- February 2013
- Posted By Debbie Ellard
- 0 Comments
Creating Your Business Plan
Many businesses are launched before creating a business plan but probably none more so than dental practices. Dental practices are like bicycles, if they’re not headed in a particular direction they fall over.
For most, we received a piece of paper giving us permission to work and ask a financial institution for money and we were told to follow the Yellow Brick Road. What road?
Prior to graduation, the institution we attended dictated our map. That was our business plan! Turns out having a road map is an easy thing to do and helps make sure you arrive at a predetermined destination. That’s part of the plan. Where do you wish to end up? Or in ‘business plan speak’, what will be your exit strategy?
The closer you get to retirement the more important this becomes. Unfortunately, without a map you may be way off track. So get started with something really simple or get someone to help you. There are lots of great ideas out there but I would say,
- Get going AND
- KEEP IT SUPER SIMPLE
You can always increase the information and define the direction as you go.
There are basics, but most BP’s are written for representing the business for the purpose of securing new financing. For us, while this could become important if your plans include a new office in the future, you business plan is critically important to keeping the practice on track and charting your course.
Typical plans include the following
1. Executive Summary- Write down general statements here to the degree you wish. For a start they should touch on:
- Mission Statement – What do you do and for who? One paragraph at most
- Company Information – Who are you? When did you start? How did you start? How many staff? How long have you been in business?
- Growth Highlights – How have you grown since your inception? New office? Added capabilities such as implants or post graduate programs you have completed.
- Your Products/Services – Briefly describe the products or services you provide.
- Financial Information –general discussion of where you have been where you are what your forecast indicates
- Summarize future plans – Explain where you would like to take your business.
2. Company Description-Who are you? Describe your business and what you do.
3. Market Analysis-What does the business climate look like to you. Part of this exercise is for internal only. I believe this is where you begin to flesh out your NEED.
4. Management and Organization- Who runs your practice and how? What tools do you use to do this and track it? See what I mean? Who’s helping you execute your plan? I typically hear – NO ONE!
5. Services – What do you provide/ You might note your strong points.
6. Marketing How do people know you exist? What is your strategy?
7. Financial projections- In many of the available plans the financials are annual. This makes staying on course an annual event. Unacceptable for us.
EM2 will track your financial data monthly and even biweekly with a budget overview. Our software will note any variance and suggest corrective action.
I’ll provide a monthly Template which makes tracking easy and which can be customized in Quickbooks.
8. Need for Capital- Do you have a big expansion coming up that will require capital? Is your growth such that your working capital requirement is and has been positive for a couple months? Some growth is not sustainable and therefore it may not be wise to always maximize. When this happens the business becomes cash starved. More about Working Capital Requirement later.
9. Exit Strategy- How do you intend to “phase out or ‘jump out? Like I mentioned, if you plan this out, you’ll be in great shape to execute the plan when the day arrives. I’ve spoken with many who, at a particular age say,
”I want to do this or that in 2 years.”
When we look at the likelihood of doing “that”, it’s not possible, in their time frame. Maybe 5 -7 years or maybe never! Not a great place to end up. Plan NOW.