Business Plan Adriatic

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 deriva on of the word “doctor.” It comes from the La n 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 life me.
This goal is our sincerest wish for you, your children and family!
Adriatic Dental © 2018 All Rights Reserved.


Table of Contents
4 Sta s cs & Figures 5 5-Year Expansion Plan 7
Sec on One: Demographics & Market Research
Sec on Two: Adria c’s Marke ng Plan 10 Sec on Three: Adria c’s Residual Business Model 14 Sec on Four: New Office Space to Scale Delivery & Revenue 18
Overview & History
8


Overview & History
Dr. Obradovic is a graduate of University of Belgrade dental school, one of the best in the country. She has been a den st for over 20 years and has been through several post graduate courses in different fields of den stry since receiving her DDS degree.
I have an ac ve prac ce in San Marcos for nearly 20 years with steady and con nuous prac ce growth. My prac ce is located at 960 West San Marcos Blvd, Suite 110.
In addi on to myself prac cing full me, there
is another associate den st 3-days per week, a periodon st 1-day per week (who performs implant surgeries) and 3 dental hygienists to handle our recall pa ents..
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 prac ce have steadily grown with added services through diligent con nuing educa on. Much like any large
corpora on 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 prac ce include:
Dentures, Implant Supported Dentures, Lanap Laser Treatment, Periodontal Treatment, Pediatric Den stry, Root Canal therapy, TMJ, Oral Surgery, Orthodon cs, An -Aging Den stry and a full service Hygiene Educa on and Preven on Department.
2. Business and Marke ng educa on & training. I have consistently educated myself as well as administra ve and support staff on the subject of business management and marke ng principles. As such, our control and direc on for future growth is under our own control.
4


Sta s cal Facts & Figures
The stability of Adria c Dental & Orthodon cs is best represented by the sta s cs and figures of the prac ce. Such numbers remove opinion or vested interest in
illustra ng or presen ng a profile for the business. and documented sta s cs of Adria c Dental:
Years in opera on
Total Pa ent Files since star ng Average # of New Pa ents/Month* No. of Ac ve Pa ent*
No. of Employees
Day Open for business
No. of operatories
Associate Den st (General Den st) Periodon st (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 Na onal New Pa ent Monthly Average for Dental Prac ces in the U.S. is 26. Adria c’s monthly new pa ents is nearly 2.5 mes the na onal average.
The Na onal Ac ve Pa ent count for dental prac ces in the U.S. is less than 1,000. Adria c’s Ac ve Pa ent Count is 2.5 mes higher than the na onal average.
5


Sta s cal Facts & Figures Con nued
The following graphs below show the month by month produc on and collec ons over the last 12 months. Prac ce metrics and sta s cs are reported weekly, monthly, quarterly and annually which supplies management informa on for control of Adria cs’s future growth.
Collec ons Last 12 Months
Produc on Last 12 Months
Differen al of Produc on vs Collec ons
As illustrated by the collec ons and produc on sta s cs, the annual total revenue generated is $2.7M while the collec ons is at $2.43M.
The collec on percent, at 90% of total produc on is a department that can generate an addi onal $110,000 to $150,000 (a 4-6% increase) in annual cash flow.
Educa on 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 Produc on Last 12 Months
$2,700,547
Total Collec ons Last 12 Months
$2,429,547


5-Year Expansion Plan
The following pages illustrate the 5-Year Expansion Plan for Adria c Dental. The plan contains 4 sec ons:
Sec on 1: Demographics, Popula on and Market Research
Sec on 2: Adria c’s Marke ng Plan for Capturing Community Residence Sec on 3: Adria c’s Residual Reten on Business Model
Sec on 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 projec ons. The informa on is diagramma c rather than copy driven for simplicity of presenta on. The new loca on is strategically located that draws on a tri- city popula on. Average income is $56,139.
The San Marcos popula on has grown by nearly 24 percent since 2012. The current popula on of San Marcos exceeds 95,000 residence. Source: Community Impact Newspaper
Permi ed Homes for Families
Popula on Growth 1960 - 2017
8
The future growth of Adria c in planning of its 5-Year expansion is supported by the increase in popula on and the future popula on projec ons.
Adria c’s business plan adroitly employs external marke ng to both San Marcos and Vista to capture not only exis ng residence, but new residence moving into the area.


SECTION 1: DEMOGRAPHIC RESEARCH
Vista & San Marcos: Demographics Market Research
Vista California’s es mated popula on is 101,659 according to the most recent United States census. Vista is projected to increase the popula on by 2-3% yearly affording an influx of new consumers, which as stated under the San Marcos sec on, will be canvased with external marke ng to capture both exis ng and community residence. Average income is around $50,000/yr. (see marke ng sec on)
Vista
Carlsbad popula on exceeds 110,000 and one of the tri-city area codes for market penetra on. Fi y percent of Carlsbad popula on are over the age of 55 while over 30% are young children & teens. This market demographics affords both family, orthodon c and general den stry, but as well a large market for periodontal treatment implants and cosme c den stry. Average income exceeds $59,464 /yr.
Carlsbad
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SECTION 2: MARKETING PLAN
5-Year Marke ng Plan
Adria c Dental’s marke ng plan is based on two key factors to grow an increase in pa ent base and thereby revenue. The key factors, while simple, are extremely thought through:
1) Consumer Acquisi on (new pa ents). The planning for this is in place and currently being executed and revised to include our new loca on. See diagram below.
2) Consumer Reten on. Upon acquiring new pa ents, the most key element to prac ce growth is our newly formed Hygiene Reten on Department. This department has been analyzed and uses na onal metric (average benchmark sta s cs) of the hygiene industry. The consumer reten on development of Adria c is covered Sec on 3 of this business plan.
Internal Referral Marke ng (Word of Mouth)
Adria c u lizes an internal referral marke ng system with 2 specific marke ng tools. The system includes:
1. An Internal Referral Gi Box. The gi box is handed to each pa ent daily as they come for treatment with a gi 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 Ac ve Pa ents. Adria c’s Reten on & 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 gi 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 Plas c Envelope
11


SECTION 2: MARKETING PLAN
External Marke ng: New Pa ent Acquisi on
The external marke ng for new pa ent acquisi on is through use of a high-end 8-page descrip ve brochure, which is mailed to the community neighborhood 4 mes a year. All marke ng is branded and consistence to establish iden ty as well as loca on.
Neighborhood Brochure Mailer
4X per Year to Each Cart Route
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2345 S. Melrose Dr, Vista: New Loca on
Map Showing Exis ng & New Loca on
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 loca on at 2345 S. Melrose Dr, Vista. The geofence targets both San Marcos and the new Vista loca on, which is approximately 10 minutes from the current loca on on San Marcos Blvd.
Image capture: May 2017 © 2018 Google
Vista, California Google, Inc.
New Loca on: A Tri-City Geofence—San Marcos, Vista & Carlsbad
3-Mile Radius
The geofence marke ng area encompasses both exis ng residence of San Marcos as well as those
in Vista. The “Star” is the loca on of 2345. S. Melrose Dr., Vista. The marke ng fence however is inclusive of a long established branded Adria c in the city of San Marcos.
Adria c’s Geofence (Geographic market)
Vista
Street View - May 2017
Carlsbad
San Marcos
No. of Cart Routes 54
Total Delivery Addresses 32,675
Annual Marke ng to Cart Routes, 4X per year: Total Adria c 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 implementa on of a residual based business model. Den stry has a unique factor within the Hygiene Department that affords scalability and revenue growth by use of a disciplined recall system.
The analy cs below give a projec on, based on current experience, of revenue growth by building Adria c’s Hygiene “Wellness” Program.
To explain this growth factor a few industry metrics (analy cs) have to be known.
The following benchmark produc on and revenue sta s cs come from three
separate sources of research: The American Dental Associa on, 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 Produc on
# of Days Worked per Year by Dental Hygienists
Annual Hygiene Revenue from 1 Full Time Hygienist
Each full me 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 produc on is based on a combina on fee for service and PPO prac ce. If the prac ce contains HMO pa ents, the daily produc on reduces to an average of $1,100 to $1,250. Adria c Dental has no HMO pa ents and is primarily fee for service/PPO.


SECTION 3: RESIDUAL RETENTION BUSINESS MODEL
Residual Hygiene Dept: 5-Year Revenue Plan
Adria c 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 addi onal 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 Pa ents per month. Adria c is current acquiring an average of 62 New Pa ents per month for the past year.
2017 New Pa ents per Month Chart
Projec ons
The following pages illustrate the growth projec ons based on Adria c’s historical new pa ent flow, the average produc on 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 pa ent is 2X per year for cleanings and annual exam, and the average pa ents seen per day by the hygienist is 8/day. While the chart shows one month of new pa ents 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 Pa ents per month. There will be a 40% loss of pa ents over me, which is shown in the calcula on. 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 Pa ent Visits the Hygienist 2X/year for Cleanings & Annual Exam
Average Hygienist Sees 8 Pa ents 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
Prac ce Growth & Revenue Projec on
The prac ce growth revenue projec ons are based on solid metrics of adding addi onal providers and building a hygiene reten on “Wellness Center” Adria c dental is moving to a Tri-City loca on, located by a Home Depot (strategic for marke ng purposes as
all marke ng materials will have the Home Depot log...Which all residence know this loca on.) The below bar graphs give a growth pa ern for 5 years. In 2018, Adria c Dental will add a full me associate doctor and specialists (see below chart). In 2019, other specialist will be added and the volume of recall pa ents returning in the hygiene center will require addi on of a new hygienist per year.
Not to men on, that when a reten on program is put in place, over 60% of the pa ents returning have incomplete dental work due to finance and me constraints.
5-Year Growth Chart
= Dr. Valen na Obradovic
= Exis ng Associate Revenue (2nd doctor 3-days/week) = New Associate Revenue (3rd doctor 4-days/week)
= Periodon st (1-day/week) = Endodon st (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
Endodon st 1 day/wk
Periodon st 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
Endodon st 1 day/wk
Periodon st 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
Endodon st 1 day/wk
Periodon st 1 day/wk
3rd Dr. Associate 4 days/wk
2nd Dr. Associate 3 days/wk
Dr. Obradovic 4-days/wk
1
2
3
4
Endodon st 1 day/wk
Periodon st 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
Endodon st 1 day/wk
Periodon st 1 day/wk
3rd Dr. Associate 4 days/wk
2nd Dr. Associate 3 days/wk
Dr. Obradovic 4-days/wk
1
2
3
Periodon st 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 Adria c Dental is acquiring new quarters to accommodate the volume of new pa ents and returning pa ents in the hygiene educa on center.
Adria c Dental currently has 6 operatories and just hired another hygienist. The current annual produc on is 2.7 million, collec ons 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 Adria c will have years of expansion space in addi on 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 Loca on: San Marcos, Vista & Carlsbad
The new Adria c loca on is strategically placed in a Tri-City area less than a block away from Home Depot.
All direct mail and external marke ng will leverage the Home Depot loca on for iden fica on of Adria c’s loca on. In all tri-city loca ons there isn’t a residence
that doesn’t visit Home Depot for household improvements. The marke ng strategy employs use of an iconically branded na onal chain that spends millions on adver sing.
Adria c will leverage their marke ng dollars by “riding” on Home Depot adver sing. The map below illustrates and example of how all direct mail will u lize this concept.
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