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Dental Office Business Plan

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Dental Office Business Plan The Tooth Fairy Executive Summary The Tooth Fairy is the dentistry practice of Steve Extractor. The Tooth Fairy will offer general and cosmetic dentistry to the citizens of Eugene, Oregon. Through a combination of industry benchmark customer service and flexibility, The Tooth Fairy will quickly gain market share. Steve will leverage the years he spent in private practice to model his new business. His past experience in conjunction with his forward-looking customer-centric business model will allow him to rapidly grow a large and loyal patient base.

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Profitability will be reached by month 10, and sales will reach comfortable levels by the end of year two. 1. 1 Objectives The objectives for the first years of operation include: •To create a start-up organization from an already existing practice whose primary goal is to exceed customer’s expectations. •To increase the number of clients by 20% per year through superior performance and word-of-mouth referrals. •To form a dentistry practice that is able to eventually survive off its own cash flow.

1. 2 Mission The Tooth Fairy’s mission is to provide the finest dental care. We exist to attract and maintain customers.

When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers. 1. 3 Keys to Success The key to success is to meet the market need and exceed customer’s expectations. Company Summary The Tooth Fairy, to be located in Eugene, OR, will offer both general dentistry as well as cosmetic dentistry. General dentistry consists of primarily of cleaning and fillings, while cosmetic dentistry consists of teeth whitening, veneers, and gap removal. The Tooth Fairy is forecasted to reach profitability by month 10 and have respectable third year profits. 2. Company Ownership The Tooth Fairy is an Oregon limited liability corporation owned by Steve Extractor. 2. 2 Start-up Summary The following are the required start-up costs: The purchase of Dan Jokerdoc D. D. S. ‘ private practice. The purchase includes the patient list, office space, front chair and desk, two dental chairs, two light systems, fully-equiped sterilization room, compression air system with a suction unit, x-ray unit, mirrors, and a phone system. This practice has been valued by the following variables: equipment, office space already built for a dentist, goodwill, and future revenue streams.

The equipment has been valued at $30,000, $15,000 for tenant improvements on the office space, the patient list at $5,000 and $25,000 for future profitability. The entire practice was sold for $65,000 because Dr. Jokerdoc was in need of quick cash. Statistical studies have shown that patients that are made comfortable are likely to stay with the new doctor when a practice is sold. This will help with cash flow, minimizing the amount of start-up cash. The bulk of the equipment needed will procured through the purchase of the practice, however, there is a lot of equipment that will be needed to be purchased separately.

The following list details what else will be needed. •Front desk equipment including a Xerox machine, fax machine, a computer terminal with Microsoft office, QuickBooks Pro, laser printer and a CD-RW. •Disposables which include: assorted trays and explorers, x-ray film, filling material, paper products, and impression material. •Placing instrument. •Curing instrument. •Ultrasonic scaler (for removal of prophylaxis). •High- and low-speed drills (enough for two operators). Please note that all items that are to be used for more than a year will be classified as long-term capital assets and will be depreciated using the G.

A. A. P approved straight-line method of depreciation. Start-up Requirements Start-up Expenses Legal$1,000 Stationery etc. $100 Existing Practice (the portion that is not a capital asset$20,000 Remodeling of office$10,000 Insurance$0 Rent$0 Research and Development$0 Expensed Equipment$0 Other$0 Total Start-up Expenses$31,100 Start-up Assets Cash Required$68,100 Other Current Assets$0 Long-term Assets$51,800 Total Assets$119,900 Total Requirements$151,000 Start-up Funding Start-up Expenses to Fund$31,100 Start-up Assets to Fund$119,900 Total Funding Required$151,000 Assets

Non-cash Assets from Start-up$51,800 Cash Requirements from Start-up$68,100 Additional Cash Raised$0 Cash Balance on Starting Date$68,100 Total Assets$119,900 Liabilities and Capital Liabilities Current Borrowing$0 Long-term Liabilities$100,000 Accounts Payable (Outstanding Bills)$0 Other Current Liabilities (interest-free)$0 Total Liabilities$100,000 Capital Planned Investment Steve$51,000 Other$0 Other$0 Additional Investment Requirement$0 Total Planned Investment$51,000 Loss at Start-up (Start-up Expenses)($31,100) Total Capital$19,900 Total Capital and Liabilities$119,900 Total Funding $151,000

Services The Tooth Fairy provides both general improvements consisting primarily of cleaning and fillings, as well as cosmetics improvements. The cost for cleanings are around $100, not including x-rays. The cost for fillings ranges significantly depending on the material used. Dr. Extractor will be deriving the majority of revenue from cosmetics by the end of the year. Cosmetics can be classified into three main areas: •Teeth whitening. There are many different ways a tooth can be stained, common causes are age, antibiotics, excess fluoride, illness, and certain beverage consumption.

Teeth whitening removes the discoloration and restores the original whiteness. Dr. Extractor is currently using a state-of-art home treatment. The home treatment begins with a casting of the patient’s teeth made from an impression taken at the office. A bleaching tray is made from this impression and the Dr. then provides the patient with all the necessary instructions and material to accomplish the whitening at home. Costs are around $300. •Veneers. These are porcelain shells that are bonded to the front of the teeth. They reshape the tooth and make the tooth whiter in color.

The costs of veneers range from $600-800 per tooth. •Gap removal. This procedure uses tooth-colored plastic that is bonded to places where there should be tooth material. The removal of gaps makes a significant improvement to a smile. The cost for gap removal ranges from $300-$1,000. The Tooth Fairy will be billing customers at a per procedure rate. Only a portion of the cosmetics will be billed to an insurance company, the bulk will be paid by the individual. Market Analysis Summary While people of all ages require a general dentist, Dr. Extractor will be concentrating his practice on cosmetic improvements.

There are two distinct groups of people who use cosmetic dentistry. The first group is young adults, a group of people that are concerned with their appearance. The second group is seniors, equally concerned with their appearance, but for reasons, typically economic, have not had the ability to get the work done before. 4. 1 Market Segmentation The Tooth Fairy has two distinct groups of customers: •Adults. Younger adults, typically 27-39 who are concerned with their appearance. This group can be further defined as both male and female with individual incomes over $45,000 a year.

While some of the target group are professionals, a large segment of this target segment are-live-at-home spouses who do not have a full time job. This group is more likely than not to consider cosmetic surgery as a method from improving their appearance. •Seniors. This group sees dental work as a safe way to improve they way they look. They prefer cosmetic dentistry over plastic surgery, which is viewed as a risky cosmetic surgery that this group is less likely to use. The seniors typically live off of more than $50,000 a year in retirement savings.

This group is almost entirely retired and their day is mainly composed of leisure time activities. Market Analysis Year 1Year 2Year 3Year 4Year 5 Potential CustomersGrowthCAGR Adults9% 18,774 20,464 22,306 24,314 26,502 9. 00% Seniors8% 17,321 18,707 20,204 21,820 23,566 8. 00% Total8. 52% 36,095 39,171 42,510 46,134 50,068 8. 52% 4. 2 Target Market Segment Strategy The Tooth Fairy will target two different segments with specific strategies in the marketing campaign. While the Yellow Page advertisements will develop visibility among both groups, the seminars will be specifically directed toward the “seniors. ” 4. Service Business Analysis The dentist industry is following a trend away from general maintenance toward cosmetics. There is less rampant decay of teeth now relative to five to 10 years ago so dentists are concentrating on areas where there is increased demand. Please note that The Tooth Fairly’s growth rate is higher than the industry average. This can be explained by the fact that Steve is concentrating on an emerging niche, and as he is starting a practice from ground zero, so higher than average growth rates can be expected. 4. 3. 1 Competition and Buying Patterns There are two forms of competitors: •The generalist.

This type of dentist has a practice centered around general maintenance and does not specialize. •The specialist. This type of dentist will have a general practice, but in addition to the general practice, they have an area that they specialize in, such as cosmetics. The buying patterns of patients are based on referrals and trust. People will chose a dentist preferably based on a referral if that is possible. People new to an area may be unable to get a referral so they find a service provider based on advertising or the Yellow Pages and if they feel comfortable with the provider then they tend to form a long-term relationship with them.

Strategy and Implementation Summary The marketing strategy will utilize three different methods to generate visibility for The Tooth Fairy’s practice. The sales strategy will be based on educating the consumer so that their decision is an informed one. By educating the prospective patient, you are empowering them to make the decision rationally by themselves, making them feel comfortable with their choice. 5. 1 Competitive Edge The Tooth Fairy will leverage their two competitive edges to generate market share. •Customer service. The Tooth Fairy’s entire practice is based on a customer centric service model.

This business model is particularly emphasized when Dr. Extractor is working with patients. The Dr. believes that the patient must make an informed decision regarding their cosmetic needs. The Dr. will take significant time detailing what occurs during the procedure, any side effects the patient may notice, as well as the success/failure rate. Only after the patient has been educated regarding the procedure will the Dr. allow the patient to go forward with the procedure. •Flexibility. The Dr. recognizes that his patients have busy schedules so he has tailored his practice around being flexible to meet the customers needs.

This is an extension to their competitive advantage of customer service, however, the Dr. ‘s concentration on flexibility is worth noting separately. The Dr. does not have set office hours in which to schedule appointments within. He is willing to schedule an appointment at whatever time is needed, including nights or weekends. 5. 2 Marketing Strategy The marketing strategy will be based on developing visibility among prospective patients. The first aspect of the marketing campaign is a large advertisement in the Yellow Pages which briefly lists the different procedures that the Dr. offers, as well as his flexibility.

Another method to increase visibility will be free informational seminars that the Dr. will offer, typically through community organizations. These seminars are an event where people can go and get more information concerning cosmetics as well as get a free individual consultation. The seminars will be especially attractive to seniors who have more free time, as well as typically take advantage of free informational seminars. The third marketing strategy will employ networking through the various organizations that the Dr. is a member of including his church, the Lyons club, the Rotary club, as well as the country club.

As a visible, active member of these organizations, the Dr. will leverage his personal relationships to generate interest in his services. 5. 3 Sales Strategy The sales strategy is based on educating the consumer as much as possible so that they are asking for the service instead of the Dr. trying to convince them they should have the procedure done. This method is quite effective because it allows the consumer to feel that they arrived at the decision themselves instead of them agreeing to a sales pitch. When a patient comes in to see the doctor, there is no charge for the initial consultation.

During this consultation, the Dr. will educate the customer on the different procedures and then analyze the patient’s particular needs. The patient is then free to ask any questions they have. After the customer is fully knowledgeable about all the different variables that will effect their procedure, they are then allowed to make a decision as to whether to have any work done. This sales strategy is geared toward turning prospective customers into long-term customers who are then quite vocal to their friends about the pleasant experiences they had with The Tooth Fairy. 5. 3. 1 Sales Forecast

The first month will be used to get the new office in order, set up appointments and begin marketing activities. Month two will see a few appointments, primarily from the prior practice. Months five through seven will see a jump in cosmetic appointments. After month seven, there should be a steady increase in sales activity. Sales Forecast Year 1Year 2Year 3 Sales General dentistry$58,551 $82,343 $97,656 Cosmetics$118,321 $267,545 $312,912 Total Sales$176,872 $349,888 $410,568 Direct Cost of SalesYear 1Year 2Year 3 General dentistry$35,131 $49,406 $58,594 Cosmetics$22,481 $50,834 $59,453

Subtotal Direct Cost of Sales$57,612 $100,239 $118,047 5. 4 Milestones The Tooth Fairy will have several milestones early on: •Business plan completion. •Office set-up. •The 20th cosmetic procedure. •Profitability. Milestones MilestoneStart DateEnd DateBudgetManagerDepartment Business plan completion1/1/20012/1/2001$0 SteveSteve Office set-up1/1/20012/1/2001$0 SteveSteve The 20th cosmetic procedure1/1/20013/1/2001$0 SteveSteve Profitability1/1/200111/1/2001$0 SteveEveryone Totals Management Summary Steve Extractor got his undergraduate degree in biology from Case Western Reserve.

While at Case, Steve knew he wanted to practice health care but was unsure of exactly what. Toward the end of his years at Case, Steve discovered his interest in dentistry. Several years later Steve became a graduate of The Ohio State University College of Dentistry. Steve knew that he did not want to live in Ohio for the rest of his life so he immediately upon graduating moved out to Oregon, a state that he was always fond of due to its natural beauty. The first four months were difficult to make contacts and find a job, but Steve eventually landed a job in an eight person firm doing general dentistry.

This was a good environment for Steve because it allowed him to use his colleagues as mentors to grow his skill sets. Steve spent five years practicing general dentistry, and by this time, Steve was no longer developing professionally so he decided to learn new cosmetic techniques. While still practicing, Steve began to shadow his colleagues learning cosmetic techniques. After four months of the shadowing, Steve began to see clients for cosmetic procedures and was quite proficient. At this point friction within the practice began to surface as the other Drs. egan to feel threatened by Steve’s new skills and thought that his success would be at the expense of their profits. It was then that Steve decided that his best career move would be to open up his own practice, allowing him the freedom to manage it himself. He began by looking for already established practices which would allow him to open his practice quicker because all the equipment was set up and ready to go. In order to save money when purchasing an existing practice, Steve decided to look for practices that did not have a large list of patients. After several months of looking, Steve found a Dr. ho was retiring with a small list of patients and went into negotiations for the practice. After three weeks, the deal was sealed. 6. 1 Personnel Plan In addition to Steve, a hygienist, a dental assistant and a front desk person will be hired during month two. Personnel Plan Year 1Year 2Year 3 Steve$48,000 $60,000 $80,000 Hygienist$27,500 $30,000 $32,000 Assistant$24,200 $26,400 $28,000 Front desk person$22,000 $24,000 $26,000 Total People44 4 Total Payroll$121,700 $140,400 $166,000 Financial Plan The following sections will outline important financial information. 7. 1 Important Assumptions

The following table details important financial assumptions. General Assumptions Year 1Year 2Year 3 Plan Month123 Current Interest Rate10. 00% 10. 00% 10. 00% Long-term Interest Rate10. 00% 10. 00% 10. 00% Tax Rate30. 00% 30. 00% 30. 00% Other0 0 0 7. 2 Break-even Analysis The Break-even Analysis indicates what will be needed in monthly revenue to reach the break-even point. Break-even Analysis Monthly Revenue Break-even$22,025 Assumptions: Average Percent Variable Cost33% Estimated Monthly Fixed Cost$14,851 7. 3 Projected Profit and Loss The following table will indicate projected profit and loss.

Pro Forma Profit and Loss Year 1Year 2Year 3 Sales$176,872 $349,888 $410,568 Direct Cost of Sales$57,612 $100,239 $118,047 Other Production Expenses$0 $0 $0 Total Cost of Sales$57,612 $100,239 $118,047 Gross Margin$119,260 $249,649 $292,521 Gross Margin %67. 43% 71. 35% 71. 25% Expenses Payroll$121,700 $140,400 $166,000 Sales and Marketing and Other Expenses$2,700 $2,700 $2,700 Depreciation$10,356 $863 $863 ADA dues$600 $600 $600 Utilities$1,800 $1,800 $1,800 Insurance- office and malpractice$4,800 $4,800 $4,800 Rent$18,000 $18,000 $18,000 Payroll Taxes$18,255 $21,060 $24,900 Other$0 $0 $0

Total Operating Expenses$178,211 $190,223 $219,663 Profit Before Interest and Taxes($58,951)$59,426 $72,858 EBITDA($48,595)$60,289 $73,721 Interest Expense$9,670 $9,053 $8,362 Taxes Incurred$0 $15,112 $19,349 Net Profit($68,621)$35,261 $45,147 Net Profit/Sales-38. 80% 10. 08% 11. 00% 7. 4 Projected Cash Flow The following chart and table will indicate projected cash flow. Pro Forma Cash Flow Year 1Year 2Year 3 Cash Received Cash from Operations Cash Sales$176,872 $349,888 $410,568 Subtotal Cash from Operations$176,872 $349,888 $410,568 Additional Cash Received Sales Tax, VAT, HST/GST Received$0 $0 $0

New Current Borrowing$0 $0 $0 New Other Liabilities (interest-free)$0 $0 $0 New Long-term Liabilities$0 $0 $0 Sales of Other Current Assets$0 $0 $0 Sales of Long-term Assets$0 $0 $0 New Investment Received$0 $0 $0 Subtotal Cash Received$176,872 $349,888 $410,568 ExpendituresYear 1Year 2Year 3 Expenditures from Operations Cash Spending$121,700 $140,400 $166,000 Bill Payments$100,579 $171,973 $196,487 Subtotal Spent on Operations$222,279 $312,373 $362,487 Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out$0 $0 $0 Principal Repayment of Current Borrowing$0 $0 $0 Other Liabilities Principal Repayment$0 $0 $0

Long-term Liabilities Principal Repayment$6,185 $6,576 $7,232 Purchase Other Current Assets$0 $0 $0 Purchase Long-term Assets$0 $0 $0 Dividends$0 $0 $0 Subtotal Cash Spent$228,464 $318,949 $369,719 Net Cash Flow($51,592)$30,939 $40,849 Cash Balance$16,508 $47,447 $88,296 7. 5 Projected Balance Sheet The following table will indicate the projected balance sheet. Pro Forma Balance Sheet Year 1Year 2Year 3 Assets Current Assets Cash$16,508 $47,447 $88,296 Other Current Assets$0 $0 $0 Total Current Assets$16,508 $47,447 $88,296 Long-term Assets Long-term Assets$51,800 $51,800 $51,800

Accumulated Depreciation$10,356 $11,219 $12,082 Total Long-term Assets$41,444 $40,581 $39,718 Total Assets$57,952 $88,028 $128,014 Liabilities and CapitalYear 1Year 2Year 3 Current Liabilities Accounts Payable$12,858 $14,249 $16,320 Current Borrowing$0 $0 $0 Other Current Liabilities$0 $0 $0 Subtotal Current Liabilities$12,858 $14,249 $16,320 Long-term Liabilities$93,815 $87,239 $80,007 Total Liabilities$106,672 $101,488 $96,327 Paid-in Capital$51,000 $51,000 $51,000 Retained Earnings($31,100)($99,721)($64,460) Earnings($68,621)$35,261 $45,147 Total Capital($48,721)($13,460)$31,688

Total Liabilities and Capital$57,952 $88,028 $128,014 Net Worth($48,721)($13,460)$31,688 7. 6 Business Ratios Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 8021, Offices of Dentists, are shown for comparison. Ratio Analysis Year 1Year 2Year 3Industry Profile Sales Growth0. 00% 97. 82% 17. 34% 6. 10% Percent of Total Assets Other Current Assets0. 00% 0. 00% 0. 00% 45. 00% Total Current Assets28. 49% 53. 90% 68. 97% 62. 20% Long-term Assets71. 51% 46. 10% 31. 03% 37. 80% Total Assets100. 00% 100. 00% 100. 0% 100. 00% Current Liabilities22. 19% 16. 19% 12. 75% 30. 10% Long-term Liabilities161. 88% 99. 10% 62. 50% 30. 10% Total Liabilities184. 07% 115. 29% 75. 25% 60. 20% Net Worth-84. 07% -15. 29% 24. 75% 39. 80% Percent of Sales Sales100. 00% 100. 00% 100. 00% 100. 00% Gross Margin67. 43% 71. 35% 71. 25% 0. 00% Selling, General & Administrative Expenses106. 22% 61. 27% 60. 25% 68. 30% Advertising Expenses1. 36% 0. 69% 0. 58% 1. 60% Profit Before Interest and Taxes-33. 33% 16. 98% 17. 75% 3. 40% Main Ratios Current1. 28 3. 33 5. 41 2. 11 Quick1. 28 3. 33 5. 41 1. 70 Total Debt to Total Assets184. 07% 115. 9% 75. 25% 60. 20% Pre-tax Return on Net Worth140. 85% -374. 25% 203. 54% 10. 00% Pre-tax Return on Assets-118. 41% 57. 22% 50. 38% 25. 20% Additional RatiosYear 1Year 2Year 3 Net Profit Margin-38. 80% 10. 08% 11. 00% n. a Return on Equity0. 00% 0. 00% 142. 48% n. a Activity Ratios Accounts Payable Turnover8. 82 12. 17 12. 17 n. a Payment Days27 29 28 n. a Total Asset Turnover3. 05 3. 97 3. 21 n. a Debt Ratios Debt to Net Worth0. 00 0. 00 3. 04 n. a Current Liab. to Liab. 0. 12 0. 14 0. 17 n. a Liquidity Ratios Net Working Capital$3,650 $33,198 $71,976 n. a Interest Coverage-6. 10 6. 56 8. 71 n. a

Additional Ratios Assets to Sales0. 33 0. 25 0. 31 n. a Current Debt/Total Assets22% 16% 13% n. a Acid Test 1. 28 3. 33 5. 41 n. a Sales/Net Worth0. 00 0. 00 12. 96 n. a Dividend Payout0. 00 0. 00 0. 00 n. a Appendix Sales Forecast Month 1Month 2Month 3Month 4Month 5Month 6Month 7Month 8Month 9Month 10Month 11Month 12 Sales General dentistry0%$0 $3,500 $3,800 $4,454 $5,142 $5,334 $5,565 $5,645 $6,001 $6,224 $6,343 $6,543 Cosmetics0%$0 $0 $0 $4,500 $5,232 $8,876 $9,876 $11,746 $14,545 $17,656 $21,345 $24,545 Total Sales$0 $3,500 $3,800 $8,954 $10,374 $14,210 $15,441 $17,391 $20,546 $23,880 $27,688 $31,088

Direct Cost of SalesMonth 1Month 2Month 3Month 4Month 5Month 6Month 7Month 8Month 9Month 10Month 11Month 12 General dentistry$0 $2,100 $2,280 $2,672 $3,085 $3,200 $3,339 $3,387 $3,601 $3,734 $3,806 $3,926 Cosmetics$0 $0 $0 $855 $994 $1,686 $1,876 $2,232 $2,764 $3,355 $4,056 $4,664 Subtotal Direct Cost of Sales$0 $2,100 $2,280 $3,527 $4,079 $4,887 $5,215 $5,619 $6,364 $7,089 $7,861 $8,589 Personnel Plan

Month 1Month 2Month 3Month 4Month 5Month 6Month 7Month 8Month 9Month 10Month 11Month 12 Steve0%$4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 Hygienist0%$0 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 Assistant0%$0 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 $2,200 Front desk person0%$0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 Total People1 4 4 4 4 4 4 4 4 4 4 4

Total Payroll$4,000 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 General Assumptions Month 1Month 2Month 3Month 4Month 5Month 6Month 7Month 8Month 9Month 10Month 11Month 12 Plan Month123456789101112 Current Interest Rate10. 00% 10. 00% 10. 00% 10. 00% 10. 00% 10. 00% 10. 00% 10. 00% 10. 00% 10. 00% 10. 00% 10. 00% Long-term Interest Rate10. 00% 10. 00% 10. 00% 10. 00% 10. 00% 10. 00% 10. 00% 10. 00% 10. 00% 10. 00% 10. 00% 10. 00% Tax Rate30. 00% 30. 00% 30. 00% 30. 00% 30. 00% 30. 00% 30. 0% 30. 00% 30. 00% 30. 00% 30. 00% 30. 00% Other0 0 0 0 0 0 0 0 0 0 0 0 Pro Forma Profit and Loss Month 1Month 2Month 3Month 4Month 5Month 6Month 7Month 8Month 9Month 10Month 11Month 12 Sales$0 $3,500 $3,800 $8,954 $10,374 $14,210 $15,441 $17,391 $20,546 $23,880 $27,688 $31,088 Direct Cost of Sales$0 $2,100 $2,280 $3,527 $4,079 $4,887 $5,215 $5,619 $6,364 $7,089 $7,861 $8,589 Other Production Expenses$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Cost of Sales$0 $2,100 $2,280 $3,527 $4,079 $4,887 $5,215 $5,619 $6,364 $7,089 $7,861 $8,589

Gross Margin$0 $1,400 $1,520 $5,427 $6,295 $9,323 $10,226 $11,772 $14,182 $16,791 $19,827 $22,499 Gross Margin %0. 00% 40. 00% 40. 00% 60. 61% 60. 68% 65. 61% 66. 22% 67. 69% 69. 02% 70. 31% 71. 61% 72. 37% Expenses

Payroll$4,000 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 Sales and Marketing and Other Expenses$225 $225 $225 $225 $225 $225 $225 $225 $225 $225 $225 $225 Depreciation$863 $863 $863 $863 $863 $863 $863 $863 $863 $863 $863 $863 ADA dues$50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 Utilities$150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 Insurance- office and malpractice$400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 Rent$1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 Payroll Taxes15% $600 $1,605 $1,605 $1,605 $1,605 $1,605 $1,605 $1,605 $1,605 $1,605 $1,605 $1,605 Other$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses$7,788 $15,493 $15,493 $15,493 $15,493 $15,493 $15,493 $15,493 $15,493 $15,493 $15,493 $15,493 Profit Before Interest and Taxes($7,788)($14,093)($13,973)($10,066)($9,198)($6,170)($5,267)($3,721)($1,311)$1,298 $4,334 $7,006 EBITDA($6,925)($13,230)($13,110)($9,203)($8,335)($5,307)($4,404)($2,858)($448)$2,161 $5,197 $7,869 Interest Expense$829 $825 $821 $817 $812 $808 $804 $800 $795 $791 $786 $782 Taxes Incurred$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Net Profit($8,617)($14,918)($14,794)($10,883)($10,011)($6,978)($6,071)($4,520)($2,106)$507 $3,547 $6,224 Net Profit/Sales0. 00% -426. 23% -389. 31% -121. 54% -96. 50% -49. 11% -39. 32% -25. 99% -10. 25% 2. 12% 12. 81% 20. 02% Pro Forma Cash Flow

Month 1Month 2Month 3Month 4Month 5Month 6Month 7Month 8Month 9Month 10Month 11Month 12 Cash Received Cash from Operations Cash Sales$0 $3,500 $3,800 $8,954 $10,374 $14,210 $15,441 $17,391 $20,546 $23,880 $27,688 $31,088 Subtotal Cash from Operations$0 $3,500 $3,800 $8,954 $10,374 $14,210 $15,441 $17,391 $20,546 $23,880 $27,688 $31,088 Additional Cash Received Sales Tax, VAT, HST/GST Received0. 00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Current Borrowing$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Other Liabilities (interest-free)$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Long-term Liabilities$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Sales of Other Current Assets$0 $0 $0 $0 $0 $0 0 $0 $0 $0 $0 $0 Sales of Long-term Assets$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Investment Received$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Cash Received$0 $3,500 $3,800 $8,954 $10,374 $14,210 $15,441 $17,391 $20,546 $23,880 $27,688 $31,088 ExpendituresMonth 1Month 2Month 3Month 4Month 5Month 6Month 7Month 8Month 9Month 10Month 11Month 12 Expenditures from Operations Cash Spending$4,000 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 $10,700 Bill Payments$125 $3,858 $6,861 $7,072 $8,292 $8,849 $9,636 $9,963 $10,373 $11,113 $11,835 $12,602 Subtotal Spent on Operations$4,125 $14,558 $17,561 $17,772 $18,992 $19,549 $20,336 $20,663 $21,073 $21,813 $22,535 $23,302 Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Principal Repayment of Current Borrowing$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other Liabilities Principal Repayment$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Long-term Liabilities Principal Repayment$492 $496 $500 $505 $509 $513 $517 $522 $526 $530 $535 $539 Purchase Other Current Assets$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Purchase Long-term Assets$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Dividends$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Cash Spent$4,617 $15,054 $18,061 $18,277 $19,501 $20,062 $20,853 $21,184 $21,599 $22,344 $23,070 $23,841 Net Cash Flow($4,617)($11,554)($14,261)($9,323)($9,127)($5,852)($5,412)($3,793)($1,053)$1,536 $4,618 $7,247 Cash Balance$63,483 $51,929 $37,667 $28,344 $19,217 $13,365 $7,953 $4,160 $3,107 $4,643 $9,261 $16,508 Pro Forma Balance Sheet Month 1Month 2Month 3Month 4Month 5Month 6Month 7Month 8Month 9Month 10Month 11Month 12 AssetsStarting Balances Current Assets

Cash$68,100 $63,483 $51,929 $37,667 $28,344 $19,217 $13,365 $7,953 $4,160 $3,107 $4,643 $9,261 $16,508 Other Current Assets$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Current Assets$68,100 $63,483 $51,929 $37,667 $28,344 $19,217 $13,365 $7,953 $4,160 $3,107 $4,643 $9,261 $16,508 Long-term Assets Long-term Assets$51,800 $51,800 $51,800 $51,800 $51,800 $51,800 $51,800 $51,800 $51,800 $51,800 $51,800 $51,800 $51,800 Accumulated Depreciation$0 $863 $1,726 $2,589 $3,452 $4,315 $5,178 $6,041 $6,904 $7,767 $8,630 $9,493 $10,356 Total Long-term Assets$51,800 $50,937 $50,074 $49,211 $48,348 $47,485 $46,622 $45,759 $44,896 $44,033 $43,170 $42,307 $41,444 Total Assets$119,900 $114,420 $102,003 $86,878 $76,692 $66,702 $59,987 $53,712 $49,056 $47,140 $47,813 $51,568 $57,952

Liabilities and CapitalMonth 1Month 2Month 3Month 4Month 5Month 6Month 7Month 8Month 9Month 10Month 11Month 12 Current Liabilities Accounts Payable$0 $3,629 $6,627 $6,797 $7,998 $8,528 $9,304 $9,618 $10,003 $10,720 $11,416 $12,158 $12,858 Current Borrowing$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other Current Liabilities$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Current Liabilities$0 $3,629 $6,627 $6,797 $7,998 $8,528 $9,304 $9,618 $10,003 $10,720 $11,416 $12,158 $12,858 Long-term Liabilities$100,000 $99,508 $99,011 $98,511 $98,006 $97,497 $96,984 $96,467 $95,945 $95,419 $94,889 $94,354 $93,815 Total Liabilities$100,000 $103,137 $105,638 $105,307 $106,005 $106,025 $106,289 $106,085 $105,949 $106,139 $106,305 $106,512 $106,672

Cite this Dental Office Business Plan

Dental Office Business Plan. (2018, Jan 28). Retrieved from https://graduateway.com/dental-office-business-plan/

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