Business Plan Adriatic-1

BUSINESS EXPANSION PLAN
& ORTHODONTICS


Our Vision & Purpose
Our wish for you, your children and family is to achieve the goal of never needing dental work in the future.
Our purpose comes from the derivation of the word “doctor.” It comes from the Latin word doc-ere, which means “to show, teach or teach to know.”
We help achieve this goal of “teaching” with hygiene visits twice a year...A goal that can eliminate gum disease and future dental work for a lifetime.
This goal is our sincerest wish for you, your children and family!
Adriatic Dental © 2018 All Rights Reserved.


Table of Contents
4 Statistics & Figures 5 5-Year Expansion Plan 7
Section One: Demographics & Market Research
Section Two: Adriatic’s Marketing Plan 10 Section Three: Adriatic’s Residual Business Model 14 Section Four: New Office Space to Scale Delivery & Revenue 18
Overview & History
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Overview & History
Dr. Obradovic is a graduate of University of Belgrade dental school, one of the best in the country. She has been a dentist for over 20 years and has been through several post graduate courses in different fields of dentistry since receiving her DDS degree.
I have an active practice in San Marcos for nearly 20 years with steady and continuous practice growth. My practice is located at 960 West San Marcos Blvd, Suite 110.
In addition to myself practicing full time, there
is another associate dentist 3-days per week, a periodontist 1-day per week (who performs implant surgeries) and 3 dental hygienists to handle our recall patients..
The growth and stability of my business are due to two factors, which I feel are relevant for any business owner:
1. The services offered by my practice have steadily grown with added services through diligent continuing education. Much like any large
corporation that adds new products to expand their revenue base, such as Apple adding a mini Ipad or the new Apple Watch. The services now at my practice include:
Dentures, Implant Supported Dentures, Lanap Laser Treatment, Periodontal Treatment, Pediatric Dentistry, Root Canal therapy, TMJ, Oral Surgery, Orthodontics, Anti-Aging Dentistry and a full service Hygiene Education and Prevention Department.
2. Business and Marketing education & training. I have consistently educated myself as well as administrative and support staff on the subject of business management and marketing principles. As such, our control and direction for future growth is under our own control.
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Statistical Facts & Figures
The stability of Adriatic Dental & Orthodontics is best represented by the statistics and figures of the practice. Such numbers remove opinion or vested interest in
illustrating or presenting a profile for the business. and documented statistics of Adriatic Dental:
Years in operation
Total Patient Files since starting Average # of New Patients/Month* No. of Active Patient*
No. of Employees
Day Open for business
No. of operatories
Associate Dentist (General Dentist) Periodontist (Implant Surgeries) Number of Hygienists
The following are recorded
21
10,032
62 2,776
13
M-F
6
3 days/wk 1 day/wk 3
*NB: The National New Patient Monthly Average for Dental Practices in the U.S. is 26. Adriatic’s monthly new patients is nearly 2.5 times the national average.
The National Active Patient count for dental practices in the U.S. is less than 1,000. Adriatic’s Active Patient Count is 2.5 times higher than the national average.
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Statistical Facts & Figures Continued
The following graphs below show the month by month production and collections over the last 12 months. Practice metrics and statistics are reported weekly, monthly, quarterly and annually which supplies management information for control of Adriatics’s future growth.
Collections Last 12 Months
Production Last 12 Months
Differential of Production vs Collections
As illustrated by the collections and production statistics, the annual total revenue generated is $2.7M while the collections is at $2.43M.
The collection percent, at 90% of total production is a department that can generate an additional $110,000 to $150,000 (a 4-6% increase) in annual cash flow.
Education and training of the Insurance Billing Department is well underway, as this area has been isolated for improvement for 2018.
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
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Total Production Last 12 Months
$2,700,547
Total Collections Last 12 Months
$2,429,547


5-Year Expansion Plan
The following pages illustrate the 5-Year Expansion Plan for Adriatic Dental. The plan contains 4 sections:
Section 1: Demographics, Population and Market Research
Section 2: Adriatic’s Marketing Plan for Capturing Community Residence Section 3: Adriatic’s Residual Retention Business Model
Section 4: New Office Space to Scale Delivery and Revenue
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SECTION 1: DEMOGRAPHIC RESEARCH
San Marcos: Demographics Market Research
An overview of both San Marcos, Vista and Carlsbad demographics were reviewed
for future projections. The information is diagrammatic rather than copy driven for simplicity of presentation. The new location is strategically located that draws on a tri- city population. Average income is $56,139.
The San Marcos population has grown by nearly 24 percent since 2012. The current population of San Marcos exceeds 95,000 residence. Source: Community Impact Newspaper
Permitted Homes for Families
Population Growth 1960 - 2017
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The future growth of Adriatic in planning of its 5-Year expansion is supported by the increase in population and the future population projections.
Adriatic’s business plan adroitly employs external marketing to both San Marcos and Vista to capture not only existing residence, but new residence moving into the area.


SECTION 1: DEMOGRAPHIC RESEARCH
Vista & San Marcos: Demographics Market Research
Vista California’s estimated population is 101,659 according to the most recent United States census. Vista is projected to increase the population by 2-3% yearly affording an influx of new consumers, which as stated under the San Marcos section, will be canvased with external marketing to capture both existing and community residence. Average income is around $50,000/yr. (see marketing section)
Vista
Carlsbad population exceeds 110,000 and one of the tri-city area codes for market penetration. Fifty percent of Carlsbad population are over the age of 55 while over 30% are young children & teens. This market demographics affords both family, orthodontic and general dentistry, but as well a large market for periodontal treatment implants and cosmetic dentistry. Average income exceeds $59,464 /yr.
Carlsbad
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SECTION 2: MARKETING PLAN
5-Year Marketing Plan
Adriatic Dental’s marketing plan is based on two key factors to grow an increase in patient base and thereby revenue. The key factors, while simple, are extremely thought through:
1) Consumer Acquisition (new patients). The planning for this is in place and currently being executed and revised to include our new location. See diagram below.
2) Consumer Retention. Upon acquiring new patients, the most key element to practice growth is our newly formed Hygiene Retention Department. This department has been analyzed and uses national metric (average benchmark statistics) of the hygiene industry. The consumer retention development of Adriatic is covered Section 3 of this business plan.
Internal Referral Marketing (Word of Mouth)
Adriatic utilizes an internal referral marketing system with 2 specific marketing tools. The system includes:
1. An Internal Referral Gift Box. The gift box is handed to each patient daily as they come for treatment with a gift card to pass along to their family members and friends. It normally offers an Exam, X-ray and Cleaning for $59.
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SECTION 2: MARKETING PLAN
2. Database Mailers to Active Patients. Adriatic’s Retention & Loyalty Program The second tool and system is our quarterly database mailers. These are for
birthdays, holidays, new years, summer and special occasions.
These database mailers are an automated system whereby they are all printed a
year in advance and schedule to go out according to designated months. are a high-end “hallmark” looking gift card, which is shown below:
These
Database Mailer
Mailed once per quarter, for birthdays, holidays, new years, summer occasions and special occasions.
Mailed in a Clear Plastic Envelope
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SECTION 2: MARKETING PLAN
External Marketing: New Patient Acquisition
The external marketing for new patient acquisition is through use of a high-end 8-page descriptive brochure, which is mailed to the community neighborhood 4 times a year. All marketing is branded and consistence to establish identity as well as location.
Neighborhood Brochure Mailer
4X per Year to Each Cart Route
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2345 S. Melrose Dr, Vista: New Location
Map Showing Existing & New Location
2345 S Melrose Dr
SECTION 2: MARKETING PLAN
Tri-City Geofence: San Marcos, Vista & Carlsbad
The below diagram is a targeted geofence using the center point of the new location at 2345 S. Melrose Dr, Vista. The geofence targets both San Marcos and the new Vista location, which is approximately 10 minutes from the current location on San Marcos Blvd.
Image capture: May 2017 © 2018 Google
Vista, California Google, Inc.
New Location: A Tri-City Geofence—San Marcos, Vista & Carlsbad
3-Mile Radius
The geofence marketing area encompasses both existing residence of San Marcos as well as those
in Vista. The “Star” is the location of 2345. S. Melrose Dr., Vista. The marketing fence however is inclusive of a long established branded Adriatic in the city of San Marcos.
Adriatic’s Geofence (Geographic market)
Vista
Street View - May 2017
Carlsbad
San Marcos
No. of Cart Routes 54
Total Delivery Addresses 32,675
Annual Marketing to Cart Routes, 4X per year: Total Adriatic Brochures/Yr = 135,000
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Hygiene Industry Metrics
SECTION 3: RESIDUAL RETENTION BUSINESS MODEL
Residual Hygiene Business Model
The most important aspect of the 5-Year Expansion Plan is implementation of a residual based business model. Dentistry has a unique factor within the Hygiene Department that affords scalability and revenue growth by use of a disciplined recall system.
The analytics below give a projection, based on current experience, of revenue growth by building Adriatic’s Hygiene “Wellness” Program.
To explain this growth factor a few industry metrics (analytics) have to be known.
The following benchmark production and revenue statistics come from three
separate sources of research: The American Dental Association, Dental IQ and Dental Economics. The hygiene metrics come from rdhmag.com, an on-line hygiene industry metrics and research membership website. Separately, the metrics are further validated from Hygiene Diamonds, owner is Ms. Wendy Briggs, RDH and consultant for more than 20 years.
$1,500
200 $300,000
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Average Daily Hygiene Production
# of Days Worked per Year by Dental Hygienists
Annual Hygiene Revenue from 1 Full Time Hygienist
Each full time hygienist (working an average of 4 days/week, 50 weeks per year) will generate an average revenue of $1,500 per day X 200 days per year = $300,000.
The daily revenue production is based on a combination fee for service and PPO practice. If the practice contains HMO patients, the daily production reduces to an average of $1,100 to $1,250. Adriatic Dental has no HMO patients and is primarily fee for service/PPO.


SECTION 3: RESIDUAL RETENTION BUSINESS MODEL
Residual Hygiene Dept: 5-Year Revenue Plan
Adriatic Dental, 2 years ago averaged 4.5 to 5 days per week of hygiene. This department of hygiene has grown to 8 days per week of hygiene with employed hygienists that work 11 days a week.
The most recent hygienist will add an additional 3 days of hygiene in the next 6 months.
The Expansion Plan
The Expansion Plan is based on raw factual numbers represented by the number of New Patients per month. Adriatic is current acquiring an average of 62 New Patients per month for the past year.
2017 New Patients per Month Chart
Projections
The following pages illustrate the growth projections based on Adriatic’s historical new patient flow, the average production and metrics from the dental industry.
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SECTION 3: RESIDUAL RETENTION BUSINESS MODEL
Scaling the Hygiene Department Revenue
To follow the below revenue chart: The average visits for a patient is 2X per year for cleanings and annual exam, and the average patients seen per day by the hygienist is 8/day. While the chart shows one month of new patients over a period of 1 year, this occurs every month of the year.
Each month 7.5 days of hygiene are generated from 62 New Patients per month. There will be a 40% loss of patients over time, which is shown in the calculation. 7.5 days of hygiene in January results in 4.5 hygiene days in June and next January.
Revenue Growth 2018
62 62 62 62 62 62 62 62 62 62 62 62 62
Average Patient Visits the Hygienist 2X/year for Cleanings & Annual Exam
Average Hygienist Sees 8 Patients per Day
Jan June
New Hygiene Days 7.5 40% database loss
Jan
4.5
New Hygiene Days 7.5
New Hygiene Days 7.5
40% database loss
4.5
4.5
7.5 Hygiene Days Added
12 Hygiene Days Added
16.5 Hygiene Days Added
2018
2019
2020
2021
2022
1 Full Time Hygienist Added 2 Full Time Hygienist Added 3 Full Time Hygienist Added 4 Full Time Hygienist Added
5 Full Time Hygienist Added
$300,000 $600,000 $900,000 $1,200,000
$1,500,000
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SECTION 3: RESIDUAL RETENTION BUSINESS MODEL
Practice Growth & Revenue Projection
The practice growth revenue projections are based on solid metrics of adding additional providers and building a hygiene retention “Wellness Center” Adriatic dental is moving to a Tri-City location, located by a Home Depot (strategic for marketing purposes as
all marketing materials will have the Home Depot log...Which all residence know this location.) The below bar graphs give a growth pattern for 5 years. In 2018, Adriatic Dental will add a full time associate doctor and specialists (see below chart). In 2019, other specialist will be added and the volume of recall patients returning in the hygiene center will require addition of a new hygienist per year.
Not to mention, that when a retention program is put in place, over 60% of the patients returning have incomplete dental work due to finance and time constraints.
5-Year Growth Chart
= Dr. Valentina Obradovic
= Existing Associate Revenue (2nd doctor 3-days/week) = New Associate Revenue (3rd doctor 4-days/week)
= Periodontist (1-day/week) = Endodontist (1-day/week) = Oral Surgeon (1-day/week) = Hygienists (4-days/week)
3.9M 3.3M
4.6M 5.0M 4.3M
1
2
3
4
5
6
Oral Surgeon 1 day/wk
Endodontist 1 day/wk
Periodontist 1 day/wk
3rd Dr. Associate 4 days/wk
2nd Dr. Associate 3 days/wk
Dr. Obradovic 4-days/wk
1
2
3
4
5
6
Oral Surgeon 1 day/wk
Endodontist 1 day/wk
Periodontist 1 day/wk
3rd Dr. Associate 4 days/wk
2nd Dr. Associate 3 days/wk
Dr. Obradovic 4-days/wk
1
2
3
4
5
Oral Surgeon 1 day/wk
Endodontist 1 day/wk
Periodontist 1 day/wk
3rd Dr. Associate 4 days/wk
2nd Dr. Associate 3 days/wk
Dr. Obradovic 4-days/wk
1
2
3
4
Endodontist 1 day/wk
Periodontist 1 day/wk
3rd Dr. Associate 4 days/wk
2nd Dr. Associate 3 days/wk
Dr. Obradovic 4-days/wk
2.7M
1
2
3
Endodontist 1 day/wk
Periodontist 1 day/wk
3rd Dr. Associate 4 days/wk
2nd Dr. Associate 3 days/wk
Dr. Obradovic 4-days/wk
1
2
3
Periodontist 1 day/wk
2nd Dr. Associate 3 days/wk
Dr. Obradovic 4-days/wk
2017 2018 2019 2020 2021 2022
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SECTION 4: NEW OFFICE SPACE FOR DELIVERY & GROWTH
New Office Space: A Requirement for Expansion & Growth
A vital requirement for expansion and growth for Adriatic Dental is acquiring new quarters to accommodate the volume of new patients and returning patients in the hygiene education center.
Adriatic Dental currently has 6 operatories and just hired another hygienist. The current annual production is 2.7 million, collections of 2.45. Its capacity to grow is currently hindered from lack of space.
The new facility at 2345 Melrose Dr, Vista, CA, is a bit over 3,000 square feet and affords
2345 S Melrose Dr
new expansion space that will take the number of operatories from 6 to 10. With the new facility Adriatic will have years of expansion space in addition to expanding to more days per week and more hours per day with use of “split scheduling.”
2345 Melrose Dr., Vista, CA
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Image capture: May 2017
Vista, California Google, Inc.
Street View - May 2017
© 2018 Google


Strategic Tri-City Location: San Marcos, Vista & Carlsbad
The new Adriatic location is strategically placed in a Tri-City area less than a block away from Home Depot.
All direct mail and external marketing will leverage the Home Depot location for identification of Adriatic’s location. In all tri-city locations there isn’t a residence
that doesn’t visit Home Depot for household improvements. The marketing strategy employs use of an iconically branded national chain that spends millions on advertising.
Adriatic will leverage their marketing dollars by “riding” on Home Depot advertising. The map below illustrates and example of how all direct mail will utilize this concept.
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