Whether you are looking to join an existing practice or establish a new one, it’s often helpful to create a practice option report. A practice option report is a written document that outlines your goals in both quantitative and qualitative terms. The qualitative portion of the practice option report should consider your goals and practice objectives in terms of factors that may include:
- Desired patient demographics.
- Preferred payment methods.
- Geographic location of both home and practice.
- Means of practice entry.
- Practice philosophy.
- Commitment to education in the areas of dentistry and business.
- Practice characteristics (size, revenue, work hours, etc.).
- Desired community involvement.
- Personal and family objectives.
- Opportunities that are available at the time.
Similarly, the quantitative portion of the practice option report should assess your various practice options against factors such as:
- Revenue and collections.
- Total operational costs.
- Equipment replacement and space remodeling.
- Debt repayment, both practice and personal.
- Owner versus associate compensation.
- Retirement plan costs.
- Personal expenses.
- Cash reserve.
- Net income.
Like any formal business plan, a practice option report should be considered seriously and may take substantial time and effort to complete. Once completed, however, it will provide you with a reference point to help you assess your progress toward goals and objectives. You can also keep it updated to serve as a framework for your ongoing strategic planning.
A new downloadable e-book, “Joining and Leaving the Dental Practice (3rd ed.),” by William P. Prescott, Esq., EMBA, is available for free from the ADA Center for Professional Success. It includes detailed information on creating practice option reports, as well as other important business, legal and tax planning issues of practice entry and succession.
No matter what career path you choose, planning ahead and knowing the right questions to ask will pay off in the long run.