Dental Practice Budget

[bb2014]

Could anyone give me an estimation of how much it would cost to build a dental practice? Construction and equipment fees etc.

Here are the specs being looked at currently:

Shopping plaza in middle class area.
1200 sqft
2520 per month including taxes and fees.

Looking to put on 3 ops and a small lab. Also looking at digital X-ray system and computer software. Doesn't have to be super fancy and high end everything but it has to be presentable. I know there are many variables when it comes to opening a practice but what are the price ranges for those of you who has experience with opening a practice with similar specs?

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[Daurang]

Could anyone give me an estimation of how much it would cost to build a dental practice? Construction and equipment fees etc.

Here are the specs being looked at currently:

Shopping plaza in middle class area.
1200 sqft
2520 per month including taxes and fees.

Looking to put on 3 ops and a small lab. Also looking at digital X-ray system and computer software. Doesn't have to be super fancy and high end everything but it has to be presentable. I know there are many variables when it comes to opening a practice but what are the price ranges for those of you who has experience with opening a practice with similar specs?

Too many variables to answer your question. I built mine 1500sf 3 ops brand new for $80k 15 years ago. It can easily balloon to $500k if you don't shop around.

 

[cmcner]

You'd be surprised, sometimes there are built out vacant spaces that just require you to pay standard rent, it does depend on the regional market though. Also those deals rarely include equipment, but sometimes in great situations they do at a discount.

 

[bb2014]

I'm looking at a couple companies that offer the combination of construction and equipment. I'll give them a call to see what they can do with 100-125k budget


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[ysrebob]

Construction costs vary regionally, so it's hard to tell you exactly. $100/sq ft is a very rough ballpark figure for cost to remodel existing commercial space for dental to achieve a modest but presentable level of finish. Costs would be higher in an urban area. I am just finishing up with building 3 ops in a 1200sqft office condo unit and spent right at $100,000 on construction, with very careful cost control.

Two ways to cut up-front construction costs: (1) you may be able to negotiate with the landlord to front you some of the "Tenant Improvement" money (presumably in exchange for a higher rent -- this can be, in effect, a good form of startup financing). Or, (2) sometimes you can find space that has previously been used for dental, in which case you may be able to get whatever remodeling is needed done for far less (reusing the existing plumbing and wiring). But you need to figure out why the previous office didn't survive in this location.

A second, probably bigger budget buster: you will need to buy equipment and supplies. If you take the usual route of letting Patterson or Schein guide you, you will spend far more than your construction costs on this front. With very VERY careful cost control, I am just finishing equipping and supplying this 3 op office for another $125K. That includes all the dental-specific stuff plus all the standard small business startup stuff (signage, insurances, taxes and fees, etc etc).

So my bottom line for a small startup will be $225K to open the doors, plus working capital to cover early operating losses. This is negotiating or price-shopping every line item in the budget, doing everything possible myself (drew out the construction plans right down to the pipe specs for the plumbing; installed my own IT and phone systems; bought refurbished used equipment wherever practical and installed everything myself; IKEA instead of custom or dental-specific cabinetry; etc). I think it would be hard to do it for a whole lot less.

Conventional wisdom is that, even with existing practices currently selling for a premium, it is financially better to buy an existing office than to try to start from scratch. The major upside to scratch-starting, as I see it, is that you can do things precisely according to your vision/needs. Know that it's much wore work to scratch start; also you will (and I expect to) pay a steep price in reduced earnings for the first few years as the practice grows from zero.

 

[bb2014]

Construction costs vary regionally, so it's hard to tell you exactly. $100/sq ft is a very rough ballpark figure for cost to remodel existing commercial space for dental to achieve a modest but presentable level of finish. Costs would be higher in an urban area. I am just finishing up with building 3 ops in a 1200sqft office condo unit and spent right at $100,000 on construction, with very careful cost control.

Two ways to cut up-front construction costs: (1) you may be able to negotiate with the landlord to front you some of the "Tenant Improvement" money (presumably in exchange for a higher rent -- this can be, in effect, a good form of startup financing). Or, (2) sometimes you can find space that has previously been used for dental, in which case you may be able to get whatever remodeling is needed done for far less (reusing the existing plumbing and wiring). But you need to figure out why the previous office didn't survive in this location.

A second, probably bigger budget buster: you will need to buy equipment and supplies. If you take the usual route of letting Patterson or Schein guide you, you will spend far more than your construction costs on this front. With very VERY careful cost control, I am just finishing equipping and supplying this 3 op office for another $125K. That includes all the dental-specific stuff plus all the standard small business startup stuff (signage, insurances, taxes and fees, etc etc).

So my bottom line for a small startup will be $225K to open the doors, plus working capital to cover early operating losses. This is negotiating or price-shopping every line item in the budget, doing everything possible myself (drew out the construction plans right down to the pipe specs for the plumbing; installed my own IT and phone systems; bought refurbished used equipment wherever practical and installed everything myself; IKEA instead of custom or dental-specific cabinetry; etc). I think it would be hard to do it for a whole lot less.

Conventional wisdom is that, even with existing practices currently selling for a premium, it is financially better to buy an existing office than to try to start from scratch. The major upside to scratch-starting, as I see it, is that you can do things precisely according to your vision/needs. Know that it's much wore work to scratch start; also you will (and I expect to) pay a steep price in reduced earnings for the first few years as the practice grows from zero.

First of all, congrats on your practice! Sounds like you really poured your heart and soul into it! I talked to Patterson and Schein and they are really expensive. Did you hire a company who specializes in dental/medical offices or a just a general contractor with good reviews? I also found many construction layouts online matching the dimensions of the space leased so I was thinking about hiring a general contractor and have them follow the blueprint while also making adjustments if needed. By the way, what permits did you need to get the practice up and running and what city is your practice in?

 

[Daurang]

First of all, congrats on your practice! Sounds like you really poured your heart and soul into it! I talked to Patterson and Schein and they are really expensive. Did you hire a company who specializes in dental/medical offices or a just a general contractor with good reviews? I also found many construction layouts online matching the dimensions of the space leased so I was thinking about hiring a general contractor and have them follow the blueprint while also making adjustments if needed. By the way, what permits did you need to get the practice up and running and what city is your practice in?

Get a blueprint from Schein and shop around for a general contractor not recommended by them. If you look for a hispanic or asian contractor, chances are you will save at least 50%. Simply go to strip mall nail salons and ask the owner for referrals.

 

[Cold Front]

Could anyone give me an estimation of how much it would cost to build a dental practice? Construction and equipment fees etc.

Here are the specs being looked at currently:

Shopping plaza in middle class area.
1200 sqft
2520 per month including taxes and fees.

Looking to put on 3 ops and a small lab. Also looking at digital X-ray system and computer software. Doesn't have to be super fancy and high end everything but it has to be presentable. I know there are many variables when it comes to opening a practice but what are the price ranges for those of you who has experience with opening a practice with similar specs?

To specifically answer your questions:

Construction: $50-80 psft (based on market)

Treatment rooms/ops: $7-20k (based on brand)

Digital Pan: $19k (Carestream/Kodak model)

Digital sensors: $4k (Carestream too, but the price is if you buy it with the pan and software bundle)

Practice Management Software: Free (Softdent if you buy the X-rays)

Small Lab: $1-2k (depends on what you need in the lab, you can go with used equipment here).

Computers: $600 each (Go by system requirements for the practice management software).

Furniture: $1-2k (waiting room, reception, staff room, etc).

Office Sign: $500-3k (depends on how fancy you want to make it look).

Autoclave: $4-6k (MidMark M9 or M11, one of the best in the industry)

Clinic Supplies: $5-8k (Hand pieces, hand instruments for procedures, room set ups, ultrasonic machine, cavitron machines with tips, curing lights, etc).

Printer and Fax Machine: $50 a month lease (try Ricoh, you won't regret it).

Credit Card Machine: Free (try Square)

Business Cards: $150 (for 2,000 cards typically)

Shredder: $50 (from Amazon)

Steralization area cabinets: $1-2k (Depends on size, I usually use IKEA kitchen brand)

Miscellaneous: $2k (use these funds for additional items).

Good luck.

 

[bb2014]

Get a blueprint from Schein and shop around for a general contractor not recommended by them. If you look for a hispanic or asian contractor, chances are you will save at least 50%. Simply go to strip mall nail salons and ask the owner for referrals.

Will do! Thanks!

To specifically answer your questions:

Construction: $50-80 psft (based on market)

Treatment rooms/ops: $7-20k (based on brand)

Digital Pan: $19k (Carestream/Kodak model)

Digital sensors: $4k (Carestream too, but the price is if you buy it with the pan and software bundle)

Practice Management Software: Free (Softdent if you buy the X-rays)

Small Lab: $1-2k (depends on what you need in the lab, you can go with used equipment here).

Computers: $600 each (Go by system requirements for the practice management software).

Furniture: $1-2k (waiting room, reception, staff room, etc).

Office Sign: $500-3k (depends on how fancy you want to make it look).

Autoclave: $4-6k (MidMark M9 or M11, one of the best in the industry)

Clinic Supplies: $5-8k (Hand pieces, hand instruments for procedures, room set ups, ultrasonic machine, cavitron machines with tips, curing lights, etc).

Printer and Fax Machine: $50 a month lease (try Ricoh, you won't regret it).

Credit Card Machine: Free (try Square)

Business Cards: $150 (for 2,000 cards typically)

Shredder: $50 (from Amazon)

Steralization area cabinets: $1-2k (Depends on size, I usually use IKEA kitchen brand)

Miscellaneous: $2k (use these funds for additional items).

Good luck.

Thank you for this very detailed breakdown! This is really going to help me out a lot. May I ask, what permits are required to start the practice? Would I still need a business permit if the location is at a shopping plaza?

 

[Cold Front]

Will do! Thanks!




Thank you for this very detailed breakdown! This is really going to help me out a lot. May I ask, what permits are required to start the practice? Would I still need a business permit if the location is at a shopping plaza?

Tax ID or EIN: SS-4 Form (this is a federal form).
Incorporation article: LLC or S-Corp (this is a state level)

Depending on landlord, both maybe required.

 

[liyajose]

To specifically answer your questions:

Construction: $50-80 psft (based on market)

Treatment rooms/ops: $7-20k (based on brand)

Digital Pan: $19k (Carestream/Kodak model)

Digital sensors: $4k (Carestream too, but the price is if you buy it with the pan and software bundle)

Practice Management Software: Free (Softdent if you buy the X-rays)

Small Lab: $1-2k (depends on what you need in the lab, you can go with used equipment here).

Computers: $600 each (Go by system requirements for the practice management software).

Furniture: $1-2k (waiting room, reception, staff room, etc).

Office Sign: $500-3k (depends on how fancy you want to make it look).

Autoclave: $4-6k (MidMark M9 or M11, one of the best in the industry)

Clinic Supplies: $5-8k (Hand pieces, hand instruments for procedures, room set ups, ultrasonic machine, cavitron machines with tips, curing lights, etc).

Printer and Fax Machine: $50 a month lease (try Ricoh, you won't regret it).

Credit Card Machine: Free (try Square)

Business Cards: $150 (for 2,000 cards typically)

Shredder: $50 (from Amazon)

Steralization area cabinets: $1-2k (Depends on size, I usually use IKEA kitchen brand)

Miscellaneous: $2k (use these funds for additional items).

Good luck.

Hi, I`m planning to start a clinic from the scratch. How can I find a contractor who would do the construction at a reasonable rate?

 

[Daurang]

Hi, I`m planning to start a clinic from the scratch. How can I find a contractor who would do the construction at a reasonable rate?

CALL AROUND based on friend's referal? Go peek inside some nail salons and comment on how nice it looks, then get their contractor number.