Dental Practice Construction: What You Need to Consider

Why Machias Dental Decided to Take the Plunge and Build a New Dental Facility

Last week I began the story of Machias Dental, a practice in rural Maine. Dr. James Sparaga and his wife, Kathy, are currently building a brand-new dental facility. With 7 operatories, 5000 square feet, and all the hottest technology, the new building promises to attract both patients and dental associates.

Machias Dental
Proposed plans for the new Machias Dental
[click to enlarge]

But before the Sparagas began construction, they took a long, hard look at the bottom line. I asked Kathy Sparaga about the process. (She is a registered dental hygienist and a certified dental assistant who now manages the dental practice’s administration.)

Will the new facility require an associate?

“Though we’re planning to bring in an associate, it’s not actually necessary in order for us to afford the new building. In fact, one of my requirements before our taking on this project was to be certain that we could handle the debt service if we didn’t attract an associate. In our rural area, I knew that it potentially could take years for us to find an associate dentist. I didn’t want us to sink financially because we only had one dentist staffing a two-dentist facility.”

How much will you need to increase production in order to afford the new building?

“Our accountant crunched the numbers, and he determined that we needed only a 5% increase in production to afford the building and to keep our personal income at the same level. We and the team were certain that the increase in production would be easy to do.

“I had our accountant figure the worst case scenario: no increase in production. He reported that we would have a $1,000 per year drop in our personal income with that scenario. As you can imagine, we didn’t think that that would crimp our lifestyle too much for the tradeoff of a new office.”

What was the problem with your existing facility?

“In our current building, we often turn away new emergency patients just because we don’t have a room or chair in which to seat the person. Our team is trained and ready to facilitate care for the emergency patient, but unless we put a folding chair in the employee lounge or the garage, we can’t bring in the new patient. Just by giving Dr. Sparaga a fifth dental chair and the team’s support, everyone felt certain that a 5% production increase was achievable.

“We even considered renovating our current building, but three dental equipment companies essentially said ‘Forget it.'”

Tell me about associate dentists and any other options you may have considered.

“While it wasn’t necessary for us to have an associate to build the new office, it was necessary for us to have a new office in order to bring in an associate. There is absolutely no room for us to add another dentist at our present location. From our point of view, an associate is key to our being able to eventually cut back on the number of days that my husband practices dentistry and is a big part of our retirement plan.

“Before we committed to the new building, we investigated ‘time sharing’ the current space with another dentist: extending hours, working Saturdays, etc. We decided that in our rural community, people would not book a dental appointment much later than 6:00 pm. (We tried later hours once, but the no-show and cancellation rate for the 7:00 pm appointment was high, especially during the snowy winter months.) Several dentists in our area tried offering Saturday appointments, but found that the cancellation and no-show rate was so bad that they actually lost money being open that day! Given the limited number of hours that we believed our community would accept dental appointments, we realized that our personal financial goals would not allow us to cut back our schedule enough in our existing 4-chair facility to give an associate enough hours to meet his or her financial goals.”

Any advice for other dentists considering construction?

“We didn’t go into the construction project without doing our research. There is definitely some work involved in providing one’s accountant with the information needed to prepare a financial projection, but it’s essential for peace of mind. There are going to be some sleepless nights once construction begins when you wonder if you’ve lost your mind. Being able to look at a black and white report that says you are making the right move is well worth the effort. Besides, if a dentist does decide to build a new office, the lender is going to require those financial projections anyway.”

Want to learn more about the Sparagas’ project? Stay tuned for weekly construction updates!

Do you have a dental practice story you’d like to share with The Wealthy Dentist? Submit your project for review

About Jim Du Molin

+Jim Du Molin is a leading Internet marketing expert for dentists in North America. He has helped hundreds of doctors make more money in their practices using his proven Internet marketing techniques.

Disclaimer

© 2017, The Wealthy Dentist - Dental Marketing - All Rights Reserved - Dental Website Marketing Site Map

The Wealthy Dentist® - Contact by email - Privacy Policy

P.O. Box 1220, Tiburon, CA 94920

The material on this website is offered in conjunction with MasterPlan Alliance.

Copyright 2017 Du Molin & Du Molin, Inc. All rights reserved. If you would like to use material from this site, our reports, articles, training programs
or tutorials for use in any printed or electronic media, please ask permission first by email.