1.0 Executive Summary
The purpose of this business plan is to secure $425,000 a capital for the development of a dental laboratory based in McKenzie County, North Dakota. Dental Laboratory LLC (“the Company”) was founded with the intention of providing a wide range of services specific for the needs of general dentists and specialized dental practitioners that require the production of dental appliances, implants, bridges, and related products. Full scale revenue generating operations will convince in the third quarter of this year once the laboratory has been developed.
Operations
The Company will directly employ its dental lab technicians that will undergo substantial training as a relate to the proper development of appliances are used in the course of dental treatments. The business will initially operate on a regional basis within McKenzie County while concurrently expanding its online presence so that orders can be acquired from dental practitioners throughout the country.
The business will directly receive its payments from dental practices. The Company will not directly take any insurance. In the event that the patient is directly responsible for the dental appliance, the Company will coordinate this payment with the patient.
The third section of this dental laboratory business plan will further discuss the operations of the business.
The Financing
As noted above, the Company is currently seeking $425,000. This funding will be used for the build out of the location, dental laboratory equipment, as well as general furniture, fixtures, and equipment. Management will contribute $75,000 towards the venture. Moving forward, the Company to easily secure additional rounds with capital based on the highly predictable streams of revenue produced from dental appliance production.
The Future
Through the power of the Internet, the Company is not limited to only providing services to practitioners within the county. Once the business establishes initial foothold in this market, the Company intends to aggressively expand its operations so that it can provide service to any dental clinic within the United States. This will be accomplished through direct outreach initiatives with dental practitioners as well as through online marketing channels.
Market Overview
Revenue Forecasts
2.0 The Financing
2.1 Funds Required
The dental laboratory startup capital will be allocated as follows:
2.2 Management and Investor Equity
The Founder is the 100% owner of Dental Laboratory LLC.
2.3 Exit Strategies
There would be a significant demand for this dental laboratory given the economically secure nature of revenue produced as well as the significant contribution margins generated from each engagement. In the event that the businesses be sold, the Company will coordinate with a business sales specialist that focuses on dental businesses.
3.0 Operations
As noted, the executive summary, the Company will be actively involved with providing a wide range of dental appliances to the exact specifications of the ordering dental practitioner. The Company intends to initially coordinate efforts with local and regional dentists so the business can refine its production methodologies prior to national level expansion.
Most importantly, the Company will directly employ staff of dental technicians that are highly trained and producing dental appliances spanning dentures, implants, bridges, and crowns. The location will also have the ability to produce specialized orthodontic appliances.
For each engagement, the Company expected generate $200 to $1,500 of revenue.
4.0 Overview of the Organization
4.1 Registered Name
Dental Laboratory LLC. The Company is registered as a limited liability company in the State of North Dakota.
4.2 Commencement of Operations
The business will commence revenue generating operations in the third quarter of this year.
4.3 Mission Statement
To cost-effectively provide dental appliances to practitioners for their patients.
4.4 Vision Statement
To operate a widely respected dental laboratory within the Midwestern United States.
4.5 Organizational Objectives
• Properly hired dental technicians that will be able to produce appliances as specifications of the practitioner.
• Conduct extensive direct outreach with dental practitioners within the target market area.
• Adhere to all regulatory frameworks regarding the operation of a dental laboratory.
• Provide gainful employment opportunities for the Company’s staff.
• Implement policies and procedures that allow the Company to grow on a year-on-year basis.
5.0 Market and Industry Analysis
5.1 External Environmental Analysis
This section of the dental laboratory business plan will focus on the current economic climate, the industry, the customer profile, and now ongoing competition at the business will face.
At this time, the economic climate within the United States is moderate. As a result of continually changing trade policies, there has been a significant degree of inflation introduced to the economy. It is fully expected that federal agencies will implement the appropriate measures in order to ensure that inflation remains in check in the coming months and years.
However, these matters will only have a limited impact on the dental laboratory’s ability to generate revenue. This is primarily due to the fact that most dental procedures that require a dental appliance are covered by insurance. Additionally, this is an absolutely necessity among patients. The significant contribution margins from dental appliance sales will allow the business is able to remain profitable.
5.2 Industry Analysis
As of this year, dental laboratories produced $24 billion of revenue. The outlook for the industry is extremely positive, especially as people from the Baby Boomer generation moves into their years and require a greater degree of dental care.
5.3 Customer Profile
Any dentist that requires ongoing production of dental appliances is a potential client of the business. As such, the Company will conduct extensive direct outreach in order to foster ongoing relationships with practitioners, regionally and nationally.
5.4 Competitive Analysis
The Company will face moderate to great competition as it establishes the operations in McKenzie County. Through its highly controllable operating cost infrastructure, the Company will be able to remain pricing competitive as compared to competing dental laboratories in this market.
6.0 Key Strategic Issues
6.1 Sustainable Operations
The Dental Laboratory will have sustainable operations as a result of the following:
• The revenue of the business is relatively immune from negative changes in the economy.
• The operations of the business are highly capable, and the Company can work with dentists across the United States.
• The owner is a highly experienced dental laboratory technician.
6.2 Basis of Growth
The Company will expand via the following methods:
• The Company can potentially acquire existing businesses that operate in a similar capacity.
• Organic grow through direct marketing initiatives with regional dentists.
• Expansion of operations to include major national markets.
• Expand the scope of dental laboratory services that are offered on site.
7.0 Marketing Plan
7.1 Marketing Objectives
• Conduct extensive direct outreach with dental practitioners, including specialists.
• Maintain an expansive online presence that uses search engine optimization and social media marketing.
• Use LinkedIn in order to foster ongoing relationships with practice managers.
7.2 Revenue Forecasts
7.3 Revenue Assumptions
Year 1
• The business will establish numerous relationships with dentists in North Dakota.
• Revenue will reach $814,000.
Year 2
• The business will expand its direct outreach initiatives.
• Revenue will reach $912,000.
Years 3-5
• By the fifth year of operation, dental lab revenues will reach $1.2 million.
• Gross profits will reach $828,000.
7.4 Marketing Strategies
As this is not a consumer facing business, the dental laboratory will be able to take a highly focused approach to its marketing campaigns. During the laboratory development, the Company will conduct extensive direct outreach with dental practitioners throughout North Dakota in order to make them aware of the location and its wide range of services. The Company will continue to engage in direct outreach and introduce throughout the life of the business.
The Company will also advertise its dental laboratory services across numerous publications specifically for dentists, orthodontist, and prosthodontists. The Company will coordinate these efforts with a specialized advertising firm that focuses on dental enterprises.
The Company will also maintain an expansive online presence that uses social media as well as search engine optimization. In regards to the website, this will outline the entire scope of services that are rendered at the Company, state-of-the-art dental laboratory facilities. The Company will use LinkedIn to further expand the brand visibility among dentist as well as dental practice managers.
8.0 Organizational Plan
8.1 Organizational Hierarchy
8.2 Personnel Costs
9.0 Financial Plan
9.1 Underlying Assumptions
• The business will have a compounded annual growth rate of 11.9%.
• Management will contribute $75,000 towards your business.
• The Company will acquire a $425,000 business loan.
9.2 Financial Highlights
• The revenue of the business is highly predictable in nature.
• The Company will achieve contribution margins of 64% on all services.
9.3 Sensitivity Analysis
The demand for dental laboratory services remains strong, even during times of economic processes. The Company will be able to work with dentists and related dental practitioners throughout the United States who require specialized and custom appliances. The business will have control of operating costs as a function of revenue.
9.4 Source of Funds
9.5 Financial Proformas
A) Profit and Loss Statement
B) Common Size Income Statement
C) Cash Flow Analysis
D) Balance Sheet
9.6 Breakeven Analysis
9.7 Business Ratios
Appendix A – SWOT Analysis
Strengths
• The Company will be able to scale operations in the coming years with high impact marketing campaigns.
• Limited competition in North Dakota among companies that operate in a similar capacity.
• The Company will be able to ride rapid turnaround times for dental appliances.
Weaknesses
• This is a complex business given the scope and scale of dental laboratory operations.
• Moderately high cost as it relates to payroll.
Opportunities
• Expansion of the services offered at the dental laboratory.
• Established ongoing relationships with prosthodontists throughout the United States.
• Continued expansion of the Company’s operational capacity through reinvestment.
Threats
• Inflation could cause the cost of revenue to increase significantly.
Appendix B – Risk Analysis
Development Risk – Low
The protocols that will be used during the course of the dental laboratory operations have been developed. The primary matter that needs to be addressed to securing the funding discussed this document.
Financing Risk – Low/Moderate
The $425,000 of capital will be used for dental laboratory equipment as well as the build out of the location. The risks related to his financing or debated by the strong economic nature dental laboratory.
Marketing Risk – Low
The Company will use an expanded upon the direct outreach campaigns discussed earlier. This will be complemented by a wide-ranging online marketing campaign.
Management Risk – Low
The Founder is a highly experienced dental laboratory technician that will be able to properly develop and expand this business in the coming years.
Valuation Risk – Low
The valuation risk is offset by:
• The Company will be able to expand even during challenging economic climate.
• The Company will have a significant amount of tangible inventory.
Exit Risk – Low
As noted earlier, there would be a significant demand for the dental labor laboratory once it becomes profitable. The sale of this business is not expected to occur for a minimum of ten years.