
Local Reps Supplies Equipment
Marketing Set-up • • • • • • •
Introduction letters Referral Pads Phone/fax number Hiring Yellow Pages Business Cards Visits
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Checklist For Starting a Practice State Dental License DEA License [Anesthesia and analgesia permit (if needed) ] [ Legal Set-Up
ADA/State/Local Society Membership Formation of Business Entity IRS Tax ID #
http://www.irs.ustreas.gov
Banking Proper Zoning Requirements OSHA Regulations
State department of revenue – http://www.revenue.state.il.us/otherstates.htm Federal – http://www.irs.gov/businesses/index.html
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Checklist For Starting a Practice
System Set-Up
Business Plan Banker Accountant Attorney Insurances
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Checklist For Starting a Practice
Office Set-Up
Vendor Set-Up
Design/Layout Buy/Lease Build Out/Contractor Permits Loans Dental Equipment Dental Supply House/Local Reps Patients System (Scheduler/Mgt Software) Bookkeeping System Utilities 13
Checklist For Starting a Practice Marketing Set-up
Introduction letters Referral Pads Phone/fax number Hiring Yellow Pages Business Cards Professional Stationary, Business Cards Visits 14
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High Level Time Line
12 months
Legal Set-Up
9 months
System Set-Up
6 months
Office Set-Up
3 months
Vendor Set-Up
1 month
Marketing Set-up
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Time Line (1 yr prior)
Location! Location! Location!
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Time Line (1 yr prior)
Location Demographics Visibility GP:Endodontist Dept. of Economic development Chamber of Commerce Yellow Pages Dental Reps (specalist/GP) 18
Time Line (1 year prior)
ADA/State/Local Society
State dental societies – http://www.ada.org/ada/organizations/searchcons1.asp
American Dental Association – http://www.ada.org
Drive the area! Convenience/Parking Signage 19
Time Line (9 months prior) Insurances Professional liability Health Disability Life Business liability and property insurance
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http://www.ada.org/members/prac/insure/liability/states.asp
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http://www.ada.org/members/prac/insure/liability/glossary.asp 20
Time Line (9 months prior) Entity Formation
The main entities are: Corporations Limited Liability Companies Partnerships Sole proprietorships
The two main corporate entities are: Subchapter C corporation Subchapter S corporation A further sub category of the corporation is the personal service corporation which applies to dentist/doctors, lawyers etc. 21
Time Line (9 months prior)
Entity Formation Accountant/Attorney
Entity Choice Charts.pdf
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Character
Sole Proprietorship
C Corporation
S Corporation
Limited Liability Company
Formation
No state filing required.
State filing required.
State filing required.
State filing required.
Duration of Existence
Dissolved if entity ceases doing business or upon death of the sole proprietor.
Perpetual
Perpetual
Dependent on the requirements imposed by the state of formation.
Liability
Sole proprietor has unlimited liability.
Shareholders are typically not responsible for the debts of the corporation.
Shareholders are typically not responsible for the debts of the corporation.
Members are not typically liable for the debts of the LLC.
Operational Requirement
Relatively few legal requirements.
Board of directors, annual meetings and annual reporting required.
Board of directors, annual meetings and annual reporting required.
Some formal requirements but less formal than corporations.
Management
Sole proprietor has full control of management and operations.
Managed by the directors, who are elected by the shareholders.
Managed by the directors, who are elected by the shareholders.
Members have an operating agreement that outlines management.
Taxation
Not a taxable entity. Sole proprietor pays all taxes.
Taxed at the entity level. If dividends are distributed to shareholders, and taxed at the individual level.
No tax at the entity level. Income/loss is passed through to the shareholders.
If properly structured there is no tax at the entity level. Income/loss is passed 23 through to members.
Sole Character Proprietor ship
C Corporation
S Corporation
Limited Liability Company
Pass Through Income/ Loss
Yes
No
Yes
Yes
Double Taxation
No
Yes, if income is distributed to shareholders in the form of dividends.
No
No
Cost of Creation
None
State filing fee required.
State filing fee required.
State filing fee required.
Raising Capital
Often difficult unless individual contributes funds.
Shares of stock are sold to raise capital.
Transfera bility of Interest
No
Shares of stock are easily transferred.
Shares of stock Possible to sell are sold to interests, though raise capital. subject to operating agreement restrictions. Yes, but must observe IRS regulations on stock owners
Possibly, depending on restrictions outlined in the 24 op agreement.
Time Line (9 months prior)
Business Plan Business plan.doc – Road Map to personalize your practice! – And a detailed implementation and tracking device.
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Time Line (9 months prior)
Banker/Loan
100% practice financing plus working capital available Buyer/Seller referral network Demographic site analysis Fixed rates with terms up to 15 years Deferred, graduated, and interest-only payment plans available Combined practice and real estate loans available Financing for equipment, cabinetry, and office furniture, fixtures, and supplies Financing for renovations and construction Financing can include architecture, design, and management consulting fees 26
Time Line (9 months prior)
Banker/Loan
Personal financial statement – (usually lender's own form) and personal federal income tax returns (one to three years) Projected startup cost estimates Projected balance sheets and income statements for at least two years Projected cash flow statement for at least the first 12 months evidence of ownership interests in assets (e.g., leases, contracts) and collateral 27
Time Line ( 6 months prior)
Buy or Lease Lease Negotiations Build Out – Finance Tenant/Landlord – Construction Loan – Equipment Loan
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Time Line (6 months prior)
Office Design Sq. Feet Layout – Americans With Disabilities Act – Architect/Dental Supply Rep – Permits
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Time Line (3 months prior)
Local Reps
Supplies & Equipment – Meeting/Student Specials
Dental Buying Guide Dental manufacturers by name, location and product
http://www.ada.org/prof/resources/pubs/dbguide/index.asp 31
Time Line (3 months prior)
Computer Systems/Internet Connections – Practice Mgt. (PBS Endo) – Digital Radiographs (Dexis) – Accounting Software (Quickbooks)
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Time Line (1 months prior)
Yellow Pages/Marketing – Deadlines – Marketing Plan/(Non)Professi onal Help – Phone Numbers
Business Cards/Stationary – Continuous Theme
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Time Line (1 months prior) Hiring-Trust your INSTINCTS!
Pay Structure/Benefits Staff (Amt/Position) Verify licenses, as needed Employee Manual/Contracts – Employee Manual-GE.doc
– Standard Operating Procedures by Marsha Freeman
702-240-8519 800-563-1454 SOPS.COM They have a GP manual, & special insert for Endodontics. A CD is included with the 3-ring binder (~$450)
Vaccines and immunizations – http://www.ada.org/prof/resources/positions/statements/blood.asp 40
Time Line (1 months prior)
Employment Eligibility
(I-9 forms)/W4/State Forms
Federal & state labor law posters
American with Disabilities Act 41
Time Line (1 months prior)
Employee Office Manual: A Guide for the Dental Practice*
Smart Hiring: A Guide for the Dental Office*
Posters – http://www.govdocs.com 42
Time Line (1 months prior) Business Issues Payroll Define practice structure Practice financing
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Time Line (1 months prior)
ADA practice management and regulatory publications and guidebooks that are often requested by dentists opening new practices.
To order, contact the ADA Catalog department. www.adacatalog.org or 1-800-947-4746.
Associateships: A Guide for Owners and Prospective Associates Valuing a Practice: A Guide for Dentists Practice Options for the New Dentist Dental Office Design: A Guide for Building, Remodeling and Relocation
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Time Line (1 months prior)
Employee Office Manual: A Guide for the Dental Practice Smart Hiring: A Guide for the Dental Office Basic Training I for New Dental Office Staff Basic Training II for New Clinical Personnel Basic Training III: for Dental Administrative Protecting Your Dental Office from Fraud 45
Time Line (1 months prior)
Dental Letters with Impact Develop a Dynamic Web Site for Your Practice The Ultimate Dental PR for Dentists and the Dental Practice CDT 2006
Regulatory:
Regulatory Compliance Manual
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Time Line (1 months prior)
Effective Infection Control: A Training Program for Your Dental Office OSHA in the Dental Office HIPAA Privacy/Security Kit
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Time Line (1 months prior)
www.aae.org/rootcanalspecialists.com
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Time Line (1 months prior)
Fees! – State Dental association (Fee Schedule) – Other ways to determine fees – Insurance Companies Participate/Non-Participate E-Claims Update
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Time Line (1 months prior)
Banking – Checks (Several Types) – Deposits Slips – Automatic insurance payments
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Time Line (1 months prior)
Marketing – Referral Letter – Referral Pads/Cards
Good Directions!!!
– Shaking Hands
referrals want to send their patients to someone who they enjoy talking to, and someone they trust. The only way you will like and trust someone is to get to know them, face to face.
– Local Society Meetings 51
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Time Line-Live!!!
Continual Marketing Human Resources Tax Implications Financial Planning Benefits Insurances Attorney-Legal Issues
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Time Line-Live!!!
Practice Tone: – The tone of the practice comes from the Endodontist – The goal for any business is to allow the staff to take ownership. They need to know that they are being heard, that they are taking an active role in the success of the practice. 56
Time Line-Live!!!
Practice Tone: – The person who answers the phone makes the first impression to patients and referrals. – That person’s skills are crucial for bringing patients in and keeping referrals for new patients. – Enunciated words and the speed of speech connotes the emotion. A smile over the phone can be heard.
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What can you expect! Year Avg. Income 1992 $171,570 2005 $345,760*
Gross Billing
Overhead
$723,000 (97%)
~50%
*An increase of over 90%
ADA survey All independent Endodontists in Private Practice
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What can you expect!
Solo Endodontist (Fulltime)
Average Age Avg. # of Hrs Avg. # of Pt. Hrs # of Ops Internet Access/PMS Electronic/Paper Claims
45 (91%M) 47/wk 34/wk ~3 80% 40/60% 59
What can you expect! Office/ Patient Characteristics
Avg. Commute Avg. Sq. Ft. # of Patients Pt. Age Insurance/private payment Length of Appt.
30 min 1650 38/wk 34-59 72/27% 66 min 60
Our Office
Overhead Expenses 6010 · Advertising 6030 · Auto Expense 6060 · Bank Charges 6130 · Charity Contributions 6145 · Dental Supplies 6150 · Depreciation Expense 6170 · Dues and Subscriptions 6185 · 401k-Match 6190 · Insurance 6194 · Health Insurance 6192 · Malpractice Insurance Total 6190 · Insurance
0.2% 1.3% 0.4% 0.2% 3.0% 4.3% 0.3% 4.4% 0.7% 0.2% 0.8% 61
Our Office 6195 · Internet Access 6200 · Interest Expense 6220 · Laundry and Uniforms 6230 · Legal and Accounting 6240 · Meals & Entertainment 6280 · Miscellaneous 6290 · Office Expense 6295 · Patient Refund 6310 · Pension/Profit Sharing 6320 · Postage and Delivery 6340 · Professional Fees 6360 · Repairs & Maintenance 6370 · Rent
0.1% 0.0% 0.0% 0.2% 0.2% 0.1% 0.8% 0.9% 0.1% 0.0% 0.0% 0.2% 2.9%
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Our Office 6380 · Taxes & Licenses 6400 · Taxes - Single Business Tax 6410 · Telephone & Paging Expense 6420 · Travel 6430 · Utilities Total 6000 · Other Operating Expenses 6560 · Payroll Taxes 6575 · SUTA 6570 · FUTA 6565 · SS/MED 6560 · Payroll Taxes - Other Total 6560 · Payroll Taxes 7012 · Hourly - Office Total Expense
0.0% 0.4% 0.2% 0.2% 0.1% 21.4%
0.1% 0.0% 1.8% 0.1% 2.1% 4.9% 29.4% 31% 31.2% 28.1% 2005 2006 2007 2008 63
Business Plan Preparing financial Statements
ge.proposal.xls
Business plan.doc
PERSONAL FINANCIAL STATEMENT.doc
Business+Plan+Template.doc
Cash_Flow_Worksheet.xls 64
Retirement Plans
American funds retirement comparison.pdf
The (i) Solution - 2007 Comparison of Plan Contributions Summary.pdf
small business brochure.pdf
Baker Group
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Retirement Plans 457 Plans
The maximum contribution limit for 457 plans remains at $15,500 in 2008.
IRA Plans
The contribution limit for Traditional and Roth IRAs increases to to $5,000 in 2008. However, if you are age 50 or older, you are eligible to contribute contribute an additional $1,000 for a total of $6,000.
401(a) Plans
The total contribution limit for 401(a) Defined Contribution plans plans under section 415(c)(1)(A) increased to $46,000 in 2008.
401(k) Plans
The annual elective deferral limit for 401(k) plans remains at $15,500 in 2008.
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Retirement Plans Individual Retirement Annuity
2009 Limitation*
Maximum Annual Contribution
$ 5,000
Maximum Annual Contribution (age 50 or over)
$ 6,000
* Above limitations assume married filing jointly with a Modified Adjusted Gross Income is $166,000 or less 67
Retirement Plans Employer Sponsored Plans
401(k) Profit Sharing Plan
2009 Limitation
401(k) Maximum Participant Elective Deferral
100% of participants total pay or $16,500 whichever is less
401(k)Catch-up Contribution (age 50 or over)
$ 5,500
Maximum allocation to a participants account
100% of Participant's total pay or $49,000 whicher is less
Maximum allocation to a participants account if over age 50 and contribute elective deferrals
100% of Participant's total pay or $54,500 whicher is less
Maximum contribution (employers and participants) that the employer can deduct
25% of total eligible payroll up to $245,000 of comp. per participant for 2009
Example: Plan with owner, age 50, as only eligible participant earning $130,000 per year can contribute a total of $54,500. This total includes $22,000 ($15,500 deferral + $5,500 catch-up) and 68 a profit sharing contribution of $32,500 ($130,000 x 25% deduction limit)
Retirement Plans The matching contributions made your employer are NOT counted toward your 401k contribution limits.
Defined Benefit Plan may allow you to contribute over $100,000 additional to your savings
Even if you contribute the maximum amount each year, your employer's matching contributions are in addition to these 401k limits. Defined Benefit
2009 Limitation
Annual Benefit Limit
$ 195,000
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Reception
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Operatory
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Sterilization
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Tray Set Up
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Rear Delivery Cart
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Thank You!!
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Questions
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Questions
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dkinra@gmail.com
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