Business Plan - A General Dental Practice in

BUSINESS PLAN – A GENERAL DENTAL PRACTICE IN
SACRAMENTO, CALIFORNIA
A Project Presented to the Faculty

of
California State University, Stanislaus
In Partial Fulfillment
of the Requirements for the Degree
of Master of Business Administration
By
Nam Xuan Hoang
April 2020
CERTIFICATION OF APPROVAL
BUSINESS PLAN – A GENERAL DENTAL PRACTICE IN
SACRAMENTO, CALIFORNIA
by
Nam Hoang
Signed Certification of Approval page

is on file with the University Library
Dr. Xinmei Xie, Project Advisor Date

Associate Professor in Accounting
Ms. Katrina Kidd, Director Date

Graduate Business Programs
Dr. Tomas Gomez-Arias, Dean Date

College of Business Administration
© 2020
Nam Hoang
ALL RIGHTS RESERVED
DEDICATION
To my parents, siblings, and Tibi who have given me strength, motivation,
and unconditional love. Thank you for everything you have done for me and without
you, I would not be the individual I am today.
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ACKNOWLEDGEMENTS
It is an honor and privilege for me to acknowledge and thank Dr. Xinmei Xie
for her patience, support, and unwavering encouragement for me to finish my paper. I
also want to thank EMBA Director Katrina Kidd, Dean Gomez-Arias, all of the
EMBA professors, my friends, and colleagues from EMBA Cohort 14 for their
support through the program. I am extremely privileged, grateful, and thankful for the
opportunity of being part of the Stanislaus State’s family.
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TABLE OF CONTENTS
PAGE
Dedication ........................................................................................................... iv
Acknowledgements ............................................................................................. v
List of Tables ...................................................................................................... viii
List of Figures ..................................................................................................... ix
Abstract ............................................................................................................... x
CHAPTER
I. Company Description......................................................................... 1
Mission Statement .................................................................. 1

Vision..................................................................................... 1
Background ............................................................................ 2
Founder .................................................................................. 4
Location and Geographical Markets ....................................... 5
II. Products and Services ........................................................................ 8
Services Descriptions ............................................................. 8

Future Products and Services .................................................. 11
III. Marketing Plan................................................................................... 13
Market Analysis ..................................................................... 13

Market Strategy ...................................................................... 24
Market Forecast ...................................................................... 31
IV. Management and Organization ........................................................... 33
Future ..................................................................................... 34
V. Operational Plan ................................................................................ 36
Location and Business Hours .................................................. 36

Equipment and Technology .................................................... 36
Startup Expenses .................................................................... 38
Budget .................................................................................... 39
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VI. Financial Plan .................................................................................... 43
Break-Even Analysis .............................................................. 44

Financial Results .................................................................... 44
VII. Conclusion ........................................................................................ 54
References ........................................................................................................... 56
Appendices
A. Marketing Research ................................................................................. 62

B. Financial Highlights by Year ................................................................... 63
vii
LIST OF TABLES
TABLE PAGE
1. Average Cost and Price of Dental Care in Sacramento ................................... 17
2. Sales Forecast for 2021.................................................................................. 32
3. Start-Up Funding for Sacramento Dental Care ............................................... 39
4. Variable Ratio ............................................................................................... 40
5. Break-Even Analysis ..................................................................................... 44
6. Projected Balance Sheet................................................................................. 45
7. Pro Forma Income Statement ......................................................................... 47
8. Pro Forma Income Statement (Good Case Scenario: 20% More Revenue than
Forecasted) .................................................................................................... 48
9. Pro Forma Income Statement (Bad Case Scenario: 20% Less Revenue than
Forecasted) .................................................................................................... 49
10. Cash Budget .................................................................................................. 51
11. Projected Cash Budget (Good Case Scenario: 20% More Revenue than
Forecasted) .................................................................................................... 52
12. Projected Cash Budget (Bad Case Scenario: 20% Less Revenue than
Forecasted) .................................................................................................... 53
viii
LIST OF FIGURES
FIGURE PAGE
1. Statistics from Bright Local show consumers likely to read online

reviews before visiting a local business.......................................................... 26
2. Affordability, quality of care, and convenience are the most important

factors when patients are choosing health care services .................................. 29
3. Sample of a Dental Cone Beam Computed Tomography (CBCT) X-Ray ....... 37
4. Dental CBCT scanner .................................................................................... 37
5. 3-year net profit forecast in 2021-2023 .......................................................... 43
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ABSTRACT
Sacramento Dental Care is a self-owned business, acquired from an existing private
dental practice in Sacramento to serve patients of all ages, targeting primarily
communities within and surrounding the Sacramento area. Sacramento is a vibrant
city that is a tactical location for dental businesses and also because it is the capital of
California. The dental practice will provide a number of services, such as exams,
crowns, cleanings, dental bridges, implants, emergency dental services, root canals,
and tooth extractions including wisdom teeth and fillings. A business plan for this
dental office in Sacramento will show the path of an entrepreneur to a profitable
dental practice in providing the quality, honest, inexpensive, and professional service
every patient deserves.
x
CHAPTER I
COMPANY DESCRIPTION
Mission Statement
Sacramento Dental Care’s mission is to provide patients with the utmost
friendly, conscientious dental care and at the same time to be sustainable in the dental
market. Relationships with Sacramento Dental Care’s patients are built on reliability,
honesty, and wellbeing. Patients here will be provided with the most appropriate
dental treatment by experienced and educated staff, clean and modern facilities, and
the most cutting-edge technology. Patient focus is on informing patients so they can
make educated decisions regarding their dental treatment.
Besides dental needs, Sacramento Dental Care is here to give patients a
relaxing and comfortable experience while educating them to establish and maintain
optimal oral health. We want our services to exceed our patients’ expectations.
Vision
Our vision is to exceed the expectations of our patients, who are of all ages
and come from all walks of life. In doing so, we will provide quality dental care
balanced with satisfactory customer service. The office will be a modern and safe
environment where all care providers will practice as a group, communicate while
being transparent, and help one another to achieve the optimal care the patient
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deserves. Through public involvement and outreach, our office will be able to grow
and connect with the community.
Background
Why do people avoid going to the dentist? It is not surprising especially for
working adults to delay dental treatments due to lack of money persuading
themselves that they don’t need treatment, particularly men. Each year gives new
opportunities to promote services and products to individuals who have been avoiding
making a dental appointment. Sacramento Dental Care can offer dental services to
patients who are aware of cost, time constraint, and wanting quality care.
According to the Centers for Disease Control and Prevention, access to dental
care in California has been an issue of increasing concern as demonstrated by both
federal and state legislators. Recent research shows that many Californians do not
receive regular dental care. Oral diseases and other oral conditions such as tooth
caries, gum disease, oral cancer, and tooth loss are among the most prevalent of
chronic health conditions. Dental caries continues to be the most common chronic
disease in U.S. children and teenagers (Centers for Disease Control and Prevention,
2016).
There are factors that hinders access to dental care. Socioeconomic status and
ease of transportation will affect access to dental care. Also, if dentists are scarce or
limited within a region, access to care may be compromised. Anxiety also plays a
major role for people not getting dental care. An effective business plan will help give
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Sacramento Dental Care its best opportunity for success and provide dental access to
the community.
The dental industry is always experiencing change. For dentists to maximize
their efficiency in patient retention practices and bring in new patients, it is crucial
that new and relevant information be applied to make good, informed decisions for
the office. It is hard to stay ahead of the competition. But, when a business initiates
changes based on what patients and customers want, it is more likely to come out on
top. There are several trends that are affecting the dental industry and will continue to
impact dentistry in the future. This will be discussed more in detail in the marketing
strategy section. Some of these trends are 1) establishing and retaining the patient’s
trust of their dentists. This starts by educating people that taking care of their teeth is
related to their well-being. It can be done through marketing opportunities to promote
dental services and products. Using email marketing, blogging, social media
marketing, and search engine advertising will build confidence and trust with the
patients. 2) Online review is another trend people use for referrals and reviews to
choose their dentist. This is an extremely useful tool for Sacramento Dental Care to
have in order to help build its reputation and trust among current and potential
patients. It is good to follow patients to know what they think of their experience at
the dental office for feedback and to change the practice as needed. Patients’ reviews
matter for dentists to build a successful business. 3) Another trend is the increase in
importance of convenience. In today’s world, most people expect to access service
right away at their fingertips and get dental treatment when they want it. Such
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accessibility in dentistry can be an online link to allow patients to schedule
appointments, ask questions, and obtain dental paperwork anytime they want. Other
conveniences are expanded office hours, patients’ ability to pay online or from their
mobile devices, and having multiple services delivered for patients in one dental
appointment. Using up-to-date equipment such as 3D printing technology in dentistry
is also continually on the rise. Its usage in cutting-edge materials like resins shortens
the time to make and deliver to within minutes instead of days or weeks. 3D printing
is more commonly used in dental practices because of its capacity to produce the
quality finish and fine details that are done by dental laboratories. It also can be used
to make temporary or long-term results.
Founder
Sacramento Dental Care is an existing solo private practice that is transitioned
to and owned by Nam Hoang, a general dentist. The seller of the practice will not be
involved in the practices after the transition. If the practice becomes successful for
expanding in patients and profitability, there may be an opportunity for an additional
dental associate with practice equity as needed.
Taking over an existing dental practice is usually more assuring than starting a
business from scratch, particularly if the practice is already a well-managed and
profitable business. The hard part of the start-up work has already been done. The
business should already have procedures and protocols in place. Taking over an
established practice should have an immediate cash flow. A practice with a financial
history will give an idea of what to anticipate and make it easier to secure loans and
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attract patients. Acquiring existing patients, contracts, insurances, goodwill, suppliers,
staff, and equipment are additional benefits. The market for dental products and
services is ongoing. Existing employees will have experience they can share on what
works and what can be improved.
Forming a California Dental Corporation involves several steps including
submitting articles of incorporation to the California Secretary of State. Practicing as
a professional California dental corporation (LLC) may offer many benefits over
practicing as a sole proprietor. A California Professional Corporation is a unique type
of corporation offered only to licensed service professionals such as dentists. The
rules for forming and operating as a professional corporation in California are
governed by the Moscone-Knox Professional Corporation Act (California Secretary
of State, 2019). Legal advantages of an incorporation include not only limits to
personal liability, but also benefits in cash flow and tax considerations. Establishing
the practice as a professional corporation allows the owner to better raise capital and
ensure that the entity will survive after the owner’s departure.
Location and Geographical Markets
The choice of location to establish a dental practice is in midtown
Sacramento. This is due to several reasons. One major reason is that Sacramento has
had an increased dental market every year. According to the California Department of
Finance (CDOF) Demographic Research Unit, Sacramento has been consistently
experiencing 1% increases in population for the last 5 years (CDOF, 2019). This is
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the equivalent of an additional 15,000 new residents per year, more than any county
in California. The demand for dental care has definitely increased.
Sacramento itself has had an annual growth rate of more than 1% since 2015.
And last year, in 2018, it grew another 1.51 % according to the World Population
Review (2019). Sacramento County has a population of about 1,530,000 people,
reflecting a 1.07% increase from the previous year, according to the World
Population Review. That is an increase of almost 16,400 new potential dental
patients. Median income for Sacramento households is $54,614 and the mean
household income is $74,469 (Demographic Research Unit, 2019).
Sacramento’s strong economy and historically low unemployment rate make
it easier for people to obtain better medical and dental insurance. Household income
has increased and population growth in the city and surrounding areas remains
consistent. According to a professor and chief economist at Sacramento State
University, Sanjay Varshney, Sacramento’s current economy has been “nothing short
of spectacular (Hubert, 2019).”
Sacramento is also where the headquarters of the California Dental
Association is located. This means dentists have easy access to dental resources and
the support of fellow dental professionals. Also, the Sacramento District Dental
Society is known within the dental profession as the most active and resourceful
dental society in California. It offers extensive educational and career resources for
dentists.
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Another advantage for locating a dental practice in Sacramento is the
opportunity to serve not only local communities, but also patients near their place of
employment. With Sacramento having a large number of State employees, there will
definitely be people with good insurance and income to afford quality dentistry.
CHAPTER II
PRODUCTS AND SERVICES
Service Descriptions
Exams and Cleanings
One of the office’s goals is to provide preventative dental actions before
the prognosis of a dental diagnosis fails. During a patient’s first visit, the dentist
will thoroughly examine the inside and outside of the mouth. This will include a
full set of x-rays, panoramic x-ray, oral cancer screening, periodontal (gum)
exam, checking jaw joints for noise or pain, and evaluation of the existing teeth
or dentures. The dentist will diagnose any abnormality and establish treatment
options that will be best for the patient’s dental welfare. Patients are to come for
periodic annual examinations and regular hygiene visits.
A registered dental hygienist (possibility in future plans) or dentist will
deliver cleanings such as prophylaxis or deep cleaning known as scaling and
root planing. The dentist recommends an annual maintenance exam with
updated x-rays to recheck for cavities and other potential dental issues. Oral
hygiene will be reviewed to make sure the patient uses proper oral hygiene
practices at home.
The dentist or registered dental hygienist will also offer preventative
procedures such as dental sealants or fluoride therapy to prevent cavities as
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needed. Night guards or mouth guards can also be fabricated to protect against
clenching and grinding of teeth in teenagers or adults.
Digital X-Rays
During a patient’s initial visit and periodically thereafter, a series of
dental x-rays of the teeth will be taken ($200 for full mouth x-rays). This is
required to diagnose and treat the patient’s dental situation. The office will use
state-of-the-art digital x-rays. These machines are faster and more accurate than
traditional film x-ray equipment, producing 70-80% less radiation. Digital x-
rays, including panoramic x-rays eliminate the need for film fixer and developer
chemicals that can be hazardous to the environment. Another benefit of digital
x-rays is that there is no waiting time with digital x-rays. They are available
instantly for the dentist to see and analyze. A 3D machine called Cone-Beam
Computed Tomography (CBCT) Scans can also be utilized to visualize facial
skeletal anatomy for further evaluation of other possible issues related to the
jaw, including placement of dental implants or wisdom teeth extractions. This
technology produces one tenth of the radiation a medical CT scan produces.
Cost of procedure: $350 - $600.
Scaling and Root Planing (Deep Cleaning)
Scaling and root planing is a procedure in which a registered dental
hygienist or dentist uses hand instruments to remove plaque and tartar around
teeth and below the gums. Unless they decline, patients are anesthetized with
local anesthetic for deep cleaning so that they are at ease during the procedure.
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Root surfaces are cleansed and smoothed with electric and hand instruments. To
prevent bacteria and food buildup, it is critical to remove plaque and tartar from
the gum pockets, followed with good oral hygiene ($280 per quadrant/$1,120
full mouth).
If further procedures are needed to improve and stabilize the health of a
patient’s gums, the patient may be referred to a periodontist (gum specialist).
Removable Partial Dentures
A removable partial denture is a set of artificial teeth set to a metal or
plastic base that is similar to the color of the existing gums. The plastic base
surrounds a framework made of different durable metals. Partial dentures
sometimes have clasps that are attached to the natural teeth and can be easily
taken out of the mouth for cleaning or storing at night. ($1,200).
Crowns
A crown is made of metal, plastic, or porcelain and covers or protects a
tooth from fracture or being sensitive. Also known as a cap, the dentist cements
it over a shaven-down tooth. The crown restores the tooth to its standard size,
shape, and function. A crown stabilizes the tooth or simply improves esthetics
(average fee, $1,300). 3D printing allows crowns to be fabricated on site and is
revolutionizing the dental industry. A crown or bridge can be made within an
hour instead of waiting for weeks to be made and sent from an outside dental
laboratory. This shortens a patient’s time from two appointments to one
appointment ($800 per crown).

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Fixed Bridges
A fixed bridge is a set of attached crowns that fills the gap where one or
more teeth are missing. A fixed bridge is permanently bonded or cemented into
place, meaning that it can only be removed by cutting it off with a dental
handpiece ($800 per tooth or crown).
Implants
Implants are posts or “metal roots” that are surgically positioned in the
upper or lower jaw, where they are used as a replacement for one or more teeth.
Implants consist mostly of titanium and other materials that are accepted by the
body. Many people and dentists prefer implants over crowns, bridges, or partials
to replace teeth or support complete dentures ($3,400 per tooth replacement).
Future Products and Services
Minimal Orthodontics (Invisalign)
Invisalign is a brand name for clear orthodontic aligners. They are also
known as invisible retainers, clear braces, clear aligners, and aligner trays. They
are becoming very popular over traditional braces due to the discreet appearance
compared to metal brackets and metal wires. It is much easier for a patient to
wear the trays and also to brush and floss their teeth than cleaning between
wires and brackets. Orthodontic patients are more amenable to Invisalign
treatment than conventional orthodontic brackets and wires. Invisalign is used
based on mild severity of misalignment of teeth, duration of treatment, location,
and difficulty of the case ($5,000 per case).

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Periodontal Surgeries (Bone and Tissue Grafts, Gum Pocket Reduction)
Surgical pocket reduction removes excess gums that can cause tartar or
calculus buildup below the gum tissue. It makes teeth and gums easier to clean while
preventing infections from occurring ($1,500 per site). Bone and tissue grafts are used
to regenerate bone or tissue loss in certain cases. In some cases, they can help to
effectively regrow bone or tissue to where it is lost ($800 per site).

CHAPTER III
MARKETING PLAN
Market Analysis
Two marketing techniques are used to analyze the marketing strategy. First is
a SWOT (strengths, weaknesses, opportunities, and threats) analysis, followed by
STP (segment, target and positioning).
SWOT Analysis
SWOT analysis is part of a strategic planning process to evaluate and
recognize the strengths and weaknesses of the dental practice. It helps Sacramento
Dental Care to improve its business and protect it from existing and potential threats.
Strengths. Sacramento Dental Care is a distinguished dental practice, having
community ties, fair pricing on dental services, and location of the office.
Distinguished dental practice - friendly, high-quality dental care.
Relationships are built on honesty, trust and comfort. Patients are served by
experienced and educated staff, clean and modern facilities, the most current cutting-
edge technology, in-house services of full spectrum, and 24/7 emergency dental
hotline.
Experienced and educated staff. Sacramento Dental Care’s dentist will be
known for providing friendly, honest, reliable, comfortable, and punctual service to
his patients. This can be done by developing and strengthening Sacramento Dental
Care’s office culture. Having a positive workplace for the team will in turn reflect
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good patient support and a productive office. Staff will take regular continuing
education classes to refresh and improve on their dental skills and conduct at the
workplace. There will be weekly meetings with all staff members to go through the
office’s daily operations, visions, and goals. Having everyone work together with the
same purposes will make them happier and more caring, which the practice in turn
will thrive. Through having a reputable business by word-of-mouth, the dental
practice is anticipated to grow steadily.
The dentist has over 15 years of practice as an associate dentist and 1 year of
advanced education in general dentistry residency. Patients are more likely go to a
dentist who has been practicing for a while and who has extended education than to
another dentist who may have only a few years of experience in the field. The
dentist’s and staff members’ credentials will be on the website and posted on the wall
entrance where patients can easily see them when they walk in the office.
Sacramento Dental Care will address the patient’s concerns and questions.
During dental examinations, there will be time to thoroughly go over the patient’s
individual oral health conditions and provide options for the appropriate dental
treatment. The patient’s time will be highly respected, and he will be seen punctually.
Affordable payment options will be offered for dental services. The dentist at
Sacramento Dental Care will avoid over diagnosing and overselling dental treatments
by providing and going over with the patient several optional procedures to treat the
patient’s wants and needs. Also, Sacramento Dental Care will follow up after each
patient visit or procedure to schedule or remind them of their next appointment. The
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dentist will personally call the patient within the same day after a major dental
procedure to see how they are doing.
Clean and modern facilities. Having a clean and modern office design will
reflect the personality of the practice. A professional contractor will be hired to
renovate the office for design efficiency, maximizing workflow and productivity to
utilize the workspace’s potential. The cost is considered in the start-up expenses.
Calming earth-tone colors will help patients to feel at ease when they walk into the
office. Use of space and original photography and videography will show the
elegance and proficiency of the practice. This will also make patients feel relaxed and
tranquil.
Cutting-edge technology (i.e. digital x-rays, CAD-CAM printer, paperless and
CBCT scanner). Dental patients in today’s world are more inclined to patronize a
practice with the latest technology that will offer them the most efficient and
affordable service. Many patients have family to take care of, and they may also have
a job which puts them in a time crunch. Today’s dental machines can fabricate well-
made crowns or fillings within hours while the patient waits in the chair instead of
days or weeks. Other competitors tend to use labs that are located outside of the U.S.
and use lower quality materials. Sacramento Dental Care has an onsite lab and uses
materials that are made in the U.S.
Another strength that Sacramento has is that its services are expanded to
orthodontic, mouth guard, and surgical procedures that other local general practices
would not do and therefore must refer to specialists who would charge much more
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and take longer to get an appointment. Expanded inhouse services means cost savings
for the patient which will in turn increase Sacramento Dental Care’s value, strengthen
its competitive situation, and result in referrals from existing clients.
Community ties. Participating in Chamber of Commerce gatherings with local
businesses who are also actively involved in their community will give a presence of
Sacramento Dental Care business owner. Also, being active in the dental society will
build relationships with other local competing dentists who may want to work
together as a support team to make the dental community thrive. Attending local
market fairs and school activities by operating a permitted dental booth to educate
and promote dental access for potential future dental patients and will generate
awareness for Sacramento Dental Care’s practice.
Fair pricing. Due to the current high costs of dental care, many potential
clients are price checking dental offices for low out-of-pocket cost. American Dental
Association data (ADA: Dental Fees, 2018) on dental fees in Sacramento County
reveal that Sacramento Dental Care compares favorably with other Sacramento dental
offices’ fees. As shown in Table 1, Sacramento Dental Care’s prices are comparable
if not lower than other places especially on general services such as exams and
cleanings. This is to attract a price-conscientious clientele and is also done for fair
pricing and not to take advantage of the patient’s finances.

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Table 1
Average Cost and Price of Dental Care in Sacramento

Dental Service Sacramento's Average Sacramento Dental Care
Fee/Price Fee/Price
X-rays $221 $200
Cleaning and exam $78 $75
Deep Cleaning $1,149 $1,120
Sealant per tooth $39 $40
Dentures (per piece) $1,283 $1,200
Crowns $803 $800
Endodontics $698 $700
Teeth Whitening $300 $300
Occlusal Mouth
Guard $781 $750
Simple extractions $121 $120
Surgical extractions $225 $225
Silver fillings $135 $135
White fillings $173 $170
Invisalign $5,997 $4,000
Implant(s) $3,390 $3,400
Source: 2018 Sacramento Average Price Comparison from American Dental
Association Dental Fees (2018).
Providing other payment plans such as insurance and credit payments will
help clients’ affordability and convenience compared to our rivals. Sacramento
Dental Care will accept insurances including Aetna, Ameriplan, Assurant Health,
Blue Cross, Blue Shield Cigna, Delta Dental, MetLife, United Health Care, Pacific
Access, and Safe Guard. Financing can also be done through Care Credit or Lending
Club.
Business location. The location will be conveniently situated in midtown
Sacramento, between R Street and 20th Street, which is close to many businesses and
residential neighborhoods. While Sacramento Dental Care’s target patients are local
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Sacramento neighborhoods, students, and state workers, it is also open to anyone who
is looking for dental care. It has easy access off Interstate 80, Interstate 5, and
Highway 99. With the location near main freeways and local shops, people can either
take local transportation, drive, or ride their bikes to Sacramento Dental Care. The
dental office will be easily visible from the street with large signs on the building.
Office Hours. Hours are flexible; the office will be open earlier on Fridays
and on several Saturdays each month to accommodate patients compared to most
local dental offices that are open only on weekdays from 9 a.m. to 5 p.m. Sacramento
Dental Care will offer office hours as early as 7 a.m. and as late as 7 p.m. with
openings available on certain weekends. We provide care for our patients after
normal office hours with an on-call emergency hotline.
Incorporating a 24/7 on-call personal courtesy hotline is another advantage
that many other practices do not offer. As patients of record, our patients will have
access to 24/7 emergency on-call courtesy if they have any concerns or require urgent
care. Other dental offices do not have emergency on-call and so the patient has to
either go to the emergency room or wait until the dental office is open for business.
Unfortunately, most hospital emergency rooms are not well equipped to handle dental
situations like a fractured tooth or cavity pain.
Weaknesses. Weaknesses are usually identified, but often overlooked. Having
a SWOT analysis will help face underperformance problems in the business. One
such weakness is the lack of promotion and advertisement. At the beginning of the
practice takeover, there will be a low active patient poll compared to more established
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dental practices. This may be for the first 3 years due to overtaking a business and for
existing patients and the community to become more familiar with the dentist and
staff. This is expected of new businesses that are start-ups or have been acquired and
will take time depending on how quickly the rapport between the dental staff and
patients occurs.
Another limitation may be the deficiency in staffing, especially in the
beginning stages of managing the practice. Patient wait time will take longer; this
could lead to inefficiency of the workflow of the office. This eventually may result in
bad financial management. That means inadequate financing is available for new
product growth or more recruitment.
Opportunities. There are many opportunities for a dental practice like
Sacramento Dental Care to utilize. One is the students in educational institutions of
Sacramento who can be reached by being present on campus with a dental booth and
giving out free dental samples. Increasing relevant advertisements, competitive
pricing, and expanding on social media (i.e. the internet, participating in school fairs
and community services) will lead to more business opportunities and attract more
potential clientele.
Office hours could also be extended to earlier in the morning and later in the
evening; whereas, other offices usually open at 8 or 9 a.m. and close at 4 or 5 p.m.
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Threats. There are always threats to a solo business. One example is the local
competition. There are other general dental offices within Sacramento that may also
specialize in procedures that are done in-office such as endodontics, oral surgery and
orthodontics. Patients select a dentist mainly based on recommendations and comfort
with the dental provider. Another threat is the growing number of corporate and
dental management organizations compared to solo private dental offices. Today’s
trends of companies like Western Dental, Aspen Dental and Dental Access are
growing. With government loopholes for corporations to buy solo practices and
employ existing dentists in the practice, it leaves ownership and management to the
company, who profits from the dentists. Although on paper the dental offices are run
by dentists, the corporate dental company actually dictates how the offices are
operated. This tends to lead to subpar dental care, customer service, and other poor
dental consequences.
Today, new dentists graduate with large dental school debts of over $600,000
and it is extremely hard for them to start their own private dental practice. The
temptation of having a guaranteed salary at a corporate company without
responsibility of managing staff and overhead is very likely.
The main threat with these dental corporations and companies is that their
main goal is maximizing profits. While solo private offices are also concerned with
profitability, smaller practices can argue that patient’s needs usually come first as
dentists can know each patient individually and provide them with personalized,
quality care.
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STP (Segmentation, Targeting and Positioning)
Segmentation. Geographically, there are many students, families, adults, and
state workers in Sacramento where Sacramento Dental Care is located. One segment
is college students within 21-mile radius of Sacramento. Wikipedia reports there were
31,156 students enrolled in Fall 2019 at Cal State Sacramento; U.S. News stated
38,097 students were enrolled at UC Davis in 2019; and Sierra College in Rocklin
had 18, 565 students (Community College Review, 2020). The U.S. Census Bureau in
2018 reported there were 543,560 households in Sacramento County and 183,106 in
Sacramento City itself (U.S. Census Bureau, 2018). According to The Sacramento
Bee newspaper, about 31,000 state workers live in Sacramento, which is about 14%
of all workers (Venteicher & Reese, 2019). Adults is another segment, particularly
young adults age 20-39, who make up the largest group and 29% of Sacramento
County population according to the U.S. Census Bureau (2018). They are one of the
most robust groups who tend to go out and spend more for their physical appearance
and social acceptance.
Sacramento’s demography may also be segmented by education and income.
According to the U.S. Census, the overall average Sacramento income is $40,018.
People without a high school diploma average $22,268 (12.75% of Sacramento’s
population); a high school graduate makes $29,339 (22.90%); some college without a
degree or an Associate Degree (34.06%) average $35,246; a bachelor degree graduate
earns $54,560 (19.89%); and a graduate degree holder averages $76,691 (10.41%).
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This obviously shows the higher the education, the greater the income. The more the
income, the more affordable dental care can be (U.S. Census, 2018).
Another segmentation is dental insurance or financial payment of dental
services. These various types of dental insurance were mentioned earlier. Of the
dental insurances in Sacramento, Delta Dental Insurance has the largest network of
dentists. This is an example of one dental insurance that helps dental care to be more
affordable for patients. It is dedicated to dental prevention services such as periodic
check-ups and cleanings.
Tourism is another subcategory segment. Tourists come to Sacramento for
relaxing endeavors like shopping, site-seeing at the State Capitol, trying local
cuisines, and wine tasting as well as outdoor experiences such as hiking, biking,
fishing and boating. A dental business can provide dental care to tourists based on
emergency needs and referrals from current clients.
Targeting. Sacramento Dental Care will target customers by concentrating on
specific age groups, lifestyle choices, and buying behavior. One target group will be
adults, particularly young adults who are interested in their appearance and in taking
care of their overall health. They can also be subcategorized as people with income of
$50,000 or more annually, preferably having dental insurance. This income category
represents 63% of Sacramento households (U.S. Census Bureau, 2018).
This adult group would likely engage in social media that Sacramento Dental
Care’s website can provide in health and wellness services for them and their
children. This group’s age range is wide enough to include parents of teenagers,
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young adults, and adults who are willing to invest in themselves, which may require
orthodontics and other esthetic dental amenities for self-improvement.
With most of Sacramento’s population employed in government, health care,
and education, there should be a vast pool of potential dental customers who are
financially stable and can afford to have the best dental treatment. Located near
several highways and off the Interstate 80 Interstate freeway, it is convenient as it is
midway from San Francisco, Lake Tahoe, Reno, UC Davis, CSU Sacramento, and the
Bay Area.
Positioning. Sacramento Dental Care will position itself in the market among
dental offices for its personal, conscientious services along with current technology,
convenience, and quality products. For customers who are conscientious and
searching to experience comfort and delight, Sacramento Dental Care is one of the
few brands among dental offices that offers the most responsible, quality care, fairly
priced and in an eco-friendly environment. In order to reach these goals, we will
continually seek our patients’ feedback with annual surveys and suggestion box. The
eco-friendly environment will use paperless options by emailing or texting
information to patients, being conscious of resources that are used regularly and
trying to practice conservation. Having live plants throughout the office to keep
temperature down can conserve energy during the summer and give a calming feeling
to the occupants.
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Market Strategy
Sacramento Dental Care’s marketing strategy will be focused on online
marketing, personal and friendly dental staff, community involvement, small details
of the facility (state-of the art equipment and convenience), appealing promotions,
and concentrating on a more specific target segment such as cosmetic dentistry (i.e.
implants and white fillings).
1. Online Marketing
Sacramento Dental Care needs to have an online presence to compete in
today’s business environment. To attract ideal potential patients to find Sacramento
Dental Care online, the website needs to come up in the search results at or near the
top when people are searching in Google, Bing, or any other search engine for a
dentist in the area. The website design would take a significant investment of time to
learn about search engine optimization (SEO) for dentists, how to optimize the
website, and determine the best marketing strategy for the practice. It is especially
difficult when there are other dentists in the local area competing. Thus, there is a
need to hire a dental SEO company to custom design the dental website. So, having a
dental website is the core of the online setup to draw in new prospective Sacramento
Dental Care patients.
Using an online blog for the dentist to increase online presence is a plus. This
can be linked to the dental practice’s website. The blogs will be engaging,
informative, and have entertaining content. They will be posted regularly and have
social media buttons for likes and sharing.

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Another online idea to market the dental office is to use platforms such as
Facebook, Yelp, Twitter, Google+, Pinterest, Instagram, LinkedIn, and other websites
to link to the dental practice’s website. This will increase the online presence of the
practice and enable it to benefit from social media. Other ideas include mailing
notifications of the dental practice to the community, introducing new products and
services, promotions (i.e. advertising deals, activities and email marketing), being
active in dental industry and geographically related forums to be identified and
acknowledged by colleagues and patients (Downs, 2017).
Lately, there has been a downturn in social media marketing efforts due to 2017
changes in social media (Downs, 2017). Facebook, for instance, has been focusing
more on family and friends instead of advertising and news where dental businesses
used to get traffic. It will be costlier than before to get the same engagement online.
Analyzing performance regularly, figuring out the real market, and choosing the right
content to boost and pay for can help maximize the social media marketing budget to
increase patients’ awareness of and accessibility to Sacramento Dental Care.
Today, businesses need to be attentive on how patients are treated because they
may end up complaining online. Online reviews are becoming increasingly popular.
Some dentists do not monitor their online reviews, thinking if a patient has an issue,
they will hear it in person. Ninety-four percent of customers say that a negative
review online would deter them from a business or service provider. Negative
reviews will push patients to competitors. Eighty percent of consumers think business
owners who take their time to reply to online reviews care more about their clients
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and patients than those who do not (Murphy, 2018). Thus, it would be practical to ask
patients to review the practice when they are there for their appointment. It would
also be beneficial to have the dental staff ask for increased positive reviews and
improved patient satisfaction.
Another trend is online review management. Referrals and reviews are
formidable marketing tools. The practice will need to utilize an online review system
to its best potential to ensure that patients have the ability to give an online review.
2017 statistics from Bright Local show that 97% of consumers would likely read
online reviews before visiting a local business and 63.6% of consumers would check
reviews on Google prior to booking an appointment (see Figure 1).
Figure 1. Statistics from Bright Local show consumers are likely to read online reviews
before visiting a local business.
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2. Appealing Promotions
Research also indicates affordability, quality of care, and convenience are the
most important factors for patients when choosing a health care provider. At
Sacramento Dental Care, people deserve quality care that fits their budget. The office
offers several payment options such as discounts for first-time patients and flexible
financing arrangements for people without dental insurance. Most dental insurance
coverage plans are accepted to cut the cost of dental treatment.
3. In-Person Marketing
Another marketing strategy opportunity is in-person marketing. That means
that the dentist and dental staff need to keep a positive attitude and appearance in the
dental office. Everyone needs to reflect the practice’s or brand’s values when
interacting with patients as this is a direct image of the brand as the patient’s
perception of the staff and practice throughout the appointment. It is important to
always maintain a clean and modern working environment with employees that show
a positive attitude. The staff will be trained to be courteous, to greet patients when
they come in, and present a good attitude at work. A new patient’s first contact will
be the receptionist, so it is important that all staff are on the same page. It is good to
have a warm and welcoming reception area and waiting room. There should be toys
and a designated play area for children, and free Wi-Fi for patients to use while they
are waiting.
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4. Personal and Friendly Dental Staff
The quality of dental care at Sacramento Dental Care means we are dedicated to
offering personalized care to ensure every patient has a positive experience. It is very
important to acquire a script for use with every new patient in the first visit or phone
call. Sacramento Dental Care wants to know why new patients choose our office. Our
educated and well-trained staff will welcome patients and take the time to provide a
wide range of dental services to meet one’s oral health needs.
Also, there needs to be fun in the office environment. This can regularly be
done with games, raffles, and special events that patients can appreciate. Having
holiday themes and promotions will go a long way toward patient retention and
referrals.
5. State-of-the-Art Equipment
The latest technologies will be used to ensure efficient and accurate diagnosis
and treatment. We will continually implement changes and develop strategies to
ensure a positive outcome for our patients.
Although 3D printing has been around for years, there are many applicable
possibilities in the dental industry. What was once used as a lab tool is turning into
something used more in dental offices in all aspects of general dentistry,
implantology, prosthodontics, and even to make custom devices to aid patients with
sleep apnea.
The healthcare industry, including dentistry has been moving toward
digitization of paperwork and files because going paperless and utilizing online
29
storage is much more efficient. More dental practices are embracing new technologies
in creating an environmentally friendly, paperless setting. For the business plan, the
office should be using new technologies such as on-line scheduling, digital x-rays,
and other paperless solutions. Cloud storage is easily accessible and is a low cost,
affordable solution. Minimizing overhead is the way to maximize profits.
6. Accessibility
Another way to obtain trust from our patients is to offer convenience. We will
offer extended morning, evening, and weekend office hours so patients can easily
make it to their dental appointments. Emergency dental hours are also offered 24/7
for patients of record. For dental emergencies, we can provide same-day treatment.
Figure 2. Affordability, quality of care, and convenience are the most important
factors when patients are choosing health care services (Wilets, 2017).
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7. Community Involvement
Getting connected could also include attending local Chamber of Commerce
meetings to network with other local businesses and individuals who care about their
community as well as attending dental society meetings to connect with colleagues
and participate in their activities. One can also hold regular after-hours meetups, give
regular tours for preschool or elementary school students, and give lectures about oral
health at the local library, handing out business cards at every opportunity. Giving
people a physical item to focus on will remind them of the business in a different way
than digital marketing would. Another marketing strategy is to place educational and
informative brochures in the waiting room for patients to read while waiting. The
brochures can feature the benefits of using the dental services that are offered in the
office. These brochures and business cards should emphasize the dental office’s logo
and contact details. One also needs to build respectful relationships with other
dentists and patients to have the opportunity to build referrals. Marketing a business
requires people to “sell” themselves and make sure the potential referring dentist or
existing patient has a reason to refer.
8. Cosmetic Dentistry
Cosmetic dentistry plays a large part in making a patient feel confident and
look good. In order to maintain teeth and smiles to look their best, the latest
developments in cosmetic dentistry needs to be utilized. Some of these up-to-date and
sought after procedures and services are 1) digital impressions - more precise and
comfortable than a conventional impression; 2) dental implants - closest to replacing

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one’s actual tooth or teeth; 3) clear aligner trays for orthodontic treatment instead of
traditional stainless-steel wires and brackets; 4) using lasers to remove tissue or bone
with less bleeding and postoperative pain; and 5) metal-free restorations such as
fillings, veneers, crowns, and bridges to improve aesthetics.
Market Forecast
Table 2 shows an estimated sales forecast by month for the first year of
operation. Monthly revenue is about $65,000 which totals annual revenue of
$780,000 for 2021. This is based on a dental practice with three dental chairs and one
care provider and assumes four to six patients per day with one to two services
provided per patient. Projections are based on Levine’s American Dental Association
Dental Practice Success article which recommends increasing dental case acceptance
each year between 15-25% (Levine, 2019). Thus, forecasted sales revenue will be
20% for each of the following 2 years of Sacramento Dental Care’s ownership
takeover. Projected revenue for 2022 will be $936,000 and $1,123,200 in 2024.
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Table 2
Sales Forecast for 2021

Dental Product Fee/Price Services Sold/mo. Revenue
X-rays $200 10 $2,000
Cleaning and exam $75 28 $2,100
Deep Cleaning $1,120 2 $2,240
Sealant per tooth $40 50 $2,000
Dentures (per piece) $1,200 4 $4,800
Crowns $800 9 $7,200
Bridges $2,400 1 $2,400
Endodontics $700 5 $3,500
Teeth Whitening $300 10 $3,000
Simple extractions $120 30 $3,600
Surgical extractions $225 12 $2,700
Silver fillings $135 16 $2,160
White fillings $170 20 $3,400
Invisalign $5,000 2 $10,000
Implant (s) $3,400 4 $13,600
Services Sold per
Month Totals 203 $65,000
First Year
Revenue $780,000
CHAPTER IV
MANAGEMENT AND ORGANIZATION
Sacramento Dental Care is a private dental practice located in Sacramento. In
the first 3 years, there will be three employees including the dentist. There will be a
dental office manager who will take the role of running the front and back office
efficiently and effectively according to procedures and policy. She or he will require
important competencies in communication skills, planning and organizing, problem
analysis and problem-solving skills, and decision-making. Integrity, teamwork, and a
customer service focus are also important. The manager needs to have experience in
management or supervisory skills to make the work flow smoothly, an understanding
of dental terminology and dental office procedures, insurance plans, and claims
processing, and computer skills in Dentrix (dental management system) and MS
office programs.
The dental manager will work mainly at the front desk and also serve as the
receptionist. And of course, the manager and dental assistant need to support the
dentist and office’s mission and goals. Starting salary is $70,000 per year for the
manager because the manager will perform several roles including management and
front desk reception. PayScale reported the average salary for a dental office manager
is $53,448 in Sacramento. The pay range is $42,599 to $54,346 (PayScale, 2020).
Since the office is retaining employees from the previous owner and the office
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34
manager has years of experience, it will be beneficial to keep the employees through
the transition of ownership.
The dental assistant will set up each dental room and patient for treatment and
will assist the dentist throughout the dental procedure and cleanup. The dental
assistant will educate and promote oral health to patients and communicate with all
employees. He or she is to maintain a safe and clean operating environment in
compliance with Occupational Safety and Health Administration (OSHA) rules.
Starting salary is $40,000 per year. PayScale’s 2020 data pay rate is from $35,797 to
$44,346 depending on the years of experience the registered dental assistant may
have (PayScale, 2020).
The dentist will be the CEO of the practice and will deliver comprehensive
dental treatment to patients. The dentist will supervise the dental assistant and dental
manager according to their job descriptions. Starting salary is $120,000 per year
(ADA, 2018). This was taken from the American Dental Association’s article
Selected 2018 Results from the Survey of Dental Practice. It is the average income of
the first quartile of solo practice dentists.
Future
When the practice has been established for at least 5 years and the number of
patients and profit have grown, the idea of a second or third dentist is desirable
because of shared expenses, staff, and overhead. Plus, working with other dentists
may be helpful in getting second or third opinions or sharing ideas. It is also easier to
35
take time off when other dentists can cover the absence of another dentist. With
changes in healthcare settings, group practices are becoming more common.
Unfortunately, the number of individual dental practices has declined over
time and group dental practices are on the rise. The trend will continue due to cost-
sharing that occurs when multiple dentists share an office. One of the main drivers of
growth of group practices is the increasingly high cost of dental school. According to
the American Student Dental Association, dental students graduating in 2017 had an
average dental school debt of $287,331 (Goldy-Brown, 2019). The cost of dental
school is only increasing over the years. Having a private dental practice gives an
opportunity to bring in another associate and lower expenses in future goals.

CHAPTER V
OPERATIONAL PLAN
Location and Business Hours
Sacramento Dental Care will be located in midtown Sacramento, near schools,
the I-80 freeway, the State Capitol, and Arden Fair Mall. Business hours will be
Monday, 10 a.m. to 7 p.m.; Tuesday through Thursday, 9 a.m. to 6 p.m.; Friday, 7
a.m. to 4 p.m.; and 8 a.m. to 2 p.m. on the first and third Saturday of each month. The
office will close for lunch between 12:00 p.m. and 1:00 p.m.
Equipment and Technology
Technology is transforming the world of dentistry, and it is expected to
develop significantly in the coming years. The rise in 3D resin printing to provide
custom dental care to patients is one of the most sustaining trends. It is the up and
coming thing in the technology areas and business world. Utilizing 3D printing means
that complete dentures, crowns, indirect fillings, and other things can be made in
minutes instead of days or weeks. This means they can be made chairside in the
office and delivered within a day. This saves patients time and money without having
to come back days or weeks later and taking time off from work or their busy
schedule.
New technology 3D (three dimensional) imaging is now a regular treatment
for routine dentistry. There are also benefits associated with cone-beam computed
tomography (CBCT) which was developed about 20 years ago. One benefit is the
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37
ability to take the teeth, soft tissue, nerve anatomy, and facial bones all in one, three-
dimensional picture. This tool allows the treating dentist to capture a comprehensive
baseline record, evaluate for dental diseases, and plan various treatment options.
CBCT is faster, easier, and more accurate than traditional technology such as a 2D
panoramic x-ray. The return on investment results in getting more diagnostic data,
which in turn results in increased potential production and revenue ($400 per scan).
Figure 3. Sample of a Dental Cone Beam Computed Tomography (CBCT) X-Ray.

Source: Capital Tech Solutions. Apekian, Jenny, DDS - Midtowndental. 2017.
Figure 4. Dental CBCT scanner. Source: Bred Agency LLC, 2019. https://breakbred.
com/digital-domination/
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CBCT provides patients better care with immediate and minimally invasive
treatment while providing full service dentistry if the patient needs more complex
treatment.
Startup Expenses
The dental practice’s total start-up costs of $700,000 will be funded through Bank of
America for $600,000 (86% source of fund) and $100,000 (14% source of fund) will
be invested by the owner. It will be a 15-year business loan at a 6% interest with a 5-
year interest only payment, then amortization the remainder of the 15 years loan
(Bank of America, 2019). To keep costs low, the owner will purchase an existing
dental practice which will include existing patients, equipment, and furniture. The
funds will be used to purchase the existing dental practice ($400,000), buy new dental
equipment ($150,000), and renovate the dental office ($50,000). The remaining funds
($100,000) will be used as cash, first month rent, one month of supplies, and
organization expenses. Organization expenses are attorney fees, consultation fees, and
website design.
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Table 3
Start-Up Funding for Sacramento Dental Care
Use of Funds Notes

Cost of Dental Practice 100% of Gross Receipt $400,000
Dental Equipment and CAD-CAM printer, CBCT scan, and
Furniture furniture $150,000
Office Renovation Paint, wiring, and lighting $50,000
Office Rent $2,400
Dental Supply Gauze, suction tips, and filling materials $5,000
Cash $80,000
Organization expenses Legal fees and website design $12,600
Total $700,000
Source and Use of Funds Percent Investment Amount

Bank of America Loan 86% $600,000
Owner's Investment 14% $100,000
Total Start-Up Funds 100% $700,000
Budget
Variable Expenses
Variable expenses include lab and supply expenses. On average, lab and
supply expenses range between 13% and 17% of total business revenue according to
California Dental Association (CDA) Practice Advisor Julie Axt (Malaby, 2016). The
average variable ratio was calculated from the average of lab and supply expense
from three offices listed in Western Practice Sales (Cahill Associates, 2019). Table 4
below lists the sales revenue, the lab cost, supplies cost, and variable ratio of each
practice. The lower left corner of the table is the average variable ratio of three dental
offices in Sacramento, which is 0.1497. This ratio is used to find the variable cost (lab
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and supplies cost) for Sacramento Dental Care, and eventually the dollar break-even
point, which will be discussed in Chapter VI.
Table 4
Variable Ratio
Sales Lab Supplies
Office Data from Revenue Cost Cost Variable
Western Practice L+S
Sales (SR) (L) (S) Cost (L+S)/SR)
1 $931,901 $65,263 $49,980 $115,243 0.1237
2 $913,309 $84,450 $99,987 $184,437 0.2019
3 $360,790 $23,036 $21,555 $44,591 0.1236
Average $735,333 $57,583 $57,174 $114,757 0.1497
According to Western Practice Sales’ 2019 data based on three existing dental
chairs, cost of lab and supply totals up to $114,757 on average, which is above the
regular cost of $101,400 (13% of total revenue) that was stated by Julie Axt. This
shows the offices are outsourcing more of the laboratory work and not utilizing in-
house equipment to shorten time delivery and service cost. A more effective and
efficient way is the usage of 3D resin printing and CBCT scanner to decrease cost of
lab material, supplies, and delivery time. Instead of referring cases out, fabricating in-
house fillings and crowns would keep lab fees and supplies down. The more the
office uses new, high-tech machineries, the more cost-effective and profitable
Sacramento Dental Care will be.
Sacramento Dental Care expects to serve an average of four to six patients per
day during Year One and then increase to six to eight per day in Year Two. The goal
is to bring in about 10 to 15 new patients per month through marketing and

41
referrals. Sacramento Dental Care will treat every patient’s individual needs, from
anxiety to esthetic concerns. We want each patient to be as satisfied as possible, thus
we have the most current technology and expertise in general sedation and nitrous
oxide. Sacramento Dental Care will focus on patients’ needs by providing flexible
hours. Weekends and late hours are predicted to be busier than the weekdays since
most people are either at work, school or running errands on weekdays.
Fixed Expenses
Fixed expenses are part of the income statement, which is shown in Table 6.
Payroll is $276,000 for 2021, which includes the annual salary of the dentist,
manager, and a registered dental assistant. Each year thereafter, there is a 2% raise
increase. Payroll tax is estimated to be 12.5%. This includes 6.2% toward Social
Security, 1.45% Medicare (MC), and 3.4% Federal Unemployment (FUTA) and State
Unemployment Insurance (SUI). This is based on the Internal Revenue Service
website (IRS, 2019).
Another fixed expense is office rent, which costs $28,800 annually, or $2,400
per month. This is an average estimated assumption from Western Dental Sales.
Utilities are estimated to be $1,000 per month. Insurance for malpractice and workers
compensation are also about $1,000 per month. Marketing promotion is about $3,000
each year. This includes $250 per month for website maintenance (Cahill Associates,
2019).
Continuing education is required for all staff to maintain their licensure. This
expense will decrease in the first several years due to expected increase of patient
42
load but will increase as workload stabilizes. Interest expense, another fixed cost, is
the $600,000 interest-only loan paid at 6% for 5 years. Thus, interest expense for
2021 and 2022 will be $36,000, and $22,203 for 2023, with a goal to obtain a
minimum $300,000 cash balance at the end of the year. This will be used for a 6
months’ emergency reserve. Excess of $300,000 will be paid toward the $600,000
loan.
Depreciation of $10,000 per year is based on purchasing $150,000 in new
equipment, $50,000 of all present furniture ($10,000 estimated value), and equipment
in the office (estimated $40,000). This is 20 years of equipment and furniture
depreciation.
There is an amortization of $412,600 intangible assets of purchasing the
existing office customer list (estimated value of $350,000), plus $50,000 office
renovation of paint, wiring and lighting. There is an additional $12,600 for
organization expenses. Amortization is calculated to be $41,260 per year for a period
of 10 years. The number is based on $150,000 of new dental equipment and furniture
and $50,000 for office renovation of paint, wiring, and lighting. Also included are the
costs for attorney fees, consulting fees, and website design.

CHAPTER VI
FINANCIAL PLAN
Because Sacramento Dental Care is a new business and therefore has no
financial history, forecasts are based on current practice sales information from
Western Practice Sales (Cahill Associates, 2019). Average weekday revenue goal is
$2,500 and $5,000 on weekends. This equates to $780,000 revenue for 2021. For
2021, there will be a net profit of $134,117. It is forecasted that revenue will increase
by 20% for each of the next 2 years because of marketing and an increase in patients
(Appendix B). Therefore, net profit will be $222,429 and $339,517, respectively for
years 2022 and 2023 (see Figure 5). These numbers were calculated in the forecast
pro forma income statement in Table 6.
Net Profit
2021 2022 2023
$339,517
$222,429
$134,117
Figure 5. 3-year net profit forecast in 2021-2023.
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Break-Even Analysis
Total fixed expenses for 2021 is $463,060. With the assumption variable cost
at 14.97%, the contribution margin ratio will be 0.8503. Thus, the break-even points
for 2021, 2022, and 2023 are $544,584, $551,888, and $543,110, respectively.
Table 5
Break-Even Analysis
Year 2021 2022 2023
Revenue (goal) $780,000 $936,000 $1,123,000
Fixed Costs $463,060 $469,270 $461,807
Variable Costs $116,766 $140,119 $168,143
Variable Cost (% of sales) 14.97 14.97 14.97
Contribution margin ratio 0.8503 0.8503 0.8503
Dollar break-even point $544,584 $551,888 $543,110
Financial Results
The projected balance sheet (Table 6) details Sacramento Dental Care’s
forecasted financial position at the end of 2021, 2022, and 2023. Sacramento Dental
Care’s estimated assets for 2021 are $834,117, 2022 will be $815,080, and $796,063
in 2023. Liabilities in 2021 is $600,000, 2022 is $358,534 (due to paying $241,466
toward loan debt), and no liability by 2024 after paying off the debt of $332,243.
Owner’s equity anticipated for 2021 is $234,117, 2022 is $456,546, and $796,063 in
2023. This shows what Sacramento Dental Care owns as well as its debt.
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Table 6
Projected Balance Sheet

Year 2021 2022 2023
Cash $267,777 $300,000 $332,243
Supplies $5,000 $5,000 $5,000
Total Current Assets $272,777 $305,000 $337,243
Long-Term Assets
Furniture $10,000 $10,000 $10,000
Equipment $190,000 $190,000 $190,000
Accumulated Depreciation $10,000 $20,000 $30,000
Customer List $350,000 $350,000 $350,000
Office Upgrade/Organization
Expenses $62,600 $62,600 $62,600
Accumulated Amortization $41,260 $82,520 $123,780
Total Long-Term Assets $561,340 $510,080 $458,820
Total Assets $834,117 $815,080 $796,063
Long-Term Debt $600,000 $358,534 $0

Long-Term Liabilities $600,000 $358,534 $0
Total Liabilities $600,000 $358,534 $0
Owner’s Equity
Owner's Equity $100,000 $100,000 $100,000
Retained Earnings $134,117 $356,546 $696,063
Total Owner's Equity $234,117 $456,546 $796,063
Total Liabilities and Equity $834,117 $815,080 $796,063
Cahill Associates. Western Practice Sales. (2019). Retrieved 20 December 2019,

from https://westernpracticesales.com/category/northern-california/
46
The following tables describe different scenarios of pro forma income. Table
6 shows income as forecasted. The net profit to sales revenue is 17% for 2021, 24%
in 2022, and 30% for 2023. Table 7 assumes revenue for each year is 20% higher,
which makes this a forecast plan for the good years. Income profit would be expected
to increase as well with $222,990, $327,420, and $466,041 respectively to 2021,2022,
and 2023. Compare this to the standard pro forma income statement, 20% increase in
revenue results net profit to sales revenue ratio of 24% for 2021, 29% for 2022, and
35% for 2023. Table 8 assumes revenue each year is 20% lower, which makes this a
plan for the bad years. As a result, net profit would decrease with a net profit to sales
revenue ratio of only 7% for 2021, 15% for 2022, and 22% for 2023.
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Table 7
Pro Forma Income Statement
Year 2021 2022 2023
Revenue $780,000 $936,000 $1,123,200
Operating Expenses
Payroll $276,000 $281,520 $287,150

Payroll Taxes $34,500 $35,190 $35,894
Office Rent $28,800 $28,800 $28,800
Utilities $12,000 $12,000 $12,000
Insurance $12,000 $12,000 $12,000
Marketing Promotion $3,000 $3,000 $3,000
Lab and Supplies $116,766 $134,246 $154,342
Equipment Repair/Maintenance $5,000 $6,000 $7,000
Continuing Education Classes $4,500 $4,000 $3,500
Interest Expense $36,000 $36,000 $21,512
Total Operating Expenses $528,566 $552,756 $565,199
Net Income before Interest, Tax,

Amortization, and Depreciation $251,434 $383,244 $558,001
Amortization $41,260 $41,260 $41,260

Depreciation $10,000 $10,000 $10,000
Total Amortization and
Depreciation $51,260 $51,260 $51,260
Net Income Before Income Tax $200,174 $331,984 $506,741
Income Tax $66,057 $109,555 $167,225
Net Income $134,117 $222,429 $339,517
Net Profit/Sales Revenue 17% 24% 30%

48
Table 8

(Good Case Scenario: 20% More Revenue than Forecasted)
Year 2021 2022 2023
Revenue $936,000 $1,123,200 $1,347,840
Operating Expenses
Payroll $276,000 $281,520 $287,150

Payroll Taxes $34,500 $35,190 $35,894
Office Rent $28,800 $28,800 $28,800
Utilities $12,000 $12,000 $12,000
Insurance $12,000 $12,000 $12,000
Lab & Supplies $140,119 $168,143 $201,772

Depreciation, & Amortization $384,081 $539,946 $746,844
Amortization $41,260 $41,260 $41,260

Depreciation $10,000 $10,000 $10,000
Total Depreciation and Amortization $51,260 $51,260 $51,260
Income taxes $109,831 $161,266 $229,543
Net Income $222,990 $327,420 $466,041
Net Profit /Sales Revenue 24% 29% 35%

49
Table 9

(Bad Case Scenario: 20% Less Revenue than Forecasted)
Year 2021 2022 2023
Revenue $624,000 $748,800 $898,560
Operating Expenses
Payroll $276,000 $281,520 $287,150

Payroll Taxes $34,500 $35,190 $35,894
Office Rent $28,800 $28,800 $28,800
Utilities $12,000 $12,000 $12,000
Insurance $12,000 $12,000 $12,000
Lab & Supplies $93,413 $112,095 $134,514

Depreciation, & Amortization $119,480 $220,457 $353,759
Amortization $20,000 $20,000 $20,000

Depreciation $21,260 $21,260 $21,260
Total Depreciation and Amortization $41,260 $41,260 $41,260
Income taxes $25,812 $59,135 $103,125
Net Income $52,407 $120,062 $209,374
Net Profit /Sales Revenue 8% 16% 23%

50
Table 10 shows Sacramento Dental Care’s incoming and outgoing cash at
hand from the beginning of January 2021 through the end of December 2023. The
expected cash budget statement breakdown in details of cash ending balance for each
year of $267,777 for 2021, $300,000 for 2022 and $332,243 for 2023. This includes
paying down the loan in 2022 of $241,466 and the rest of $358,534 in 2023 while
keeping an emergency fund of a minimum $300,000 in cash.
Tables 11 and 12 describe good and bad scenario cash budget forecasts,
respectively. Table 10 assumes revenue for each year is 20% higher, which makes the
forecast plan for the good years. Table 11 assumes revenue each year is 20% lower,
which makes the plan for the bad years. Although even in the bad years, cash position
is still estimated to be productive by the end of each year.

51
Table 10
Cash Budget
Year 2021 2022 2023
Beginning cash balance $100,000 $267,777 $300,000

Add: Cash receipts
Collections from
Customers/Insurance $780,000 $936,000 $1,123,200
Total available cash $880,000 $1,203,777 $1,423,200
Less: Cash disbursements
Payroll $276,000 $281,520 $287,150
Payroll Taxes $34,500 $35,190 $35,894
Office Rent $28,800 $28,800 $28,800
Utilities $12,000 $12,000 $12,000
Income tax expense $66,057 $109,555 $167,225
Insurance $12,000 $12,000 $12,000
Lab & Supplies $116,766 $134,246 $154,342
Purchase Dental Practice $400,000 $0 $0
Equipment & Furniture $150,000 $0 $0
Organization expenses and
Renovation $62,600 $0 $0
Supplies (Start-up) $5,000 $0 $0
Total Disbursements $1,212,223 $662,311 $732,423
Preliminary Balance -$332,223 $541,466 $690,777
Borrowing $600,000
Loan Repayment -$241,466 -$358,534
Ending Cash Balance $267,777 $300,000 $332,243
Ending Loan Balance $600,000 $358,534 $0

52
Table 11
Projected Cash Budget

(Good Case Scenario: 20% More Revenue than Forecasted)
Year 2021 2022 2023

Add: Cash receipts
Collections from Customers/Insurance $936,000 $1,123,200 $1,347,840
Total available cash $1,036,000 $1,423,200 $1,647,840
Payroll $276,000 $281,520 $287,150
Payroll Taxes $34,500 $35,190 $35,894
Office Rent $28,800 $28,800 $28,800
Utilities $12,000 $12,000 $12,000
Insurance $12,000 $12,000 $12,000
Lab & Supplies $140,119 $168,143 $201,772
Interest Expense $36,000 $32,601 $9,880.23
Organization expenses and Renovation $62,600 $0 $0
Borrowing $600,000
Loan Repayment -$56,650 -$378,680 -$164,670
Ending Loan Balance $543,350 $164,670 $0

53
Table 12
Projected Cash Budget

(Bad Case Scenario: 20% Less Revenue than Forecasted)
Year 2021 2022 2023

Add: Cash receipts
Collections from Customers/Insurance $624,000 $748,800 $898,560
Total available cash $724,000 $927,703 $1,198,560
Payroll $276,000 $281,520 $287,150
Payroll Taxes $34,500 $35,190 $35,894
Office Rent $28,800 $28,800 $28,800
Utilities $12,000 $12,000 $12,000
Insurance $12,000 $12,000 $12,000
Lab & Supplies $93,413 $112,095 $134,514
Organization expenses and Renovation $62,600 $0 $0
Borrowing $600,000
Loan Repayment -$42,009 -$245,534
Ending Loan Balance $600,000 $557,991 $312,456

CHAPTER VII
CONCLUSION
Going through Sacramento Dental Care’s marketing plan, management and
organization, operating plan, and financial plan, one can conclude running
Sacramento Dental Care will be a viable and profitable dental business in Sacramento,
California. Start-up cost for Sacramento Dental Care is $700,000, with $550,000 for
operating expenses annually.
If the strategy is executed as stated in this business plan, Sacramento Dental
Care’s net profit will be $134,117 by the end of its first year, $222,429 in its second
year, and $339,517 by the third year. By 2023, the loan of $600,000 would be paid
off. The information can be seen in the projected pro forma income statement
(Table 5) and cash budget (Table 6). The lender can see Sacramento Dental Care is
capable of servicing its debt. This will involve quality, trustworthy, low-cost care and
a high standard of customer service for every patient who walks into Sacramento
Dental Care.
54
REFERENCES
56
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American Dental Association Health Policy Institute. (2020). Income, Gross
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California Department of Finance. Demographic Research Unit. (2019). Total
estimated and projected population for California and counties: July 1,
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but-bumps-are-ahead,-report-says.shtml
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dental-practice-1
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.
APPENDICES
62
APPENDIX A
MARKETING RESEARCH
State/County/City Total Population Percent Change

1/1/18 1/1/19
California 39,740,508 39,927,315 0.5
Sacramento 1,530,242 1,546,174 1.0

Citrus Heights 87,841 88,095 0.3
Elk Grove 172,347 174,025 1.0
Folsom 78,533 79,835 1.7
Galt 26,296 26,489 0.7
Sacramento 500,724 508,172 1.5
Balance of County 590,530 594,216 0.6
State/County Total Population Percent Change

1/1/18 1/1/19
California 39,740,508 39,927,315 0.5
Madera 158,328 159,536 0.8
Merced 279,424 282,928 1.3
Nevada 99,024 98,904 -0.1
Orange 3,213,275 3,222,498 0.3
Placer 389,480 396,691 1.9
Plumas 19,793 19,779 -0.1
Riverside 2,412,536 2,440,124 1.1
Sacramento 1,530,242 1,546,174 1.0
San Francisco 880,980 883,869 0.3
San Joaquin 757,279 770,385 1.7
Stanislaus 554,108 558,972 0.9
Yolo 221,175 222,581 0.6
State/County Population Estimates with Annual Percent Change. January 1, 2018 and
2019. Department of Finance Demographic Research Unit. Released on May 1, 2019.
http://www.dof.ca.gov/research/demographic/reports/estimates/e-1/view.ph
63
APPENDIX B
FINANCIAL HIGHLIGHTS BY YEAR
Projected Revenue, Expenses & Costs, &

Net Profit
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
2021 2022 2023
Revenue Expenses & Costs Net Profit
Projected Revenue, Expenses and Costs, Net Profit and Net Loss for 2021-2023

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BUSINESS PLAN – A GENERAL DENTAL PRACTICE IN

A Project Presented to the Faculty

BUSINESS PLAN – A GENERAL DENTAL PRACTICE IN

Signed Certification of Approval page

Dr. Xinmei Xie, Project Advisor Date

Ms. Katrina Kidd, Director Date

Dr. Tomas Gomez-Arias, Dean Date

To my parents, siblings, and Tibi who have given me strength, motivation,

you, I would not be the individual I am today.

opportunity of being part of the Stanislaus State’s family.

List of Tables ...................................................................................................... viii

List of Figures ..................................................................................................... ix

Mission Statement .................................................................. 1

II. Products and Services ........................................................................ 8

Services Descriptions ............................................................. 8

III. Marketing Plan................................................................................... 13

Market Analysis ..................................................................... 13

IV. Management and Organization ........................................................... 33

V. Operational Plan ................................................................................ 36

Location and Business Hours .................................................. 36

Break-Even Analysis .............................................................. 44

VII. Conclusion ........................................................................................ 54

A. Marketing Research ................................................................................. 62

1. Average Cost and Price of Dental Care in Sacramento ................................... 17

2. Sales Forecast for 2021.................................................................................. 32

3. Start-Up Funding for Sacramento Dental Care ............................................... 39

4. Variable Ratio ............................................................................................... 40

5. Break-Even Analysis ..................................................................................... 44

6. Projected Balance Sheet................................................................................. 45

7. Pro Forma Income Statement ......................................................................... 47

10. Cash Budget .................................................................................................. 51

1. Statistics from Bright Local show consumers likely to read online

2. Affordability, quality of care, and convenience are the most important

3. Sample of a Dental Cone Beam Computed Tomography (CBCT) X-Ray ....... 37

4. Dental CBCT scanner .................................................................................... 37

5. 3-year net profit forecast in 2021-2023 .......................................................... 43

Sacramento Dental Care is a self-owned business, acquired from an existing private

dental practice in Sacramento to serve patients of all ages, targeting primarily

communities within and surrounding the Sacramento area. Sacramento is a vibrant

dental office in Sacramento will show the path of an entrepreneur to a profitable

every patient deserves.

Sacramento Dental Care’s mission is to provide patients with the utmost

make educated decisions regarding their dental treatment.

Besides dental needs, Sacramento Dental Care is here to give patients a

and connect with the community.

working adults to delay dental treatments due to lack of money persuading

care in California has been an issue of increasing concern as demonstrated by both

The dental industry is always experiencing change. For dentists to maximize

related to their well-being. It can be done through marketing opportunities to promote

importance of convenience. In today’s world, most people expect to access service

accessibility in dentistry can be an online link to allow patients to schedule

appointment. Using up-to-date equipment such as 3D printing technology in dentistry

to make temporary or long-term results.

Sacramento Dental Care is an existing solo private practice that is transitioned

expanding in patients and profitability, there may be an opportunity for an additional

dental associate with practice equity as needed.

business from scratch, particularly if the practice is already a well-managed and

attract patients. Acquiring existing patients, contracts, insurances, goodwill, suppliers,

works and what can be improved.

Forming a California Dental Corporation involves several steps including

submitting articles of incorporation to the California Secretary of State. Practicing as

practicing as a sole proprietor. A California Professional Corporation is a unique type

of corporation offered only to licensed service professionals such as dentists. The